Rail Baltica in Latvia: National Effectiveness and Benefit Distribution

Abstract

Rail Baltica is a flagship Trans-European Transport Network (TEN-T) corridor project whose positive corridor-level cost–benefit analysis (CBA) indicators do not automatically translate into proportional national welfare gains. Rather than replicating the official CBA, the study applies a methodological inversion based on benefit hierarchy, scenario analysis, and sensitivity testing. Official CBA indicators (NPV, BCR, IRR) are treated as a reference framework, while national outcomes are evaluated through bounded demand and delivery scenarios. Quantitative modelling focuses on passenger time savings as the most stable benefit component, while freight benefits are monetised conservatively by using baseline-anchored utilisation ranges. Freight effects are less robust due to a structural break in East–West transit and declining rail freight baselines. Financing gaps and phased delivery increase exposure to fiscal and timing risk, while environmental gains remain assumption-sensitive. For Latvian decision-makers, the study provides a practical robustness framework centred on node operability, phasing discipline, and demand realisation thresholds to support risk-aware implementation choices.