What is the real value of a cross-border connection?
Transport infrastructure does more than move people and goods. It affects trade, competitiveness, security, resilience and regional development. At a seminar that the Scandria Alliance and the Kvarken Council EGTC arranged in Brussels on 28 September, experts explored how Europe should take these wider impacts into account when it assesses major cross-border infrastructure investments. Four insights stood out: the Northern Nordics offer Europe industrial capacity and expertise; in a crisis, pressure can shift from sea to rail and road; wider benefits generate no revenue but can justify public funding; and the Öresund fixed link has increased trade in goods between Sweden and Denmark by around 25 per cent.
The Brussels seminar brought together experts in regional development, security, financing and research.
“Ambition must be supported by facts”
Opening the seminar, Åsa Ågren Wikström, Chair of the Scandria Alliance and Deputy Chair of the Kvarken Council, highlighted the changing context for European transport planning.
For Northern Europe, she pointed in particular to the need to complement established north–south connections with stronger east–west connections. She also stressed that decisions on major infrastructure need credible evidence that captures factors such as military mobility, security of supply, industrial competitiveness and resilience, particularly in sparsely populated regions where traffic volumes alone may not reflect the wider value of an investment.
“Ambition is necessary. But ambition must be supported by facts.”
Åsa Ågren Wikström, Chair of the Scandria Alliance and Deputy Chair of the Kvarken Council EGTC, opened the seminar by highlighting the need for stronger east–west connectivity and credible evidence to support major infrastructure decisions.
Northern regions offer more than transport routes
Riitta Björkenheim, Development Director at Vaasa Region Development Company VASEK, widened the perspective from transport infrastructure to the assets that northern regions can contribute to Europe.
The Vaasa region is a hub for energy technology and manufacturing, with strong competence and industrial supply chains. Across the Northern Nordics, critical raw materials, Arctic routes and expertise can strengthen Europe’s resilience and strategic independence.
For Björkenheim, this is why cross-border connectivity matters: transport routes, energy systems and supply chains connect regions and countries.
She pointed to the defence industry as one concrete example. In normal times, its production is part of everyday economic activity, but in a crisis its products must still reach their destination when conditions change. Preparedness therefore requires transport routes that keep working in those situations too.
Björkenheim’s broader message was that the Northern Nordics should not be viewed simply as peripheral regions requiring better connections. They also provide industrial capacity, technologies, resources and expertise that are relevant to Europe as a whole, and those assets need to be visible when European infrastructure priorities are discussed.
Riitta Björkenheim, Development Director at Vaasa Region Development Company VASEK, highlighted the industrial capacity, energy technology, competence and resources that the Northern Nordics can contribute to Europe.
When sea routes fail, pressure shifts to rail and road
Hans Tino Hansen, CEO and founder of Risk Intelligence, addressed the security dimension. His presentation drew on a new study of strategic infrastructure needs for military mobility and security of supply in the Northern Nordics. Risk Intelligence A/S carried out the study, and the Kvarken Council commissioned it as part of FLINC together with MidtSkandia and Fellesrådet for Trøndelag Jämtland Härjedalen.
Hans Tino Hansen, CEO and founder of Risk Intelligence, presented findings from the FLINC study on military mobility and the capacity and resilience of transport networks under pressure.
The analysis examines a fundamental challenge for the Northern Nordic transport system: infrastructure that has largely developed around north–south connections may also need to handle substantial movements from west to east in a crisis. The study draws on interviews with key stakeholders in Norway, Sweden and Finland as well as Risk Intelligence’s previous analyses.
Hansen explained that transport by sea is normally the most efficient option for moving large volumes. In a crisis or conflict, however, maritime transport may become restricted or unavailable. This would place much greater pressure on rail and road infrastructure, which already faces capacity limitations on several east–west connections.
At the same time, military mobility cannot be considered in isolation.
“Civil society doesn’t stop.”
Critical supplies still need to reach communities; industries need to maintain production and existing civilian and commercial transport continues. Military movements would therefore add new demands to a transport system that already serves other essential functions.
The analysis identifies limited east–west rail capacity, single-track sections and insufficient transport capacity among the challenges. According to Hansen, smaller improvements can help, but the scale of the potential demand also calls for larger infrastructure investments.
He pointed to ports, rail infrastructure and fixed connections as parts of that wider picture. Among the examples were improved cross-border east–west rail connections between Norway and Sweden and Nordic Connector across the Kvarken. In a situation where maritime routes cannot be relied upon, additional connections could provide capacity and alternative routes for west–east movements.
The broader conclusion is that no single corridor or infrastructure project can meet the entire need. Resilience depends on creating more capacity, alternative routes and better connections between different parts of the transport system.
According to the study, the weakest points are often not the corridors themselves but the transfer nodes, such as port connections to rail and road and storage capacity. Limited information exchange between military and civilian stakeholders also makes it harder to prioritise dual-use infrastructure investments.
