The savings to be made will include the cancellation of a plan to electrify two rail lines south of Tartu, and will come to around €300 million.

The Tallinn to Tartu rail line is due to be electrified by 2024, with the required locomotives on order; at present Elron operates diesel passenger trains, which sport a distinctive orange livery.

At the same time, the state has been subsidizing passenger rail travel over the past year to the extent that less than a quarter of funds come from ticket receipts.

Estonian Railways (Eesti Raudtee) operates rail track in Estonia, while Elron runs passenger trains. State-owned firm Operail is responsible for most of the freight transport.

The rail plan covers the period 2021-2028 and excludes the construction of the north-south high-speed Rail Baltica project, which is an entirely separate entity.

Ministry official: Rail travel in Estonia a key service

Sander Salmu, deputy secretary general for mobility at the Ministry of Climate, told that the plan's calculations are correct on a broad scale, and while the electrification of the railways nationally entails some additional costs on top of an increase in speeds up to 160 kilometers per hour, investments are key for passenger comfort and for the environment.

Salmu said: "We were simply fortunate to have been, for a very long time, in a situation where freight transport brought enough income to the railways that we did not have to subsidize Eesti Raudtee."

"From an EU perspective, this was exceptional. In other countries, in any case, the state supports rail transport, and now we have reached that situation too."

"The situation is the same with the roads. The Transport Board (Transpordiamet) budget is essentially a subsidy to maintain the roads," he went on.

"Today, we have a road usage fee just for trucks, to the amount of €20 million. On average over the years, over €200 million in road investments get made each year," Salmu added.

Under the terms of the revised plans, the Tartu-Valga and Tartu-Koidula lines, which run from Estonia's second city to the Latvian and Russian borders respectively, will now not be electrified, in order to make savings.

On the other hand, the near €300-million Tallinn to Tartu and Tallinn to Narva full electrification will go ahead.

In any case, rail operator Elron has ordered new electric locomotives from Škoda, to service the Tallinn-Tartu line, and which should start arriving in-country from early 2025.

No electrification south of Tartu, no full extension to Haapsalu

Salm said that extending electrification south of Tartu was now off the table, due to a lack of funds relating to rising construction prices. These lines are also not heavily used by passengers, Salm noted.

The matter is not entirely dead and buried, Salm added, but it might in future mean battery electric multiple unit (BEMU) locos, which can be recharged, get looked at more seriously.

The second, €900 million stage of the construction of the Haapsalu rail extension has also been struck off. The Turba-Risti extension is already built, while the full line to Haapsalu had been planned for a 2028 completion. Haapsalu had in the past been connected to the capital by rail, but the link became disused in the 1990s.

All remaining rail infrastructure plans remain in place, Salmu said.

Passenger train transport remains an integral part of the state's plans, he added; comparing this mode of transport to long-distance buses is a case of apples and oranges, he noted.

Trains are faster, safe and, when electrified and using renewable sources, less polluting than buses, Salm said.

While buses have their place too, inter-city connections are largely conducted on a commercial basis by private sector hauliers; there is no need for any additional taxpayer funded subsidies here, while bus companies also pay excise duty on the fuel they consume.

"If you also look at the popularity and usability of trains, it is also one of the functions of the state to guarantee and provide these services to the residents," the deputy secretary general said.

State subsidizes passenger rail to around 75 percent of total cost

The decline in eastbound freight rail traffic has hit the profitability of rail in Estonia, with the deficit largely made up by the taxpayer.

Last year, 7.1 million passenger trips were made on Elron trains in Estonia, earning that company €20.1 million (€2.80 per trip on average), while state support towards this service came to €35.8 million over the same period, or €5 per trip.

Losses relating to the end of freight rail transit to Russia cost Eesti Raudtee the bulk of the €29.6 million losses of the past year ERR reports; this means on top of the subsidy for passenger rail (see above) paid to Elron, €3.40 covers Eesti Raudtee losses, totaling €12 – meaning in the case of passenger transport, the taxpayer pays an average of over 75 percent of the ticket price (ie. €12 minus €2.80).

The Eesti Raudtee infrastructure action plan for 2021-2028 budgeted €842 million; the breakdown of major objects was: €274 on electrification and €154 on signaling and control systems.

Defense considerations

Another consideration relates to defense.

The Ministry of Defense has recommended the Valga-Koidula former line in Southeastern Estonia be reconstructed for the transport of military equipment to and from the Nursipalu training area, in Võru County.

The estimated cost for this project is set at €70 million; Salm said that whether these funds can be found will be clearer in January, when the decisions of the EU's military mobility application round have been announced.

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