The Ministry of Regional Affairs and Agriculture plans to significantly increase price ceilings on Estonia's county bus fares, hiking the price ceiling on single-journey fares to €10 and monthly bus passes to €150.

Speaking to ERR late last week, the regional affairs minister stressed that this doesn't mean that they are currently planning on hiking fare prices themselves. She noted that fare and ticket prices are currently localized, applying only to specific smaller regions, but that counties are working together to ensure that fares can apply to broader areas as well.

"Which means that we need to review the pricing policy here, meaning make the entire system more flexible, not go increase [the cost] for a specific person's moving from point A to point B," Hartman explained.

What the ministry wants to do by increasing these price ceilings is expand the areas in which specific fare prices apply, she continued.

"If these regions grow bigger, however, it's likely that fare and ticket prices may also change, so we can come up with different products," the minister said. "These price ceilings still need to be reviewed from time to time, and the idea behind this bill is moreso to restructure the setting of fare and ticket prices."

Hartman added that the entire focus of public transport is currently on Estonia's mobility reform and on considering how to boost local public transport as well as improve its accessibility in less populated areas. She confirmed that before the next leap in quality is achieved, pricing policy will remain on the back burner.

Currently, Estonia's public transport system is €33 million short of remaining operational at current volumes this year, and at least €45 million short next year.

The regional affairs minister noted that the reason for the annual subsidy deficit is the government's decision to freeze public transport funds, meaning that each year's budget contains the same amount of funding.

This means that there will always be a deficit, but the government will reach an agreement for covering it.

"The government has reached an agreement this year too, and made the decision that we will come help with a subsidy, because it's clear that public transport cannot come to a halt," she said. "We must ensure bus services; we must ensure ferry services. But this is simply an additional decision that we have to make within the government."

According to Hartman, the goal is to come up with a proposal this fall to put an end to this situation where each year, the system is known to be in deficit, and that due to the wrong system of funding.

She confirmed, however, that raising fare and ticket prices is not the only answer.

Commercial routes, more targeted subsidies

In the case of the current subsidy, the agreement is that this will be drawn from the state reserve. Nonetheless, the proportion of revenue should be reviewed for future purposes, and prices in certain places have been adjusted.

Currently, 80-90 percent of Estonia's total public transport budget is funded by the state, and a smaller share directly from people's own pockets, and according to Hartman, the question is whether we can get by in the future at this ratio.

"Our focus today is to consider how to make this system more efficient, how to get commercial services that withdrew from the market because of free public transport back on routes that actually have commercial capacity," the minister said. "And how to focus subsidy money specifically on those regions that are less populated areas, where commercial routes wouldn't be viable but people still need public transport to reach school, work, kindergarten and various public services."

While the goal of the bill is to make the system more flexible, not raise prices, Hartman emphasized that should the minister indeed ever start modifying fare and ticket prices by ministerial directive, this will be discussed with Estonia's public transport centers and local governments in advance, and it will be announced well in advance as well.

Asked what will happen next year – if there will be no extra money coming from the budget and fare and ticket prices aren't raised, leaving reducing bus service volumes as the only seeming option – the minister replied that talks regarding next year's budget still lie ahead.

"I hope we'll be able to get this subsidy down precisely because we have the opportunity to work with various parties to bring solutions to this system, to work together with commercial services too," Hartman said. "We'll surely still be left with some degree of shortfall next year, but I'm saying, we'll be having these discussions in August and September."

The regional affairs minister stressed that public transport must be made more accessible to people, noting that this is one area where she certainly doesn't want to make any concessions, but she is awaiting discussion in the government to agree on further steps.

She added that the bill in question has only just been sent to various partners for a round of coordination, and that the ministry is now awaiting feedback on it.

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