Railway operator expects Belarusian transit to boost business in 2018
State-owned railway company Eesti Raudtee (EVR) expects freight volumes to grow by 6 percent this year, mainly based on Belarusian transit goods. CEO Erik Laidvee told ERR's Vikerraadio that they expect this positive trend to continue.
Eesti Raudtee's budget for 2018 is based on the assumption that its freight volumes will increase by 12.9 million tons. In addition to the Belarusian transit business, other new projects connected to third-country transit, primarily in Central Asia, are a reason for optimism, Laidvee said. A plan is also in the works to enter the container freight business between Sweden and China.
Inside Estonia the company mainly moves oil shale, gravel for road construction, and chemical goods produced by Viru Keemia Grupp (VKG).
While infrastructure and rolling stock are ready for the Chinese transit business, they were waiting for certain tariff reductions planned to be granted to China's regions to support the local economies. "The reductions have unfortunately not been granted yet," Laidre said. "Without them, the freight train can't compete with maritime transport, even though the transit time is shorter."
Arrest of Fedorenko not influencing transit business
In December the Internal Security Service (ISS) arrested one of the company's managers, Sergei Fedorenko. He is suspected of corruption. Though Fedorenko's arrest damages the company's reputation, it generally hasn't affected transit, Laidvee said.
Cooperation with the Russian state railways was constructive, and current changes in their organization are overall working to Eesti Raudtee's benefit, he added.
The passenger train business also contributes to Eesti Raudtee's income, as it acts as the infrastructure operator and gets paid a fee by the passenger train operators. Their business has also been going well, which means Eesti Raudtee's revenue from that source has increased.
Adding to the company's revenue are also contributions by the European Union's cohesion fund as well as support by the state.
Editor: Dario Cavegn