The Estonian government decided at its cabinet meeting on Thursday to give €1.7 million to Edelaraudtee AS, the former operator of regional trains in Estonia, in connection with the loss of income resulting from the termination of the company's public passenger service contract in 2014.
The government decided to pay Edelaraudtee €1.7 million euros in connection with the early termination of the contract, Minister of Economic Affairs and Infrastructure Kadri Simson (Center) said at Thursday's government press conference.
This is the amount of money that the state recognizes as damages resulting from the early termination of the agreements, Simson said, adding that a legal dispute is ongoing as Edelaraudtee is seeking greater compensation.
Tallinn Circuit Court in November ordered the Ministry of Economic Affairs and Communications to pay Edelaraudtee €2.2 million in direct material damages arising from the early termination of the contract concluded in 2009, and €561,000 in compensation for lost income. If the judgment is upheld by the Supreme Court of Estonia, the government must pay Edelaraudtee roughly €2.8 million in total.
The court also ordered Edelaraudtee to be paid a fine for delay for a period from Oct. 8, 2013 to the date of the payment of compensation, and well as to be compensated for legal expenses in the amount of €66,500.
The circuit court overturned a judgment of the lower-level Tallinn Administrative Court from Dec. 1, 2016 which ordered the government to pay the former train operator €2.1 million in direct material damages but did not satisfy the rest of the complaint.
The case has been taken to the Supreme Court.
Previously, the top court has deemed the direct awarding of the passenger service contract to the state-owned company Elron to have been justified, as EU law offers wider possibilities for the direct awarding of contracts in rail passenger transport considering that passenger transport by rail is possible only with co-financing by the government.
Edelaraudtee discontinued the operation of 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.
Elron currently operates 38 trains on Estonia's domestic routes. It is unknown how many old trains used to belong to Edelaraudtee's fleet.
Editor: Aili Vahtla