New county bus contracts to deliver drivers hefty pay rise
New regional bus contracts will require drivers to be paid Estonia's average wage, increasing the amount of state funding needed to subsidize bus services.
Regional bus routes have for years operated under a sector-wide collective agreement between employers and employees that sets bus drivers' pay rates.
In 2025, the Association of Estonian Road Carriers and the Transport Workers' Union agreed that bus drivers would in future have to be paid Estonia's average wage. Contracts for regional bus routes are awarded for eight years and this year public transport centers will begin conducting the first procurements under the new terms.
"Over the next five years, all of our contracts will be renewed. Some have already been renewed, so to speak, while some are still being processed. Next year there will be two contracts and after that two contracts a year through 2031. The requirement to pay the average wage is now fully included in the new contracts," said Andrus Nilisk, executive director of the North Estonia Public Transport Center.
The calculation would be based on the previous year's average wage, or around €2,100, while bus drivers working under existing contracts that still have several years to run are being paid €1,500 this year. Their wages are increased through indexation.
"With the old contracts, wages also rise by €100 each year, so they will eventually reach roughly the same level, but under the new contracts the increase is steep," Nilisk said.
However, the wage increase would mean raising the state's annual taxpayer-funded subsidy.
"Labor costs account for about half of the price per route kilometer, so naturally this will have an impact on the subsidy. During the transition period, it will require around €1.5 million a year in additional subsidies. For the past five years, every year when the state budget has been adopted, there has not been enough funding to last through the end of the year and then additional money has been found midway through the year," said Kersten Kattai, director of the Association of Estonian Road Carriers.
The minimum salary for teachers is €1,970 this year. Estonia's median wage has been €1,750 this year. Minister of Regional Affairs Hendrik Johannes Terras would now have to seek additional funding for subsidies in order to pay bus drivers €2,100.
"I know that this agreement has been reached. It may have an impact on the bids submitted in terms of the price per kilometer. But given that relatively few of our contracts will be renewed next year, I don't expect it to have an impact on the budget," Terras said.
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Editor: Marcus Turovski, Johanna Alvin
Source: "Aktuaalne kaamera"
