Public transport needs €4 million in additional funding in wake of soaring fuel prices
Due to the rapid rise in fuel prices, public transportation will need an additional €4.2 million in state funding this year. Regional public transport centers say they are prepared to partially suspend bus services if the increase in fuel costs is not compensated.
The sharp rise in fuel prices triggered by the Iran crisis was not something local governments could have foreseen when last year's budgets were drafted. As a result, the field is facing a funding shortfall because contracts with operators are indexed to costs.
According to Andrus Nilisk, head of IIL, which organizes public transportation in four counties, the center has already cut €400,000 from its budget. If the government does not provide additional funding for public transportation, another €400,000 will have to be saved.
"There are no painless options left. We've looked at the numbers and it's no longer possible to cut another €400,000 over six months through minor adjustments. That means public transportation services will have to be suspended. At the moment, we've calculated that service would need to be halted for about seven days to achieve the necessary savings and the plan is to do so on national holidays," Nilisk said.
According to Nilisk, suspending bus services on August 20 and around Christmas and New Year's would be less disruptive for passengers than cutting individual departures. Reducing departures would also generate smaller savings.
The government also discussed public transportation funding on Thursday.
"In the first quarter, the fuel price index rose by 11.5 percent and in the second quarter by about 14 percent. Based on our own estimates, fuel price increases have created an additional funding need of roughly €4 million for public transportation," said Andres Ruubas, head of the public transport department at the Ministry of Regional Affairs and Agriculture.
That figure includes additional costs for bus, rail and ferry services. Fuel accounts for 25 percent of public transportation operating costs.
"The government acknowledged the concern. They asked us to return once we have more precise information about the next quarter and present the updated figures. In the meantime, we were instructed to identify reasonable areas for savings ourselves," Ruubas said.
Ruubas said it is currently difficult to say where further savings could be found. While Regional and Agriculture Minister Hendrik Johannes Terras said at the government's press conference that additional funding would be found, Finance Minister Jürgen Ligi was less willing to make firm commitments.
"In reality, this is still only a feared scenario. Generally, the transportation system should be financed in a way that anticipates fuel price increases. Especially considering that fuel was very cheap before the closure of the Strait of Hormuz," Ligi said, adding that a decision will be made in the fall.
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Editor: Marcus Turovski, Märten Hallismaa
