Passenger trains carry financial relief to transit business



Come next year, passenger train firms will be paying Estonian Railways quadruple the current infrastructure fee. To keep ticket prices in check, the added money comes from national budget.  

On top of that, economy minister Urve Palo intends to yearly invest additional €5–10m into repair at Estonian Railways.  

If the plan is Okayed as state budget strategy is put together this spring, costs of transit businessmen for railway transport go down markedly. This year, the Estonian Railways prognosis says carriers of goods must pay nearly €35m for using the infrastructure; in 2016, then, mere €26m would do.

«At the moment, the income at Estonian Railways is not high enough for all repairs as to ensure expected speed for trains everywhere; also, the control system of the railway is from the 60ies in the previous century,» said Ain Tatter, railway department head at economy ministry. «At the Tapa–Tartu section, for instance, the speed has been brought down to 80 km/h, thus delaying the arrival by seven-eight minutes.»

Go Rail troubled

At the ministry’s estimate, €20m is yearly missing as regards to investments; for this, funds are being sought for in national budget and European support funds. Meanwhile, it is hoped that the government will agree that, in times to come, €9m would be paid to the passenger carrier Elron which, in turn, would be paying Estonian Railways the same amount more. While, this year, €2.5m is predicted by Estonian Railways as infrastructure fees for domestic passenger train traffic, in 2016 the amount would be €11.5m.

The ministry has no plans to raise price of tickets. As for international train lines, Mr Tatter says the ministry is seeking a solution allowing to keep infrastructure fees for Moscow and St. Petersburg train lines operated by Go Rail at current levels.

Still, Go Rail head Alar Pinsel is worried about the changes ahead.

«It would be highly regrettable if the state goes towards putting an end to private business on the railway. Even a slight rise of infrastructure fees would equal end of business to private operators who only live on ticket income,» he said. «Even at the current infrastructure fees, and due to fuel excise rise, a private railway operator is not on equal basis with bus companies.»

The rail freight carriers, however, are looking forward to the change, excitedly. They hope, then, to develop a competitive edge before Latvia when it comes to Russian transit goods.

«The €9m injection from the state is very important as, currently, Latvia’s railway tariffs are way more benevolent than ours,» said Erik Laidvee, CEO of Estonia’s only container terminal Transiidikeskuse AS. «At Muuga Harbour, we could gain extra electronics and sports goods, as well as Brazilian and Argentine frozen meat carriage triggered by economic sanctions and currently going via Ust-Luga harbour.»

Meanwhile, the carriers are not eager to predict business before the new principles are ratified. «Lower infrastructure fee would be a boost to carriage of goods as, at the moment, carriers of goods are paying 80 percent of said fee and carriers of passenger only a fifth, but the volumes of use are proportional inversely,» said railway goods carriage company EVR Cargo chief Ahto Altjõe.

€20m missing

Estonian Railways head Ahti Asmann was unwilling to confirm that the fee rise planned for passenger carriers would definitely lessen the load for carriers of goods.

«To maintain the infrastructure, we need €56m a year, and €20m are currently missing. Despite that, this year we will still make it,» he explained. «But till there’s no clarity where the missing money will come from, and the methodology for calculating the fees, I cannot promise less costs for carriers of goods.»

Freight volumes on Estonian Railways started to dramatically shrink after Russia decided to channel its oil products export to the mega harbours built in Leningrad Oblast. 



Urve Palo

Minister of Economic Affairs and Communications


For 2015–2020, €70m out of EU support funds have already planned for railway infrastructure investments, but there is a need regarding 2016 state budget, in addition to partial funding of railway maintenance costs, to find additional means to also increase the proportion of what passenger trains pay to use the railway.

In addition to boosting the state support, the railway entrepreneurs also are under the complicated obligation to find new ways to compensate for the shrinking volumes in Eastern transit, making maximal use of North-South links. For that, the fast Rail Baltic railway connection would surely be a perk.