Estonian Railways predicting large losses this and next year

Ahti Asmann (Postimees/Scanpix)
11/25/2014 2:51 PM
Category: Economy

Head of the state-owned Estonian Railways, Ahti Asmann, said cargo volumes are continuing to drop and the company is likely to suffer 4 million euros in losses in 2014, and more than double that next year.

He told ERR radio that increased infrastructure payments from Elron, the state-owned passenger rail operator, would help, but in the end the costs of the infrastructure are very high and Elron will not be able to cover all costs.

As Elron ticket prices are subsidized by the state to the extent of 70 percent, the question of rail infrastructure payments is also up to the state.

Asmann said the company could re-merge with EVR Cargo, which could save on administrative costs. He said the Russia, Belarus and Kazakhstan have found it confusing having to deal with both Estonian Railways and EVR Cargo, not just one company that is responsible for cargo travel on Estonian railways.

“The state looks at (rail) infrastructure not as an environment to develop business, but a chance to make money. The current situation is one of businesses maintaining the infrastructure, not one of the state developing the infrastructure to help businesses grow and increase the mobility of the people,” Asmann said.

Estonian railroads are mainly used to transport petroleum and goods from Russia to the West through Estonian ports. Volumes began to drop quickly after the Bronze Night riots in 2007 and have further decreased due to the Ukraine crisis.


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