Kallas said, appearing in front of the Riigikogu and answering Center MPs' questions, that even though the Haapsalu railroad was excluded from recovery plan projects, the state budget has enough earmarked to finish the design.

"We had money in the state budget for the design work, to take the project forward. Construction work cannot commence without ready designs. These processes must take place one after the other," Kallas said.

Estonian Railways will move forward with designing the remaining sections of the planned railroad, CEO Kaido Zimmermann said in early September. The company signed the design contract for the Haapsalu-Saunja section in August that should be completed by November next year. A tender for the design of the Haapsalu-Rohuküla section was planned for 2022.

Kallas defended the government's June 30 decision to exclude the railroad from projects financed through the EU recovery plan, saying that adjustment was necessary since Estonia is looking at smaller than anticipated sums.

"Pursuant to the market situation and a considerable rise in prices, Estonia cannot afford to finance all planned rail investments in recent volume and time frame, which is why some need to be shelved to concentrate on those where passenger and cargo volumes and, therefore, socioeconomic effects are higher," Kallas said.

The PM said that constructing the Risti-Rohuküla section would also require funds from the state budget, while of the €89 million necessary for the construction, just €34 million previously sought from the recovery fund is available.

Kallas also remarked that the situation has changed following the European Commission's proposal to build all new railroads using the wider European track gauge.

"As concerns railroad investments, the Ukraine war means that all railroads should have the same track gauge. The European Commission has urged Member States to go over these things. Rail Baltica will definitely sport the European track gauge, while other [Estonian] railroads currently don't. We must also look at investments in this light."

The European Commission has proposed switching to a universal track gauge everywhere in Europe. The Baltics and Finland use the so-called Russian gauge of 1,520 millimeters (1,524 in Finland), while most of the rest of Europe uses the Commission-recommended 1,435 mm.

Indrek Gailan, head of the Ministry of Economic Affairs' transport development and investments department, said in early August that the Commission's proposal has no bearing on planned rail work, for example, the electrification and reconstruction of the Tallinn-Tartu railroad and the Haapsalu railroad.

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