Operail: We should not be forced to make economically harmful decisions

Operail freight train.
Operail freight train. Source: Raul Toomsalu/Operail

The board of state-owned freight rail firm Operail has fulfilled all the expectations of the state, in relation to rail transit of goods of Russian and Belarusian origin, while that same state cannot intentionally make economically harmful decisions on this or any other matter, the company says.

The company said Thursday: "The purpose of the operation of every business enterprise, including every state-owned enterprise, is to make a profit and avoid losses for the owner.

"Knowingly harming a business enterprise and in doing so causing financial damage to other creditors is unacceptable both ethically, and in the eyes of the law," the Operail statement went on.

Nonetheless, the company is discussing halting all trade with the Russian Federation, nearly 10 months after Russia's invasion of Ukraine began.

"Today, Operail's management board, supervisory board and owner, are discussing jointly the complete cessation of the transport of goods of Russian origin."

"If the owner confirms the new expectations, the council must also approve the decision, then the board will receive new guidelines for action," the statement continued.

The company also hit out at Foreign Minister Urmas Reinsalu's calls for Operail to suspend all trade of any kind with the Russian Federation.

"Regardless of what Urmas Reinsalu thinks, the board of a state-owned company has no legal right to make decisions which are economically harmful to the company, based on their own opinion or ethics," the company announced.

Operail said that the introduction of additional restrictions will only worsen its competitive position as a state-owned company, since private sector companies and also Latvian and Lithuanian state-owned companies can continue to transport Russian goods.

The company's board chair, Raul Toomsalu, and board member Merle Kurvits, said Thursday that expectations of the owner, ie. the Estonian state, confirmed by the minister in spring (Reinsalu was not foreign minister at that point – ed.) Operail must engage in profitable economic activity and maintain it ability to transport goods on the Estonian rail infrastructure, while at the same time fulfilling all sanctions on Russian and Belarusian companies, and gradually withdraw from business relations with same.

Termination of the transportation of goods of Russian origin will lead to a freight volume reduction of another 65-70 percent, on top of that contraction already experienced in the new year, Operail says.

Freight transport has fallen by around 50 percent on year, and over 200 employees in the sector have lost or are about to lose their jobs.

Speaking at the government's regular Thursday press conference, Reinsalu said Operail should forgo all and any business related to Russia, even that which is legally permissible, on the ground of it being morally unacceptable for a state-owned company to engage in such activity.

Operail is conducting its scale-down gradually, to minimize losses while it looks for replacement sources of those goods transported which are generally not available in Europe.

Finnish public broadcaster Yle reported earlier this week that Operail was preparing to haul nickel, of Russian origin, within Finland's own domestic rail network and replacing that country's national rail carrier VR in the task.

Operail has also divested itself, or plans to divest itself, of its rolling stock and related rental businesses in Ukraine, as well as in Finland, Kazakhstan, Mongolia and Uzbekistan, by the end of this year, ie. in the next three-and-a-half weeks.


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Editor: Andrew Whyte, Barbara Oja

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