Bus operator Lux Express eyeing passenger rail market, Elron sees interest as pressuring tactic ({{commentsTotal}})

Elron trains in Tallinn.
Elron trains in Tallinn. Source: (Postimees/Scanpix)

Estonian bus operator Lux Express is interested in joining the domestic passenger rail market alongside state-owned Estonian rail operator Elron in operating passenger trains on the Tallinn-Tartu route. Elron CEO Andrus Ossip, however, sees the bus operator's declared interest as a pressure tactic in putting the brakes on or foiling Elron's plan to buy new trains for the popular route.

In a letter to Minister of Economic Affairs and Infrastructure Kadri Simson, Lux Express CEO Hannes Saarpuu pointed out that Estonia's current public transportation regulations were not sufficiently flexible with regards to increasing operating volumes. In his letter, he also referred to Elron's plan to buy three more trains to meet the growing demand on the Tallinn-Tartu route. Based on these premises, Lux Express has begun to explore the possibility of entering the passenger rail market.

The company's aim would be to initially launch a non-subsidized service on the Tallinn-Tartu route. "We are encouraged to take this step by our existing solid client base as well as the fact that a few years ago, we made serious preparations for launching international passenger carriage via rail on the Tallinn-St. Petersburg route, due to which we now have the necessary primary competence," Saarpuu said. "The analyses were promising, but the launch of the international service got bogged down by administrative red tape."

A study of current regulations and potential forthcoming changes in rail passenger transport organization in both the EU and Estonia indicated that the bus company is not prohibited from entering the domestic passenger rail market, the CEO observed.

Saarpuu is seeking the ministry's positions on a number of issues in order for the company to map out further steps: the distribution of rail capacity for passenger carriage on a commercial basis, the possibility of state support for the acquisition of trains as well as the potential nature of long-term agreements on capacity, timetables and infrastructure fees. He also proposed a meeting with the minister to discuss the company's plans in greater detail.

Elron CEO: Lux plan indicates desire to prevent Elron bringing new trains to market

"It's difficult for me to comment on their plans," Ossip told BNS, "But one could assume that our wish to bring more comfortable trains to the Tallinn-Tartu route is not to their liking. I see in their statement indications of a wish to slow down or prevent the bringing of new trains to the market by us."

He regarded Lux Express' wish to enter the passenger rail market as a means of pressure rather than a serious plan, although the latter could not be ruled out entirely either. If the bus company were indeed to enter the market, Elron would welcome it as competition drives progress, he said.

Editor: Editor: Aili Vahtla

Source: BNS

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