1. Introduction
Efficiency and effectiveness of public spending is an important property of sustainable public finance and overall growth of economy. Public spending as a significant part of fiscal policy package is a crucial topic from a project level to a fiscal package level. Scholars ([
1,
2,
3,
4,
5]) have been intensively and openly analyzing asymmetric information issues (in particular optimism bias, strategic misrepresentation and escalating commitment) in megaproject management, linking them to enhanced public debt concerns. Literature often points out that most megaprojects have a negative impact on economies after completion of construction, thus confirming the concerns of scholars. However, public investment dedicated to megaprojects keeps on increasing. Public authorities and project promoters, despite warnings, keep on advancing with megaproject implementation persistently communicating overly optimistic information to the public on expected socio-economic benefits. The worldwide sustainability of economies has been seriously threatened by the recent economic shock due to the COVID-19 pandemic as it presented itself as the largest since the Great Depression of the 1930s [
6]. Pre-crisis high public debt and, naturally, the quality of public investment issues stand herein at the center of discussions of politicians and economists [
7].
Megaprojects, being major determinants of public investment quality, have become the center of attention in economic literature. Most scholars define megaprojects as the public investment projects with a total capital cost from EUR 1 billion ([
5,
8]) up to a national GDP [
9] implying their significant share in public spending packages. Despite their risky nature [
5], megaprojects have been very popular amongst politicians. Various information sources (for example, [
10]) show demand for global infrastructure investments amounting to billions of euros. The European Commission (EC), in a struggle to reach its goals of a sustainable transport network, has allocated EUR 24 billion for transport sector projects alone through the Connecting European Facility (CEF) in the 2014–2020 funding period [
11].
This work is a combination of the long-term expertise in the topic, in-depth scholar literature analysis, independent socio-economic reassessment of megaprojects, and empirical survey of related decisions of public authorities.
First of all, the article analyzes the causality chain from the roots of the megaprojects’ failing nature to their impact on economic sustainability. The work takes into account the following economic literature, which suggests questionable socio-economic outcomes of megaprojects. The “iron law of megaprojects”, documented by [
12], states:
“over budget, over time, over and over again”. Related scholar literature accordingly elaborates on persistent use of overly optimistic misleading information on forecasted benefits of megaprojects by promoters, which creates optimism bias, strategic misrepresentation, and escalating commitments in project management. Eventually, these issues lead to going over-budget and economically unjustifiable megaproject completion, which naturally converts into an additional burden of increased public debt while the public is kept at a substantial distance from the megaproject decision-making [
3]. Expectations in the medium and long run are related to the additional public benefits deriving from the exploitation of the object, which has been delivered to the economy. In reference to medium- and long-term project benefits, construction and operation of infrastructures are activities with very significant social impact [
10]. Literature notes that, in reality, the world of policy and project preparation and implementation is a highly stochastic one where things happen only with a certain probability and rarely turn out as originally intended [
2]. Finally, in line with the widely-elaborated opinion of distinguished scholars [
2,
3], this work raises the hypothesis:
The root of the asymmetric information issues in megaproject management comes from the enhanced enthusiasm of project promoters, directed towards successful advancement in project implementation.
Next, this work takes a strategic approach of analysis, which is wider and beyond commonly-accepted socio-economic reasoning. Three megaprojects-
Øresund Bridge,
Brenner–Base tunnel and
Rail Baltica—similar in scope, objective, and governance, differing in their implementation phase are selected for independent reassessment from today’s perspective and cross-referenced comparison of their social-economic impact results under
Cost–Benefit Analysis (CBA) guidelines. Publicly available evidence reveals that funding decisions, which enabled these projects to be launched, were made on the basis of positive CBA results in each megaproject. Analysis shows that over-estimations of CBA results in all three projects, while just
Øresund Bridge, with its initial clear commercial purpose, confirms to be beneficial to the economy under the estimated pessimistic scenario. Robust political implications of two other projects-
Brenner–Base tunnel and
Rail Baltica reveal other strategic purposes beyond socio-economic. In particular, the first implies to be solving long-term environmental issues in line with the EU’s sustainable mobility goals under the European Green Deal [
13], while the latter-NATO’s military mobility issues in the Baltic region according to the EU Action Plan on Military Mobility [
14]. The purposes of the two megaprojects are highly-welcomed among the public. However, they turn out to negatively impact the economy meaning that they are being delivered at the expense of the integrated and sustainable growth of the whole EU economy.
