The NAO conducted an overview on the development goals of the Estonian railway sector and how these goals have been implemented between 2010–2019 and how they are planned to be implemented in the future.

The NAO wanted to find out whether the state has a vision of the role that Estonian railway will play in the future movement of passengers and goods, how the set goals will be achieved and how much it could cost.

The results show the plans are contradictory and that the government's goals may not be achievable.

In the course of the review, the National Audit Office found that although current railway development strategies set the goal of shifting passenger and freight traffic from road to rail, there have been decisions made that favour the development of road transport.

Since 2005, railway development has been addressed in 15 different national strategy documents, which do not form a comprehensive plan, and the question of how and when the targets are to be met and how much it will cost remains unanswered.

"The picture given in the development plans is very mixed, and also contradictory," Auditor General Janar Holm commented on the results of the review.

"For example, the main goals are to take passengers and goods from road to rail, to reduce greenhouse gases in the transport sector, to create a rail link with Europe and to increase the speed of passenger trains. The development of railway would benefit if the goals were aggregated into a clear state policy. The advantage of rail transport over the road could be speed or lower user charges in addition to good service quality, but the current development has not so far created any convincing advantages."

The state and railway companies plan to invest more than €2.6 billion in railway by 2030. This amount includes both the needs of the existing rail network and the construction of Rail Baltic. However, considering the current practice of railway financing and the funds planned for the development of railway in the state budget for the following years, the NAO estimates that it may not be realistic to receive €2.6 billion for all railway development activities planned for the next 10 years.

"In a situation where freight transport by rail has decreased and the share of passenger transport on the railway is growing, one should decide how to optimally maintain, develop and finance the railway sector," Holm said.

"Current plans are times greater than the total investments made during the previous decade. If we want to build Rail Baltic, electrify a large part of the rest of the rail network, build a railway route to Haapsalu and at the same time build four-lane roads, these wishes altogether may be unrealistic for the Estonian state."

According to the explanatory memorandum to the 2020 State Budget Act, a total of approximately €41.5 million will be allocated from the state budget for the development of the current public rail network in 2020–2023 and a total of €344 million for Rail Baltic.

According to the explanatory memorandum to the new, 2021 State Budget Act, the amount of funds allocated to the existing railway for 2021–2024 has been reduced. More funds will be allocated to Rail Baltic with the new budget, as the Rail Baltic project reaches the construction stage.

Between 2010–2019, the Ministry of Economic Affairs and Communications has allocated a total of €522.8 million from the state budget to railway companies, of which €212.6 million were the funds from the European Union.

As in other European Union countries, the maintenance of public railway network in Estonia depends increasingly on the state subsidy, and the sector needs additional major investments to maintain the quality of infrastructure, increase safety and trains' speeds. The state-owned railway companies AS Eesti Raudtee and AS Eesti Liinirongid (Elron) do not have enough funds themselves to invest and the implementation of railway development projects depends on how much state's, the European Union's and/or CO2 quota sales money the state will allocate for the development of railway.

The project of electrification of the entire rail network in Estonia, which was added to the objectives last year, was not among the priorities of the Ministry of Economic Affairs and Communications and was started after it became clear that foreign funding is available for that and it can be one of the measures to reduce greenhouse gas emissions from the transport sector. At the same time, various parties in the railway sector have criticized the project because of hasty decisions, the lack of feasibility studies and the failure to consider alternatives.

In the review, the National Audit Office raised six questions to which the responsible ministries, agencies and railway companies should find answers and make corresponding decisions in the future.

The NAO asked what are the priority needs of railway development, what activities and in what period of time should be implemented as a matter of priority, what are the realistic plans for railway development, considering that the revenues from the business activities of the rail infrastructure companies - AS Eesti Raudtee and AS Edelaraudtee - and Elron are lower than the costs and there is no money for all the investments.

It is also necessary to decide whether and how the management of rail infrastructure should be integrated into the joint transport agency to be established, in order to ensure cost savings and integrated transport planning for both the movement of goods and passengers.

The transport program approved in February 2020 sets more modest goals for passenger train speed: the program aims to achieve a speed of 120 km/h on the railway and add additional speed up to 135 km/h on certain sections of Tallinn-Tartu and Tapa-Narva routes.

Ministry: We will create preconditions for increasing train speeds to 160 km/h

The Ministry of Economic Affairs and Communications said that while raising the maximum speed of passenger trains to 160 km/h may not become reality in the near future, the state will make all investments with preconditions that will enable to reach these speeds in the future.

Indrek Gailan, head of the department for transport development and investments at the Ministry of Economic Affairs and Communications, said that although the audit rightly points out that it will not be possible to travel by train with a speed of 160 km/h in the near future, it cannot be said with certainty that it will take 10 years or more to reach this speed.

"We are developing the railways gradually and, as a matter of priority, we will increase the speeds to 135 kilometers per hour. All investments in electrification, bend straightening and traffic management systems will be made on the assumption that we will be able to travel 160 kilometers per hour in the future," Gailan told BNS.

The audit of the National Audit Office revealed, among other things, that roads are given preferential treatment in the state's infrastructure investments. "Due to its sparse network, railways are often not an alternative to road transport, just as road transport is not an alternative to bulk rail freight, so we are developing railways and roads together because they offer mobility to people in different parts of Estonia and businesses the necessary supply of goods," Gailan said.

He stated that he agrees with the assessment of the National Audit Office that the state currently pays a lot of attention to safe roads and also to the construction of gravel roads into no-dust roads. According to Gailan, this is also the way it has to be. "Due to the dense road network, there are simply many times more road users and beneficiaries," he added.

Gailan said the €2.6 billion going to the railway does not directly put the sector in the role of an orphan. According to him, the railway is already the means of transport with the highest average speed and very popular among people.

"Thus, it is planned to build a new railway in the direction of Haapsalu/Rohukula, Rail Baltic will be completed, we will increase the speeds on the railway, increase the railway capacity, buy new trains and make the existing railway emission-free," he added.

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