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Estonian Railways stops following investment plan due to inadequate funding

Renovation work on railroad tracks in Jõgeva. Photo is illustrative.
Renovation work on railroad tracks in Jõgeva. Photo is illustrative. Source: Kristjan Teedema/Postimees/Scanpix

The supervisory board of Estonian state-owned railway company Estonian Railways (EVR) on Wednesday decided to stop following its investment plan due to insufficient state funding.

"In the state budget strategy, we requested €23 million annually for cover," AS Eesti Raudtee supervisory board chairman Priit Rohumaa told BNS on Thursday. "In spite of this money being meant for us according to the Railways Act, the government decided to allocate only €9 million in the government budget strategy. Therefore we can only make urgent investments this year and other works have been halted."

According to Rohumaa, the supervisory board hopes that the government will soon return to discussion regarding a long-term railway funding plan. "Without state funding, the railway can't cover even current expenses, which jeopardizes safety as well as railway traffic speeds," he stressed.

The railway company has previously said that in order to carry out necessary maintenance and renovation works and to preserve the quality of domestic railway, it is necessary to allocate at least €14 million annually from 2018-2021. For this sum, it would be possible to continue offering reliable railway service from Tallinn to Paldiski, Narva, Koidula and Valga as well as assure that the speed of passenger trains will remain at 120 kilometers per hour.

In an analysis carried out in 2014, consultation company Ernst & Young (EY) said that the minimum annual funding for the railway should be €31.7 million.

EVR's revenue has declined in recent years as a result of a decline in freight carriage volumes as well.

Editor: Aili Vahtla

Source: BNS

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