PRIVATISATION of Eesti Raudtee, the largest component of Estonia’s state-owned railway responsible for freight and main line infrastructure, suffered a major setback on February 28 when Rail Estonia lost its status as preferred bidder.

RE failed to convince the privatisation agency EPA that it had a strategic investor on board and its financing plans were robust. RE’s credibility was irreparably holed below the waterline when it was reported a few days earlier that its Project Manager, Tony Massei, had fled the USA after an appeal against a 41-month jail term failed. Apparently, he had been convicted in 1995 under the name of Antonio M Angotti of money laundering and fraud in California.

A court in Tallinn had already ruled in January that EPA could not conclude any deal until a case brought by rival bidder RER had been heard (RG 3.01 p139). RER wants the bidding re-opened, and proceedings commenced on March 14. However, this did not stop EPA from declaring Baltic Rail Services the new preferred bidder and opening negotiations on this basis. BRS is 25·5% owned by Ed Burkhardt (late of Wisconsin Central) through his company Rail World Inc, 25·5% by Jarvis International, and 44% by the OÜ Gangier Invest group led by two Estonian businessmen. Financial backing comes from a syndicate led by Hansapank and Swedbank. T