Government Sinks Ferry Nationalization Plan
The Cabinet decided on Thursday not to go ahead with the plan of former economic minister Juhan Parts (IRL) to nationalize the inter-island ferries then rent them to operators, instead deciding that it preferred to find a company with its own ships.
New minister Urve Palo (Social Democrats) said she hopes to open the procurement for the Rohuküla-Heltermaa and Virtsu-Kuivastu routes, more commonly known as the routes from the mainland to Hiiumaa and Saaremaa (Muhu) respectively. The goal is to find an operator with ferries for a six-year contract starting in 2016, when the current contract expires.
Parts had said his plan would cost the state 8 million euros annually. The state would have bought the ferries and rented them to private operators, creating more competition than the current system, where there is only one operator who has enjoyed a monopoly for the past 20 years.
Palo said she is not confident the state has enough time to buy the necessary ferries. She said the state-owned Port of Tallinn is also looking into participating in the tender to add much needed competition.
The change of direction means Väinamere Liinid, owned by businessman Vjatšeslav Leedo, is likely to continue servicing the lines.
In April, Postimees speculated that the Reform Party is responsible for pulling the plug, as Leedo has friends who are high-ranking party members and Parts has enemies in the party.