Bus operator finds Tartu paying its competitor too much in subsidies
The bus company Sebe claims that the city of Tartu is paying an unreasonably large subsidy to its competitor, GoBus, for operating city bus routes. Both GoBus and the city of Tartu disagree with this criticism.
Since 2019, GoBus has operated Tartu's city bus routes, replacing Sebe as the previous service provider.
City buses in Tartu run on green gas.
According to Sebe's calculations, the city of Tartu has overpaid GoBus more than €7 million in subsidies for gas costs and should demand the excess funds back from the company. Tartu pays for gas based on the market price, but Sebe claims that GoBus purchases gas at a lower price than the market rate.
"When the tender was announced in 2016, the main problem was that the wrong assumption was made – that the price of gas at the pump would closely follow the market price of gas," said Mart Raamat, a member of Sebe's management board.
"The last two years, since the start of Russia's full-scale war, have shown that gas prices on the market rose much faster than prices at the pump. As a result, over the last two years, Tartu has overpaid for natural gas by around 40 percent," Raamat explained.
According to Tartu Deputy Mayor Raimond Tamm, GoBus is paid based on a per-kilometer rate. This rate is adjusted quarterly and consists of three components: the consumer price index, bus drivers' wages and fuel prices.
"We have slightly more information at our disposal than Sebe has as a competitor," Tamm said. "This means we also have access to the actual invoices for fuel purchases – showing what GoBus pays its fuel supplier. Based on these invoices, I can confirm that it is not possible to generate the kind of profit margins that Sebe has claimed in its calculations."
Ramses Riive, GoBus' south region manager, also denied that the company has received excessive subsidies for operating Tartu's city bus routes.
"The contract with Tartu is for ten years and eight bidders participated in the procurement process," Riive said. "All the terms and conditions were clear to the bidders and those who wanted to challenge them had the opportunity at the time. Back then, it was actually Sebe that contested our most cost-effective bid, claiming that it would be impossible to provide the service at that price."
Deputy Mayor Tamm added that it cannot be ruled out that during the next procurement period, gas pricing will be calculated differently than it is now.
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Editor: Valner Väino, Marcus Turovski