Finally, an empirical survey of publicly available documentation reveals two important points in this context. First, sensitive political decisions may raise public concerns; therefore, they tend to be covered with socio-economic impact asymmetric information. The hypothesis is therefore rejected due to implications on the root of over-optimism at the political rather than the project management level. Second, megaprojects, which are dedicated to deliver on certain strategic purposes, may include some factors that are omitted from commonly-performed socio-economic assessments. Therefore, the usual practice is too narrow to grasp the full potential impact of a megaproject. As shown in this work, a strategic perspective helps to find the logic of political reasoning, which often cannot be justifiable from a purely socio-economic point of view. The work emphasizes that strategic megaproject assessment in a combination with the establishment of appropriate funding mechanisms dedicated for solving particular strategic questions would clarify many currently-raised issues on the economic burden of megaprojects.
This work contributes to science by suggesting a direction for more constructive discussions on this topic. Better understanding of political reasoning consequently may lead to more constructive discussions between scholars and politicians, thus leading to more effective future decisions on the overall economic sustainability. Nevertheless, the socio-economic impact of a megaproject remains an increasingly important issue. The main unanswered question remains what level of additional economic burden deriving from a megaproject is acceptable for the society in exchange for its strategic value? Elaborations on this aspect promote further studies on searching for more appropriate megaproject assessment methodology through a strategic perspective, beyond the socio-economic. Strategic megaproject assessment approaches could therefore contribute to defining the components for the resilience of economies against economic shocks.
The structure of the analysis is the following:
Section 2 provides literature analysis on the influence of asymmetric information in the context of the risks of megaproject implementation and elaborates the European Commission’s widely used
Cost–Benefit Analysis (CBA) guidelines project socio-economic impact evaluation mechanism.
Section 3 explains the methodology, used for cross-evaluation of socio-economic impact of the three selected megaprojects.
Section 4 provides the independent CBA reassessment results of three megaprojects (Øresund Bridge, Brenner–Base tunnel, and Rail Baltica) under the CBA guidelines, updated to today’s perspective. This section also elaborates on the issues that might have significantly impacted the derivations of socio-economic results from the original ones.
Section 5 cross-evaluates the projects between each other and against the publicly available decisions of authorities related to the projects. This section also provides the detailed analysis of parallel EU strategic initiatives, which imply significantly contributing to the project promotion at the political level.
Section 6 discusses the political implications on the megaproject impact at the strategic level, ousting the importance of possible negative socio-economic affects.
5. Comparative Analysis
After the update of the CBA analyses of each megaproject to today’s perspective, the results are revealed in
Table 3. Concluding comparisons of the main socio-economic results of
Section 4 in the context of the methodology of CBA guidelines is the following.
The Øresund Bridge project is definitely a ’role-model’ project.
Table 3 does show this project to confirm the estimations of its positive socio-economic impact under the CBA guidelines. The reason for this compliance implies to be the project’s purely commercial nature. The benefits of this project are incoming from the tariffs of rail and road traffic flows that essentially disrupted the market of ferry line services between Denmark and Sweden.
Section 4.1.3 reveals the essential socio-economic impact determinants to be road/rail passenger and freight traffic flow forecasts, together with transportation service tariffs, collected from crossing the bridge. Ref. [
27] notes higher pricing policy applied for using the bridge due to previous public agreements with the ferry line businesses on compensation in case ferry line services are disrupted. Despite this, the relatively steady traffic volumes imply the current pricing levels to be acceptable for the public.
As elaborated in
Section 4.1, the finalized post-construction total investment amount of the Øresund Bridge project can not influence the project socio-economic impact results in the future. The project did experience investment cost overruns of around 50% during the planning and construction phases, thus confirming the general trends of megaprojects presented by [
2,
20]. The reassessment traffic flows based on the actual figures from 2010 to 2020 reveal the over-estimation of the [
18] CBA results. The traffic volume estimations of the main scenario ‘medium growth’, proposed by [
18] back in 2010, were overly optimistic, and a ‘no growth’ scenario revealed itself as very close to the actual statistics. This implies that the public adaptation (in this case, the inter-regional resettlement of commuters) to the new levels of comfort, created with the project, finalized in about 10 years of project operation. The estimates of a ’no growth’ scenario in 2010 were overly optimistic for rail passenger volumes, but the underestimated forecasts for all freight volumes could be considered as complementing the former. Finally, the largest portion of socio-economic benefits in ’no growth’ scenario, in the context of commuting transportation volumes, confirms the trend today. Having in mind that the ’no growth’ scenario traffic volume estimates, together with unchanging investment cost value and relatively stable operations costs, produced a B/C ratio of 1.4 (at 3.5% discount rate) and an ERR of 6%, today’s estimations could be drawn at a similar level as these figures, still positive in terms of socio-economic impact. The results described above conclude a fragile, but positive Øresund Bridge project socio-economic impact.
