Free country bus lines struggling with rising fuel costs

A free bus in Vijandi.
A free bus in Vijandi. Source: ERR

The Transport Administration is calling for additional funding in the supplementary budget to help cover rapidly rising fuel prices. Contracts signed several years ago fail to deal with the issue.

A basic rule for public transport is the higher the price at the petrol pump, the more people there will be and the higher the ticket prices need to be, ETV's "Aktuaalne kaamera" reported on Sunday night.

However, this rule cannot be followed by bus lines in the Estonian countryside which are free to use. Budgets and contracts were negotiated long before prices rose.

Go Group head Jüri Etverk said, according to the contracts, it is necessary to use gas buses but compensation is based on diesel prices. However, he said while diesel has increased by 70 percent, the price of gas has gone through the roof and risen by 200 percent.

"In their contracts, these one-month losses can be between € 20,000 and €30,000 per contract," he said.

As the company has free lines across the country, Etverk understands the problem well. But it is not the only one. Problems also arise based on the indexation of the consumer price index.

"This consumer price index works very well in a more or less stable or calm growth environment, 3 to 5 percent a year is all right, but when such abrupt changes take place, it is very, very painful," he said.

Contracts can be adjusted in July, but Etverk is not optimistic because they will be based on fuel prices at the end of 2021 and the start of 2022. He estimated losses of about €500,000 over the last two months and believes it will only get worse in March as prices are still rising.

"These agreements are designed by the state in such a way that it is basically impossible to cancel them because you will spend the next life in a debtor's prison," he said.

"On the other hand, as optimistic people, we cannot rule out the possibility that there are reasonable officials in the Transport Administration and the ministry who understand this problem."

The Transport Administration has already negotiated with public transport centers and a meeting will be held with bus companies this week. The agency has money to cover the indexation in July.

"If the price rises continue at the same pace as it has now, we have submitted a request for additional funds for public transport in the supplementary budget," said Director of Mobility Planning at the Transport Agency Martin Lengi.

Last year, €50 million was spent on free public transport in the countryside and this year the budget is €56 million.


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Editor: Helen Wright

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