Hansen also stressed that the changing security environment has shortened the time available for infrastructure planning:
“We need to do the analysis faster, but also the decision making faster. By fast, I don’t mean not to the same quality. Simply, we need to put more resources into the process.”
Societal benefit is not the same as revenue
Anders Jungar, Senior Consultant at PBI Research Institute, approached the question from a financing perspective. His starting point was that discussions about wider economic impacts often remain theoretical and disconnected from how major transport infrastructure is actually financed.
Anders Jungar, Senior Consultant at PBI Research Institute, explained why wider economic benefits can strengthen the case for public investment even though they do not generate direct revenue for the infrastructure itself.
He compared the total societal value of major infrastructure investments to an onion with several layers. Traditional cost-benefit analysis forms the core. Wider economic impacts add another layer. These include agglomeration effects, the productivity gains that come from bringing businesses and people closer together, as well as effects on labour markets, businesses and trade. Security forms the outer layer, which has become increasingly important but is difficult to quantify.
“How do we assess that impact? How do we quantify that impact? What is the value of our security?”
Jungar also noted that the European Union currently has no standardised methodology for assessing wider economic impacts, particularly in a cross-border setting.
Using Nordic Connector as a case, he then connected the wider benefits directly to the question of financing. The financing analysis within FLINC compared different models and identified a project company jointly owned by Finland and Sweden, a special purpose vehicle (SPV), as the model best suited to the case studied.
But Jungar highlighted an important distinction:
“The wider economic impacts that we just discussed, they will not generate cash flow into the SPV.”
That distinction affects the role wider benefits can play during different stages of an infrastructure project. At an early stage, demonstrating wider economic impacts can help mobilise broader interest and build the case to bring to policymakers. Later, when financing and investment decisions need to be made, those impacts can help provide the public justification for measures such as state equity, loan guarantees or EU co-financing.
In other words, an infrastructure investment can create value for businesses, labour markets, trade and society without that value appearing as revenue in the project company’s accounts. Assessing societal value and assessing financial viability are therefore related, but they are not the same question.
“We need to be very open to innovating new ways of financing infrastructure,” Jungar stressed.
What can we learn from the Öresund fixed link?
Maria Persson, Associate Professor at Lund University, was unable to attend the seminar, so Mathias Lindström, Director of the Kvarken Council, presented her research.
Mathias Lindström, Director of the Kvarken Council EGTC, presented Maria Persson’s research showing that trade in goods between Sweden and Denmark is around 25 per cent greater than it would have been without the Öresund fixed link.
Persson’s research examines how the Öresund fixed link has affected trade in goods between Sweden and Denmark. Her research compares actual developments with a calculated benchmark showing how trade would have developed without the bridge. The research finds that bilateral trade in goods is around 25 per cent greater than it would have been if the fixed link had never been built. The effect developed gradually over time.
Lindström pointed out that this effect is particularly interesting because Sweden and Denmark were already closely integrated before the bridge opened. Ferry connections also remained in operation after the fixed link opened.
But is 25 per cent a small or a large effect? According to the presentation, ongoing research suggests that the trade effect of the Öresund fixed link is at least as large as the effect of joining the EU.
For FLINC, the finding provides a concrete example of why the effects of new infrastructure cannot necessarily be assessed only on the basis of existing traffic. A fixed connection can itself change economic interaction across a border.
The presentations were followed by a panel discussion on cross-border transport infrastructure.
A broader evidence base for decisions
These different perspectives come together in FLINC (Financing Large-scale Infrastructure, case Nordic Connector). The project combines analyses of financing, military mobility and security of supply with an ongoing study of wider economic and societal impacts, which the University of Vaasa is carrying out.
Together, the results will help assess Nordic Connector and support future decisions in its wider context, including its potential role in an east–west transport system connecting Finland, including central and eastern Finland, through the Kvarken and Sweden towards Norway and the Atlantic coast.
Other border regions planning major cross-border infrastructure investments can also draw on the perspectives and methods developed in FLINC. The seminar raised a question that concerns them all: how can Europe take the wider economic, societal and strategic value of cross-border infrastructure into account alongside traffic volumes and financial viability?
Read more
News: New analysis shows the conditions for financing infrastructure such as the Nordic Connector
PBI Research Institute financing model report
The Scandria Alliance and the Kvarken Council arranged the seminar Connecting People. Connecting Regions. Connecting Europe: Wider benefits of cross-border transport infrastructure in Brussels on 28 September. Sarah Väre, Development Manager at the Kvarken Council, moderated the seminar.
FLINC is funded by the European Union through the Interreg Aurora programme.
The European Committee of the Regions hosted the event but is not responsible for its content.
Photos: Simon Blackley and Johanna Häggman
