Estonian Railways' annual losses and government subsidies have grown steadily — from €5 million in 2016 to €30.7 million last year — with projections reaching up to €50 million by 2030. Officials say the shortfall is largely inevitable, driven by declining freight volumes due to the pandemic and later, EU sanctions on Russia.

"Estonian Railways is public infrastructure," said Ain Tatter, head of the Ministry of Climate's roads and railways department. "Just like the Transport Administration maintains roads, Estonian Railways maintains the public rail network."

At its peak, the company moved 40 million tons of cargo; today, it moves only about 3 million. According to Tatter, the break-even point is 20–25 million tons, but without freight from Russia, "we're simply not going to reach that threshold."

He added that Estonia is now closer to the European model, where "on average, 20 to 30 percent of costs are covered by access fees from operators, and the rest is state aid." Currently, Estonian Railways covers less than 40 percent of its costs through access fees.

While the government aims to increase cargo volumes, Tatter said the domestic market has limited potential: "There are very few transport sectors where rail is truly an alternative to road. Figuratively speaking, rail won't get bread to the stores."

He also noted that new investments— like raising speeds and electrifying tracks — are reflected in growing depreciation costs. "There's no forecast suggesting a drop in losses," he said. "That would require a sudden spike in domestic freight, businesses haven't indicated where that would come from."

--

Follow ERR News on Facebook and X and never miss an update!