According to calculations by the Ministry of Regional Affairs and Agriculture, without additional funding, public transportation will face a €4.779 million shortfall by the end of 2026.

Covering the shortfall would require reducing service on county bus routes by approximately 1 million route kilometers, equivalent to about half the annual mileage of Jõgeva County bus routes. Approximately 3,400 trips would have to be canceled on ferry routes serving Estonia's largest islands, equivalent to about two months of service. For rail service, the necessary reduction would be equivalent to approximately one month's mileage on the Viljandi route.

Existing public service contracts also make it difficult to implement additional cuts quickly, the ministry noted: Reducing service levels requires advance notice, while operating fewer services does not reduce all fixed costs by the same proportion.

"Public transportation has to keep running even when external events drive up fuel prices. We have cut costs and streamlined the route network at the ministry, but the price increases caused by the war in Iran can no longer be covered within the existing budget. That is why I am seeking an additional €4.8 million from the government's reserve," Terras said.

The ministry attributed the need for additional funding to higher oil and fuel prices following the outbreak of the war in Iran.

"Diesel and compressed natural gas prices have the greatest impact on costs. Under contracts for county bus routes and ferry services, changes in fuel prices are passed on to service prices through indexation. Fuel prices also affect the cost of air services, while according to Elron, this year's €48 million subsidy will not be enough to maintain the current level of train service through the end of the year," the ministry said in a press release.

The Ministry of Regional Affairs and Agriculture said it has already taken steps to curb cost increases: Mileage on county bus routes has been frozen, the route network has been streamlined and overlapping departures have been reduced. Low-occupancy train services have also been canceled.

"We first looked for savings in areas where passengers would be affected as little as possible. We have now reached the point where further cuts would directly mean fewer connections," Terras said.

The government increased base funding for public transportation by €54 million for 2026, Terras told ERR last fall. "At the government level, we decided that €54.74 million would be added to base funding to ensure stable and accessible public transportation for people in Estonia," Terras said.

Base funding for public transportation has stood at nearly €121 million a year since the COVID-19 pandemic and the Ministry of Regional Affairs has sought additional funding from the government reserve each year. Including the additional funding, €174 million had been allocated for public transportation in 2026, but it has now emerged that even this will not be enough.

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