Committee Annuls Elektriraudtee Contract, Government to Appeal ({{commentsTotal}})

Source: Photo: Postimees/Scanpix

The Public Procurement Appeals Committee has voided a contract between the Ministry of Economic Affairs and state-owned passenger rail service operator Elektriraudtee.

The setback comes amid a dispute over the contract for operating Estonia's intercity passenger trains, potentially delaying the plan to start operation of 20 brand new Swiss-built trains in January.

Triin Biesinger-Jussmann, a lawyer for Edelaraudtee, said in a press release on Friday that the Elektriraudtee contract had been signed without a public tender.

On the other side of the dispute, a representative of the ministry told that the committee failed to take into account an EU directive that allows directly awarded public service contracts without a tender, in the case of passenger rail services.

In a related dispute, Edelaraudtee, the private company that currently operates intercity trains, is challenging the government's decision to terminate its contract early so that Elektriraudtee could take over operation in January. Edelaraudtee is demanding 5 million euros to compensate for the early termination.

A matter of trains

Biesinger-Jussmann said Edelaraudtee is willing to continue servicing the lines after January 1, and could do so with the new Stadler trains owned by Elektriraudtee.

Norbert Kaareste, head of sales and marketing at Elektriraudtee, said: “Edelaraudtee's current behavior is odd, as they have been operating with a loss for years and require more and more state financial support.” He added that the state company is not opposed to a public procurement and believes it would be in a very strong position to win.

In 2010, Estonia signed a deal to acquire 38 Stadler diesel and electric trains, which are currently being eased into service and have been given to Elektriraudtee.