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Estonian agreement

01 Jun 2001

THE LONG-RUNNING saga of Estonia's rail privatisation moved a step closer to completion on April 30, when the Estonian Privatisation Agency signed a formal agreement with the Baltic Rail Services consortium on the last day allowed under the privatisation legislation. The transaction cannot be concluded because a Tallinn administrative court ruling on April 16 suspended the actual privatisation of Eesti Raudtee - although not the signing of the contract.

Selected as preferred bidder following the disqualification of Rail Estonia, BRS is 44% owned by the Estonian group Ganiger Invest, with 25·5% held each by US-based Rail World Inc and British infrastructure group Jarvis Rail. The remaining 5% is owned by Railroad Development Corp of Pittsburgh. Financing is being provided by a syndicate of Estonian and international banks led by Hansapank and Swedbank.

BRS will pay 1bn kroons for a 66% stake in Eesti Raudtee, which owns the track, locomotives and freight rolling stock, and operates freight services. The consortium will be required to invest in modernisation of the track, and is expected to replace a substantial proportion of the locomotive fleet within the first year. Top priority for upgrading will be the Tallinn - Narva line, where transit freight is the principal source of revenue.

  • ER has awarded a contract worth 60m kroons to EVR Koehne for track renewal on the 8 km Auvere - Soldina section of the Narva line and the 10 km Vägeva - Pedja section of the Tallinn - Tartu route.