The Port of Tallinn, Estonian Railways and one of Russia's largest transport companies Rail Garant signed an agreement on April 11 to start up a 130-million-euro container terminal at Muuga Harbor.
The deal comes a month after the Port of Tallinn awarded Rail Garant the much-sought-after contract to operate its planned terminal.
Infrastructure for the facility was installed last summer thanks to over 64 million euros in EU support. Rail Garant said it is planning to invest the same amount again to further develop the terminal, which should come on line in early 2013, uudised.err.ee reported.
Rail Garant CEO Nikolai Falin said the advantages of the Port of Tallinn were its convenient location, advanced infrastructure, year-round accessibility, simplified customs clearance procedures and the absence of customs fees.
"At the same time, the Russian ports of the northwest are overloaded and don't have the throughput capacity to handle cargo volumes even at current levels," said Falin.
Ain Kaljurand, chairman of the Port of Tallinn, said the project would both strengthen the port's competitiveness and make Estonia's own export easier and cheaper.
"Rail Garant's concept is truly unique: mostly, our transit has been Russian-bound, with goods still moving from west to east, while their business plan involves the reverse movement - from east to west. This will give Estonia additional transport capacities and will create advantages for exporters," he said.
Kaljurand also said that transporting the containers by rail rather than road would have a lower environmental impact.