Despite the revealed over-optimism in CBA estimations of all three megaprojects (
Table 3), the CBA results from today’s perspective show the Brenner–Base Tunnel and Rail Baltica projects to be having a negative socio-economic impact.
Table 4 summarizes the key aspects of the exploitation of asymmetric information by megaproject stakeholders.
Taking into account the information from
Table 2,
Table 3 and
Table 4, implications of asymmetric information issues, such as optimism bias and strategic misrepresentation, elaborated by [
4,
5,
18] can be drawn in both the Brenner–Base Tunnel and Rail Baltica projects. The analysis provided in
Section 4.2 and
Section 4.3 reveals the risks, associated with investment cost overruns in both cases. Over-optimistic public announcements (examples:
rail-technology.com publication accessed on 25 July 2021 ,
ec.europa.eu accessed on 25 July 2021) in the pre-construction project phase were based on the misleading information from the project’s CBA (
Table 2 and explanation in
Section 4.2.1). This picture is consistent with the implication of theory [
2] on the expectations of project promoters who might have an interest in presenting project costs and benefits in a way to maximize the chances of winning public funding being a root of the optimism bias issue. Indeed, project promoters are hired to run the project. If the project shows a negative socio-economic impact, it will be cancelled and the promoters will lose their jobs. Project promoters persistently feed the public with positive project results, even if they are incorrect (as shown by the incorrect investment costs at current prices vs. undiscounted benefits comparison in
railbaltica.org/finances accessed on 25 July 2021 or
railbaltica.org/cost-benefit-analysis accessed on 25 July 2021 and explained in
Section 4.3.3) to collect popularity credits and thus evolve the optimism bias. Public authorities in charge of decision-making are willing to follow the popularity trend; therefore, they tend to decide accordingly on project implementation and funding. As the project advances into the construction phase, optimism bias issue evolves, and the strategic misrepresentation issue emerges [
5] because the decision-makers are not willing to risk to change their previously made decisions on significant funding due to irreversible project progress achieved.
These implications, representing the hypothesis of this work, are consistent with the following situation in the Brenner–Base Tunnel project, when evaluated purely from the project management point of view. However, the external evidence shows rather political implications, which prevail over the ones described above.
The construction works were well advanced in the end of 2014 when a group of members of the European Parliament officially questioned the legitimacy of the above-mentioned socio-economic assessment results [
29] by naming them:
“marred by the use of obsolescent data, various methodological errors, over-estimation of benefits, and under-estimation of costs.”
The EC [
30] published a purely procedural reply with no disagreement about incorrect cost–benefit assessment and confirmed the increased total project cost of EUR 9.8 billion (63% investment cost increase compared to the investment cost estimate in the project’s CBA). This reply of [
30] in a formalistic way strongly suggests several important factors on the expressed position of the EC:
As the investment cost overrun of 63% has already occurred during the construction phase, the Brenner–Base Tunnel project appears to currently have no legitimate socio-economic impact justification under the commonly-accepted CBA methodology.
The socio-economic impact of the Rail Baltica project at this point of implementation is even more risky. As highlighted in
Section 4.3.2 and
Table 3, current total investment costs are exposed to a risk of high cost overruns due to the revealed optimism bias issue, escalated by project promoters, which are expected to trigger possible strategic misrepresentation and escalating commitments practices of relevant decision-makers. The empirical evidence, concluded in
Table 4, reveals that the project management situation in the case of Rail Baltica is in line with the “iron law of megaprojects”, documented by [
12]:
“over budget, over time, over and over again”. An estimation of exceptionally quick completion of construction works of fully functional 870 km long railway infrastructure in just four years (as explained in
Section 4.3.2) implies significant postponement of the full completion of the construction stage of the project as a whole. Implication of overestimated passenger and traffic flows is explained in
Section 4.3.3. The upcoming public procurement, land acquisition, design documentation development, and other pre-construction long-lasting activities imply that high estimates of freight and passenger flows on Vilnius-Kaunas and Kaunas-PL/LT border sections would be significantly postponed. The explanation in
Section 4.3.3 also reveals incorrect traffic volume estimate forecasts in the medium- and long-run on Vilnius-Kaunas and Kaunas-PL/LT border sections due to currently existing railway operations on parallel lines, which, after the Rail Baltica project completion, would compete for traffic volumes with the newly built Rail Baltica infrastructure. Relatively short distances and technical/environmental aspects of Vilnius-Kaunas and Kaunas-PL/LT sections suggest no significant train speed or other kind of performance-related benefits on the new Rail Baltica line over the current competitor. North–South freight traffic volume estimates from Tallinn to Poland, as stressed by [
23] and described in
Section 4.3.3, suggest significant over-estimations because the flows from Russia are being diverted to Russia’s own Ust Luga port near St. Petersburg and expected Finnish freight has a significant potential to travel on newly modernized road and rail infrastructure along the parallel Scandinavian-Mediterranean TEN-T corridor.
