Estonian Railways applying brakes to North-South transit

Photo: Mati Hiis / Õhtuleht

Attempts by Port of Tallinn and Transiidikeskus (Transit Centre) to use «Old Rail Baltic» for carrying Finnish goods to Europe have bumped into indecisiveness of Estonian Railways amid power struggle.

This May already, Estonia’s first container terminal would have sent initial test containers filled with Finnish timber, paper and metal towards Europe. Alas, Estonian Railways is unable to hold price negotiations.

For the same reason, plan by Transiidikeskus to launch a freight train along the old Rail Baltic track in June got derailed.

«As an unpleasant surprise, we cannot commence as it is proving impossible to settle price tariffs of Estonian Railways infrastructure,» said Transiidikeskus CEO Erik Laidvee. «By tariffs set by economy ministry to Estonian Railways, carriage of goods is not currently competitive with naval transport,» he said. «The company having management issues, with old chiefs laid off and the new not yet appointed, it was impossible to propose that the minister award special tariffs.»

Meanwhile Port of Tallinn and the harbour of Helsinki have toiled for years to get a Vuosaari-Muuga ship line going for servicing the North-South transport of goods, as Finns are seeking alternatives to trucks-on-highways and naval transport.

«For Estonian transit business as a whole, it is vital to send a sample batch North to South, to show our willingness and capability to get going in that direction,» said Port of Tallinn CEO Ain Kaljurand. «Before we have proven ourselves, the real loads will never come.»

Sadly, port manager was forced to admit that the confusion in Estonian Railways is indeed a hindrance for the opening of the new trade route. «All other parties may do whatever, but while the railway is unable to answer related questions, nothing will work,» observed Mr Kaljurand.

Due to increased interest in hearts of Finnish exporters, Tallink is ready to purchase a new cargo ship which would be able to carry both containers and vehicles. «Should the Transiidikeskus idea be executed, we would definitely consider increase of volumes in the Estonia-Finland direction and, if needed, along the Muuga-Vuosaari line,» said Tallink’s communications manager Luulea Lääne.

«Last summer, we brought an additional cargo vessel SeaWind unto the Tallinn-Helsinki line to better service the increased flow of goods in that direction.»

In first quarter of 2014, Tallink carried 38,000 trucks along Finland-Estonia lines. This year, a fifth has been added – 47,000 trucks.

Unlike the other transit firms, Estonian Railways sends contradicting signals regarding the North-South route. While executive management thinks the Rail Baltic transport is nonsense, council thereof would still be willing to discuss tariffs.

Estonian Railways development director Toomas Uiboupin says no one has even talked to them about the North-South thing. «Here, truck transport has a definite advantage as a container loaded onto a truck in Finland will, without any additional handling, get straight to customer in a couple of days,» said Mr Uiboupin. «In order to get a train going, there first has to be a massive amount of goods, but I do not see what would make Finnish entrepreneurs use railway if they can do it better by sea or by truck.»

According to chairman Raivo Vare, Estonian Railways is yet to discuss lowering of the tariff. However, he said the tariff isn’t the problem, as the infrastructure fee asked by the railway company would be a mere fraction of costs to move a container.

«We are all for the carriage of goods, and are ready to discuss lowering the tariffs, and the change of management has nothing to do with the process,» claimed Mr Vare. «When it costs €2,000 to carry a container and of that our tariff is mere €100 then I don’t see the effect while naval transport takes €300 for that, for instance.»

The troubled launch of old Rail Baltic

Transiidikeskus’ business idea is to trigger Rail Baltic carriage of goods along the local 1,520 mm width before the 1,430 mm new Rail Baltic ever is built. This would spell changing wheels under trains in Lithuania before they cross into Poland.

The train can be launched provided railway carriage is cheaper than by sea. For that, tariffs need to be coordinated with railway infrastructure companies in all three Baltics.

Until Tallink has initiated its Vuosaari-Muuga cargo ship line, a container filled up in Finland must be taken by truck to a ship berthed in Old City Harbour from whence in turn it is carried to Muuga. Thereafter, the container would be sent forth towards South from Transiidikeskus container terminal, by any train that happens to be handy.

Should Vuosaari-Muuga cargo ship line be launched, the containers would arrive directly at Transiidikeskus terminal to be put to a special train and sent South via Tapa, Tartu and Valga. However, that is not the end of the obstacles. Pursuant to existing order, the train needs to stop at Valga where its Estonian locomotive is swapped for a Latvian as EVR Cargo’s General Electric engines, ordered from America, are not allowed to ride the rails of Latvia.

Such manoeuvring may take 24 hours. All three Baltics have differing locomotive types, meaning that the procedure is repeated on Latvia-Lithuania borderline. Meanwhile, they cannot use a single locomotive suitable for all – due to the requirement that train driver and his assistant must be accustomed to the track. Therefore, every country must supply a crew of its own.

Indeed, mere two years ago the electronics-carrying container train Zubr rolled right along until Black Sea. But that was thanks to a Ukrainian oligarch who, having quarrelled with Black Sea customs workers, wanted to prove his clout.

In the golden era of Estonian transit biz, a so-called pendulum train went between Russia’s Kirishi oil refinery and Muuga Harbour, crossing the borders without changing locomotives. The solution was thanks to deep integration of railway and transit interests.

COMMENT

Kristen Michal, economy minister

Launch of new cargo traffic is always welcome and as economy minister I wholeheartedly support such activity to enhance the economy. Meanwhile, it is not the economy minister who may grant infrastructure fee incentives to trigger carriage of goods; the minister does not set the infrastructure tariff, rather the methodology for these to be calculated. Nothing will hinder Estonian Railways from allowing incentives, and Estonian Railways does have a functioning council and a board and management of the company will not be halted during the competition (for new board – edit). The main thing to watch for is principle of equal treatment, and that the fee may not be lower than direct costs caused by user’s train. That would ensure that, even in the future, users will be secured a functioning infrastructure.