Cost of Estonia's free public bus transport continuing to rise
Since the second half of 2018, riders have enjoyed free public transport on county bus routes throughout much of Estonia. At the time, the state subsidized the service with nearly €35 million, but according to current estimates, free bus transport needs at least €60 million in state budget support next year, and even that may not actually suffice.
Regional public transport centers will be submitting their financial needs and requests to the Transport Administration this month. Based on this information, the Transport Administration in turn will propose to the Ministry of Economic Affairs and Communications whether paid tickets might be reintroduced on county bus routes — and at what prices. Currently, the majority of county bus routes across Estonia are free.
According to the national transport authority, they have not yet received any requests to increase the price on any routes. Ain Tatter, director of the Economic Affairs Ministry's Road and Railways Department, likewise said that instructions from above are not to make any major changes to free bus transport, at least not in the first quarter of next year.
"In a high-inflation environment, it wouldn't be wise to make significant price adjustments, thus further aggravating this inflation," Tatter explained. "Plus the fact that there is a significant amount of uncertainty surrounding the input prices caused by fuel prices."
According to the official, based on an analysis of the first quarter of 2023, the ministry will examine and clarify what budgetary options actually exist and whether any adjustments to ticket prices will be necessary or not.
Riders have been able to take county buses for free throughout much of Estonia since the second half of 2018. At the time, the state subsidized the service with nearly €35 million, increasing its subsidy to more than €40 million the following year. Tatter said, however, that current estimates put the state budget support needs of continued free bus transport next year at more than €60 million.
"Now if we look at Bank of Estonia forecasts for the consumer price index (CPI), fuel, then indeed, realistically speaking this money likely won't be enough," he said. "If the price environment doesn't see any significant changes, then it will indeed be necessary to find additional resources from somewhere."
Approximately €90 million has been earmarked in Estonia's state budget for public transport subsidies — which are also meant to extend to ferries and planes as well. One potential source of additional funding would be to hope that expenditures on the ferry or plane side aren't incurred at planned volumes, or that some sort of surpluses crop up that could be redirected to subsidize bus transport instead.
Nonetheless, another possible option still being floated is reintroducing paid bus tickets, if necessary, in parts of the country where right now, people can still ride the bus for free, Tatter acknowledged.
The department director said that the ministry will conduct an analysis based on first quarter data to determine how big the deficit might be and what potential sources of cover exist for it.
"It is a matter of political will — if we can't manage [financially], then ticket revenues are one component that could be used to cover the increase in costs," Tatter explained. "But that will already be a decision of whether this deficit will be covered from additional funding from the state budget or from ticket revenues. That is the actual dilemma."
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Editor: Aili Vahtla