All the implications above suggest highly questionable estimated volumes of freight flows on Rail Baltica. The megaproject’s socio-economic impact (keeping in mind capital costs with a tendency of significant increase) cannot be justified with the current publicly-elaborated assumptions. Without additional purposes and therefore additional external benefits assigned, this project is at risk of becoming just a financial burden on taxpayers in the medium- and long-run, unless this project is designed to serve some other external purposes.
The two megaprojects with negative CBA results, shown in
Table 3, are investigated through a wider perspective, beyond the usual socio-economic framework.
Table 5 presents external (strategic) values of these projects, documented and published by the EU authorities from parallel ongoing EU’s initiatives. These external values are either omitted or undervalued in the previous CBA practices (
Table 2).
Section 4.2.3 and
Table 3 show the main determinants of socio-economic benefits of the Brenner–Base Tunnel project to be the freight and passenger transportation volumes across the Alps (along the Scandinavian-Mediterranean TEN-T corridor) and the unitary values of greenhouse gas (GHG) emissions cost. Freight volumes alone on this corridor accumulate to the level of more than 40 million tons per year and have a reasonable tendency to grow on Europe’s main transport axis.
Table 5 shows the socio-economic impact of the Brenner–Base Tunnel project could still be positive in the very long run (i.e., 200 years, considering the tunnel operation lifecycle) if the rail passenger services through the tunnel are capable to take over a significant portion of the passengers from the current road transport volumes and freight capacity estimate growth across the Alps confirms and (at least) stays on the rail as shown in
Figure A5. Justification on increased unitary values of GHG emissions cost increase could also result in additional project benefits. Both factors, traffic volumes and unitary values, should become more popular in the future in the context of promoting green policy support worldwide. This overall environment implies that the project promoters have a decent chance to make this project acceptable to the public, if this expensive purchase is publicly presented as an investment in substantial reduction of global warming effects. The recent EU’s strategy on sustainable mobility goals within the European Green Deal [
13] to reduce the (GHG) emissions by 90% by 2050 suggests the primary goal of the Brenner–Base Tunnel to significantly contribute to the environmental changes. This perception ultimately rejects
the hypothesis because, despite the contribution of the project to the strategic environmental sustainability goals, it implies to be the root of asymmetric information in project management, arising from imperfections of EU legislation.
The strategic purpose of Rail Baltica is being documented and published by the EU authorities in parallel to the project implementation. The Warsaw declaration of 2016 [
34] between the European Commission, European Parliament, and the NATO defined the framework for the development of the EU’s Action Plan on Military Mobility [
14]. The European Commission President, Jean-Claude Junker, in his State of The Union address (September 2017, [
35]) introduced the EU’s initiative of creating a fully-fledged European Defense Union by 2025. A follow-up of this speech, the Action Plan on Military Mobility of March 2018 [
14], was a follow-up EC communication. It identified the necessity to develop the EU transport infrastructure for dual civilian–military purposes with sufficient technical parameters for effective military movement.
The critical missing link for the NATO military mobility is the absence of EU standard gauge railway infrastructure on the major part of the Baltic region (from Kaunas (Vilnius) up to Tallinn). The difference between the width of EU and Russian standard rail track gauges is 8.5 cm. This legacy technical barrier, imposed as a measure of military strategy of the Russian army against Germany in the beginning of the 20th century, does not allow the trains of the EU standard to travel on the currently-existing Russian gauge railway networks in the major part of the Baltic states. The rail track gauge difference had proven useful during Russia’s war with Turkey back in 1877, as it could slow the enemy’s military advances [
36]. The difference in track gauges is presented in
Figure A10.
