Get out your calculator. The original price, laid out in the project's investment schedule through 2000, was $180 million. The project is running 15 percent over budget so far, and according to the Via Baltica monitoring committee 214 million euros ($199.02 million) have been spent. Keep in mind that the exchange rate has changed. Now, the same monitoring committee foresees an additional outlay of 553 million euros through 2006. No, actually there's more, because the committee does not include in its base figure another 102 million euros for access roads. Suddenly, we have reached 869 million euros.
This is a staggering amount of money, especially for the cash-poor Baltics and Poland. The Via Baltica runs from Warsaw through the Baltics to Tallinn and then, in theory, jumps across the gulf to Helsinki. It is a 930- kilometer-long road, no wider than two lanes almost all the way, at about 934,000 euros per kilometer.
Roads are always expensive. It's one of the curses of state building. The ancient powers spent millions of slaves bricking chariot paths. We spend millions of euros paving roadways. On the face of it, we look nicer than the ancients because our road workers are paid. But when the numbers get this high, it's worth running a cost-benefit analysis.
In a region where social programs are underfunded chronically and access to the economy itself is limited in some outer regions, are the Baltics wise to spring for this expensive plan? When bureaucracy and budgets rumble forward on momentum and gather speed, don't some people fall beneath their wheels?
The Baltics need good roadways because transit accounts for a significant chunk of annual GDP. Yet if we return to the early and mid-1990s, when the Via Baltica project was gathering momentum and political backing, we find a debate raging about whether the north-south route is really the best one to develop. Back then, the idea sounded catchy, "linking the Nordics to Central Europe," across the Baltics. Advocates said it would make the Baltics an artery from one stable region to another. Skeptics said that the Via Baltica would constitute an outrageous misallocation of funds, since the Baltics' geographical fate is to be an east-west transit corridor.
Two hundred fourteen million euros later, the skeptic's argument is still valid. The vast majority of commercial traffic through the Baltics still runs east-west, and it will in the future. The advocates can claim a victory, by pointing out that north-south travel is now easier. But the biggest advances have come alongside the road, with new service stations and shops, and at the newly-efficient Baltic border crossings Ð though the Polish-Lithuanian border remains inconvenient. As for Via Baltica itself, 110 kilometers of new road have been built, and 333 kilometers have been rehabilitated Ð a good start.
Back to the point about roadways, consider how small the Baltics' budgets are for their national road networks. This year Estonia plans to spend 64 million euros, in total, to maintain and improve its 16,400 kilometers of public roads. So, even in terms of road-development budgets, the suddenly-bloated Via Baltica project looks out of proportion.
Of course, advocates of all this spending will protest, saying that the new work should be financed by international banks, as before. But this is a flimsy point. First, loans are not forever. Second, the Baltic road networks are in notoriously poor condition in some areas off the north-south route and away from the east-west highways, which will get some support from Via Baltica's access-roads budget. Most roads that were gravel in 1991 still are. Fifty-four percent of Latvia's total road network is gravel, as is 49 percent of Estonia's and 45 percent of Lithuania's, according to each country's road administration.
Unless the national road networks Ð not only the throughways for transit Ð are renovated someday, commercial distributors will have to keep the low expectations they already have. Raimonds Toms, foreign affairs director for the Latvian Association of Freight Forwarders, complains that Latvia has "no united strategy" to develop road transit. Lithuania is better off. Estonia is trailing behind.
Yet to hear the roads directors from the Baltic ministries of transport speak, one would think everything is perfectly on track. There are even some flashy plans in the offing. Latvia, for example is wondering how to scare up funds for a tunnel under the Daugava River. Estonia is dreaming of a tunnel or causeway between the mainland and Saaremaa. Real showpieces. It all reeks somehow of that old Soviet habit Ð building things to prove it can be done, whether needed or not, and lining the pockets of friendly contractors along the way. No, it couldn't be.
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