State wants to buy back Haapsalu railroad dam

Photo: Eero Vabamägi

Estonian Railways discontinued passenger rail traffic between Haapsalu and Riisipere in 1995 and sold the railroad along with the dam. Now, Estonia's economic affairs and infrastructure minister believes the state company should buy it back.

The 1990s were a confusing time, which has led to the current confusion around the railroad dam between Riisipere and Haapsalu that has luckily survived to this day. Because the state was looking to get the railroad off its plate, it was sold to Aarne Taal in 1997. The businessman operated cargo trains for a time before pulling up the tracks. Taal still owns the dam, while below it lies largely unreformed state land. Some of the land under the dam is owned by Taal.

While Taal still owns the dam and some of the land under it, control of the property lies with private company Western Railroad (Lääne Raudtee), owned by Haapsalu entrepreneurs Koit Uus and Veiko Tišler.

“We have a 15-year contract with Taal that gives us all rights to the railroad, including the right to sell,” Uus explained.

The state recently allocated €8 million for the restoration of rail connection between Riisipere and Turba as early as next year. Minister of Economic Affairs and Infrastructure Kadri Simson said that the sum includes buying back the dam.

Initially owned by the state

The minister believes it would be sensible to restore the connection to Haapsalu in two stages – the first is the 6.3-kilometer Turba-Riisipere section; however, Haapsalu remains a further 46.6 kilometers away.

“The financing decision should be made after the 2019 Riigikogu elections,” Simson said. “I've met with representatives of Estonian Railways and Elron, and the most sensible option would be an electric railroad. That would allow us to use the same electric trains that run between Tallinn and Riisipere today.”

The so-called old railroad had diesel trains servicing the connection between Riisipere and Haapsalu.

Simson said it is important county governments first transfer the land under the dam to the state. “After that, county governments would hand it over to the ministry,” the minister explained. “Next the right of superficies would be given to Estonian Railways on the condition the latter hold negotiations with the owner of the dam for the purpose of obtaining it. I have very little doubt in that these negotiations will take place as the owner has repeatedly expressed his desire to transfer the track bed to the state or Estonian Railways.”

Taal has confirmed as much, as has Western Railroad.

“The most sensible solution is one where the Riisipere-Haapsalu railroad forms a part of Estonian Railways' infrastructure as opposed to remaining a separate section,” Simson added. “I believe it would not be sensible to build a railroad on privately owned structures.”

The economy minister wants the railroad to run beyond Turba to Haapsalu and ideally the port of Rohuküla, allowing the residents of the island of Hiiumaa to walk to the ferry. Hiiumaa is home to around 8,000 people.

What is Simson's reply to people who say that restoring the railroad to run through sparsely populated Lääne County to reach its center and its 10,000 inhabitants is pure madness and squandering?

“Haapsalu has an entirely respectable hinterland,” she said. “There are enough passengers who could opt for the railroad for the project to make financial sense. The first stage leading to Turba is the most cost-effective, according to recent analyses – Elron has told us that it will not initially create the need for additional trains.”

The settlement of Turba is home to around 900 people and is surrounded by a number of villages.

Simson said the argument is over whether public transport should be available only in densely populated urban areas or whether it should also exist in places with fewer residents. “I represent the opinion according to which people outside of Harju County need high-quality public transportation, as well as that the railroad is the most environmentally friendly option,” she said.

Company to restore the railroad

Uus and Tišler created AS Western Railroad in 2015 to build the railroad from Riisipere to Haapsalu themselves should the state refuse to do so. A number of preparations have already been made.

Supervisory board chairman Uus said that banks are prepared to finance the project on the condition the firm has a contract with the Ministry of Economic Affairs and Communications. The state would then have to pay Elron an annual subsidy of around €0.5-0.6 million that would in turn land in the pockets of the entrepreneurs who built the railroad and the banks that financed it. Now the state prefers to buy the land first.

Uus said that the railway dam, built in the early 20th century, was constructed with the level of meticulousness characteristic of Czarist time and can still bear tracks and trains – that is to say the railroad will cost that much less to build.

Taal and his supporters have done impressive work in the Riigikogu – the Haapsalu railroad support group includes half of MPs.

“However, until now it always happened that when they had to weigh the required sum next to teachers' salaries, it proved impossible – it was not able to compete,” he said. The businessmen set about restoring the railroad themselves. “It seemed an awfully big piece to bite off at first. We were also fooled using so-called deterrence prices – you initially quote a higher cost of construction in hopes the other side will disappear.”

Therefore Western Railroad was supposed to construct the Riisipere-Haapsalu railroad itself, at least as far as Turba. That, however, required a long-term contract with Elron that the company would use it to operate its trains.

“We asked for 20 years, they offered us five,” Uus said. “Elron is convinced a Haapsalu connection would have a decent number of passengers.”

Uus also said that representatives of Western Railroad came under pressure when it was said they are looking to pull a leedo (reference to ferry businessman Vjatšeslav Leedo – N. N.). Politicians were afraid entrepreneurs would press the state for bigger and bigger sums for use of the railroad.

“That is why all our contracts have, from day one, included an item that says the state can buy us out of the project at any given moment based on a previously agreed-upon price methodology,” the supervisory board chairman said.

Uus said that the company is currently pondering how to use the €8 million the government has allocated as so-called seed capital with which to pull the railroad closer to Haapsalu. “We hope to negotiation with Estonian Railways in terms of how to solve that problem,” he said. “You can do a lot with those €8 million.”

Optimistic calculations suggest it would cost around €40 million to take the railroad from Turba to Haapsalu.

Socioeconomic justice

Uus said that it would be necessary to restore the railroad before construction begins on Rail Baltic in 2020 if possible. “We can speculate that Rail Baltic will hike construction prices,” he explained.

The Haapsalu railroad could also serve as a reference for railroad builders who would later be working on Rail Baltic, Uus believes. “We have a favorable window to get it done quickly,” the businessman said.

Uus said that he and like-minded individuals have always been aware of the fact that the railroad is an expensive public benefit. “However, it cannot be more expensive for Haapsalu than it is for the rest of the country,” Uus said. “If a young family wants to move out of Tallinn, and you can see relevant tendencies in major European cities, why should it pick the only mainland county that lacks a rail connection? It is not fair!”

He said that studies have shown the Haapsalu railroad would make socioeconomic sense. “The same thing is said regarding Rail Baltic – infrastructure projects do not have to turn a profit, they have to be beneficial, which is a far broader concept,” Uus said.

Uus emphasized that all options are still on the table – both the state buying the businessmen out of the project, and a joint effort with Estonian Railways. “We are not trying to pull the covers to our side of the bed, we're trying to pull the train to Haapsalu,” he said.

Completion of the railroad would allow people to travel from Tallinn to Haapsalu in an hour. It currently takes the bus an hour and a half.