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Pending Supreme Court ruling, state might have to pay €2.8m to Edelaraudtee

Edelaraudtee train in 2013.
Edelaraudtee train in 2013. Source: Postimees/Scanpix

The Tallinn circuit court ruled against the Estonian government in its dispute with former passenger train operator Edelaraudtee AS over income the company lost as a result of the termination of its public passenger service contract. If the ruling is upheld by the Supreme Court, the government will be required to pay Edelaraudtee €2.8 million.

In November last year the Tallinn circuit court ordered the Ministry of Economic Affairs and Communications to pay Edelaraudtee €2.2 million in direct material damages arising from the early termination of a contract concluded in 2009, and €561,000 in compensation for lost income, the court's spokesperson Anneli Vilu told BNS.

The court also ruled that Edelaraudtee be paid a fine to compensate the company for the delayed payment of compensation for the cancelled contract, and for the state to carry the company's legal expenses in the amount of €66,500.

With its decision, the circuit court overturned a ruling of the lower-tier Tallinn administrative court of Dec. 1, 2016 that ordered the government to pay the former train operator €2.1 million in direct material damages, but did not satisfy the remaining complaints of the company.

Vilu said that the case has already been taken to the Supreme Court.

The government discussed matters related to the termination of the passenger service contract with privately-owned Edelaraudtee at its meeting on Thursday, with Minister of Economic Affairs and Communications Kadri Simson (Center) briefing fellow ministers on the ongoing legal dispute.

Manager of Edelaraudtee, Alar Pinsel, refused to comment.

Edelaraudtee AS lost its contract when state-owned operator AS Eesti Liinirongid (Elron) took over in 2014. The change was made when new trains supplied by Stadler Rail arrived.

The Supreme Court has previously deemed the direct awarding of the passenger service contract to Elron to have been justified, as European Union law offers wider possibilities for the direct awarding of contracts in rail passenger transport, considering that any passenger rail transport arrangement will always depend on government subsidies.

Edelaraudtee discontinued operating diesel powered rail passenger services in Estonia in 2014, when the public service contract was awarded to Eesti Liinirongid AS, a state owned company operating under the Elron brand. The change took place upon the arrival of brand new passenger trains that Estonia had commissioned from the Swiss manufacturer Stadler.

Editor: Dario Cavegn

Source: BNS, ERR

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