Industry body: Estonia losing €357m per year due to dwindling transit ({{commentsTotal}})

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Business

The Estonian government is losing 357 million euros annually as a result of the fall in transit volumes from their peak levels ten yars ago while overall the slump in transit is depriving the Estonian economy of 510 million euros every year, Estonian Logistics and Transit Association (LTA) estimates indicate.

The total amount of freight shipped through Estonia is estimated to drop to six million tons this year, down significantly from 40 million tons in 2006. As the passage of one ton of freight through Estonia injects 15 euros into the Estonian economy, 510 million euros less than in 2006 is left in the Estonian economy today.

The 15 euros per ton left in Estonia is divided as follows: seven euros to Estonian Railways infrastructure and the carrier, two euros to ports, three to pay for terminal operation-related osts including energy and IT, and another 1.5 euros each for labor and to the operator to pay back investments and earn income.

As a result of the reduction in transit volumes, Estonia is failing to get 10.5 euros per each missed ton, made up of foregone revenue of the railway and ports as well as the labor taxes of terminals. This is a 357-million-euro drop from 2006.

The association noted that while it's possible in collaboration with the government to increase freight volumes and earn additional revenue, it's the environment created by the state which sets estonia behind its neighbors.

From 2006-2014, the number of ton-kilometers of rail shipments increased by 15.5 percent in Latvia and by 10.9 percent in Lithuania. In Estonia, meanwhile, the number of ton-kilometers fell by 3.3 times by 2015. Last year, freight shipment volumes declined by 2.4 percent in Latvia, by 1.9 percent in Lithuania and by 2.0 percemt in Estonia.

Editor: Editor: Aili Vahtla



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