Estonian Railways looking for partners in Central Asia to offset losses

A section of rail track in Estonia (photo is illustrative).
A section of rail track in Estonia (photo is illustrative). Source: ERR

State company Estonian Railways (Eesti Raudtee) is looking for new partners in Central Asia to help offset losses caused by Russia's war in Ukraine and sanctions.

Feight volumes have been steadily falling over the last few years, but the quantity has fallen by more than half since the outbreak of war on February 24.

Last year, 12.8 million tons of goods were transported by Estonian Railways and it is likely to half this year to a record low.

As the volume of freight falls, so do the fees paid to the state company. This means investments will either be delayed or additional funding will be required.

"We are very worried. We still have very big investment plans and it was planned to invest some of our own funds. So to co-finance, we will need a loan on top of this. It is a very big problem, how can we do everything when our own resources are decreasing," said head of Estonian Railways Kaido Zimmermann.

The government has already increased its funding for the company from €17 million to €24 million this year.

Minister of Economic Affairs and Infrastructure Taavi Aas (Center) said another solution is to find goods to export from Ukraine or, more likely, Central Asia where countries are looking to turn away from using Russian ports.

Aas said, at the moment, cargo vessels are either failing to find insurance to let them sail to Russian ports or it is very expensive.

"That is why Central Asian countries, especially Kazakhstan and Uzbekistan, are looking for new outlets. There are not many options, the Baltics are there. Some contacts already exist. If we get these goods here, then actually it would be a perfectly decent replacement for the goods from Russia," he said.

Head of the Port of Tallinn Valdo Kalm said the issue is related to bulk cargo not liquid cargo. Searches have started but questions remain.

"And really, we ourselves are also optimistic that some new corridors will emerge, either bypassing Russia or, as they say, by finding new ones," he said.

Zimmermann said the first agreements have been signed with Kazakhstan and goods may start moving in the near future.


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Editor: Helen Wright

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