In particular, the Action Plan on Military Mobility escalates the necessity of the infrastructure on the North Sea-Baltic Corridor (page 4 of [
14]). The Importance of Rail Baltica to the Military Mobility initiative was expressed in the media as well (
By NATO commander, accessed on 25 July 2021,
EURACTIV, accessed on 25 July 2021). On 21 July 2020, the European Council reached an agreement on the new long-term EU budget, allocating EUR 1.69 billion EUR (in current prices) for military mobility, dedicated to construction of missing links within the CEF 2021–2027 [
37] and a significant amount of this funding could be allocated to Rail Baltica. This evidence, together with the unjustifiable socio-economic impact potential of Rail Baltica, leads to an implication that the project is primarily dedicated to the military mobility purposes, while an availability for public transport operations will be created as well.
The current estimation of the Rail Baltica capital costs is around EUR 5.8 billion with a rough probability to increase by 50% to 100% during construction (up to EUR 11.6 billion). With the current military mobility funding allocations, this project could receive up to 10% of its cost only. From the socio-economic perspective, the Rail Baltica project concludes to be at risk of becoming a huge financial burden on taxpayers in the medium- and long-run. The project funding consequently would be covered mostly from the national budgets of Estonia, Latvia, and Lithuania, including the EU’s contributions through the
Connecting Europe Facility (CEF) funding instrument. According to [
38], CEF allocates the funds, transferred from the Cohesion fund, which are dedicated primarily for the regional economic cohesion with the economic level of the EU [
39]. Despite the highly-encouraging initial purpose of Rail Baltica, the decision of public authorities on project funding therefore implies that these military mobility developments are being delivered at the expense of the economic development of the Baltic states and therefore jeopardizes the notion of balanced, integrated, and sustainable growth of the whole EU economy.
This picture, once again, ultimately rejects the hypothesis since the root of misleading information on socio-economic impact, persistently published by the promoters of Rail Baltica, implies to be the initiative of the public authorities with other than socio-economic goals in mind. However, sensitive decisions, especially on funding allocation, which may raise public concerns, suggest to be covered with asymmetric information, such as overly optimistic socio-economic impact estimations. It shows up as a convenient tool for public authorities to score popularity credits and to keep the public away from decision-making.
6. Discussion
The original CBA assessments of the analyzed megaprojects (
Table 2) all show positive socio-economic results. All of these assessments include overly optimistic estimations on future economic development (
Table 3), leading to political decisions on securing the necessary funds under the EU legislative requirements. The independent CBA reassessment from today’s perspective (performed within this research), meanwhile, shows two of three megaprojects to actually cause a significant burden on the economy (
Table 3). Analysis of the decisions of public authorities shows robust financial commitments and persistent public communication on positive project outcomes despite numerous warnings on economic threats coming from scholars, independent politicians, and even from the CBA developers all throughout the megaproject development (
Table 4).
The empirical survey of parallel EU’s strategic initiatives, however, suggests additional external strategic values for the economically-failing megaprojects (
Table 5). On one hand, these external strategic values are omitted from the commonly-accepted CBA practice, while, on the other, they imply to be ousting the whole concept of socio-economic assessment of megaprojects. In particular, if a megaproject is dedicated to achieving a certain strategic goal of the EU, it will be strongly supported by the EU authorities all the way through its implementation, despite a possibility of negative socio-economic consequences. This results in a notion that
every megaproject, promoted by the EU, is of a high public value either from an economic or other strategic point of view. However, then, commonly-performed socio-economic assessment practice implies to be too narrow to evaluate the full potential impact of a megaproject. In this case, a wider perspective needs to be applied to find the logic of political reasoning, which cannot be justifiable from a purely socio-economic point of view.
Several captivating questions arise herein. The first question is why would the public authorities need to persistently use asymmetric information on project benefits to cover the negative socio-economic impact if the megaproject actually has a higher strategic value, which is omitted from the socio-economic assessment? Despite high strategic value, the socio-economic impact of a megaproject remains an increasingly important issue because society eventually has to pay for the implementation and operation of the newly-created structures. The second question therefore is what level of additional economic burden deriving from a megaproject is acceptable for the society in exchange for its strategic value?
As shown in this analysis, all three projects are dedicated to solving specific issues in certain regions. While the Øresund Bridge project, with its clear commercial purpose, is definitely bringing in new opportunities to the economic well-being of the local society (i.e., Sweden and Denmark), the other two projects, Brenner–Base Tunnel and Rail Baltica, are causing challenges to the local economies instead (i.e., Austria/Italy and Estonia/Latvia/Lithuania, respectively). All three projects are, meanwhile, extremely important to the EU from a strategic point of view.
The current EU practice to fund strategic projects (independently of their initial dedication) through the EU’s structural funds package is a sensitive public issue, and it turns out to be significantly contributing to the discussions on the first above-mentioned question. Persistent use of asymmetric information by public authorities conveniently helps to avoid public concerns and to score popularity credits from high hopes on expected megaproject outcomes. The EU structural funds (in particular, the Cohesion fund) are initially dedicated to achieving socio-economic equality in every EU region (this issue is elaborated in
Section 4). Political decision-making to solve strategic issues with particular regional funding consequently raises many questions on the region’s later ability to meet the public expectations of economic development and social well-being.
This analysis emphasizes that the projects should be funded from the appropriate funding packages, dedicated for specific strategic purposes. Separate assessment of all EU’s initiatives dedicated towards environmental sustainability should be completed and, consequently, an adequate joint funding package for these initiatives should be identified. Similarly, the military mobility initiatives throughout the EU should be collected, jointly assessed, and included into one funding package from military funding sources without mixing it with the funding dedicated for regional socio-economic development. This approach would create less discussions and more trust between authorities, scholars, and the public in general.
Better understanding of political reasoning and more clarity in political actions related to megaproject developments may consequently lead to more constructive discussions between scholars and politicians, thus leading to more effective future decisions on the overall sustainability of the economy. Elaboration on the second above-mentioned question should lead to the search for more appropriate megaproject assessment methodology through a wider, strategic perspective, beyond the socio-economic. Strategic megaproject assessment approaches consequently could contribute to defining the components for resilience of economies against economic shocks.
7. Conclusions
The economic literature, analyzed in this work, is consistent with the CBA results evaluated in this analysis in the context of over-estimations. Despite their ex-ante or ex-post status, all three CBA reassessments show over-optimism in estimations of socio-economic forecasts. The in-depth empirical study of publicly available documentation, related to the megaprojects, ultimately rejects the hypothesis, raised from the overview of the related scholar literature, stating:
The root of the asymmetric information issues in megaproject management comes from the enhanced enthusiasm of project promoters, directed towards successful advancement in project implementation.
Robust political implications reveal other strategic (not necessarily socio-economic) purposes of some megaprojects. The study shows that commonly-performed socio-economic assessment practice is too narrow to grasp the full potential impact of a megaproject. Therefore, a strategic perspective in many cases needs to be applied to megaprojects instead of commonly-accepted socio-economic assessment.
The study shows a high value of all three megaprojects to the society, but not necessarily from a socio-economic point of view. Øresund Bridge, in line with the CBA assessment results, has a clear commercial purpose. Faster and more comfortable transport connection between Sweden and Denmark comes at a higher cost, but is accepted by public over disrupted ferry services. Significant construction cost overruns in the Brenner–Base tunnel show unjustifiable socio-economic impact according to the CBA guidelines. However, the project tackles the long-term environmental issues in line with the EU’s sustainable mobility goals under the European Green Deal, which are bound to be more valued by the public than up to now. In light of the current trends of the worldwide policy to meet the objectives of
the Paris Agreement, the project intends to stand firmly as publicly acceptable. Rail Baltica shows unjustifiable socio-economic impact according to the CBA guidelines. However, it intends to be solving primarily the EU’s military mobility issues in the Baltic region. Despite the highly-encouraging initial purpose of Rail Baltica, the decision of public authorities on project funding therefore implies that these military mobility developments are being delivered at the expense of the economic development of the Baltic states and therefore jeopardizes the notion of balanced, integrated, and sustainable growth of the whole EU economy.
Sensitive decisions, which may raise public concerns, suggest to be covered with asymmetric information, such as overly optimistic socio-economic impact estimations. It shows up as a convenient tool for public authorities to score popularity credits and to keep the public away from decision-making. The current EU’s practice, to fund all strategic projects (independently of their initial purpose) through the EU’s structural funds package, initially dedicated to achieving socio-economic equality in all EU’s regions, should be revised as it jeopardizes balanced, integrated, and sustainable growth of the entire EU economy. The projects, therefore, should be funded from the appropriate funding packages, dedicated for specific strategic purposes, not mixing them with the funds dedicated to region-specific economic growth. This would create less discussions and more trust between the authorities, the public, and scholars.