Sanctions hit core operations of Estonian Railways

Photo: Wikimedia Commons. Ivo Kruusamägi

Estonian national rail operator Eesti Raudtee claims it lost over 20 million euros in 2022, mostly due to the sanctions that the EU applied on Russia and Belarus. The Estonian government is ready to mitigate 12 million euros, leaving 8 million of losses uncovered. According to the company, “the deficit for 2023 is expected to be even higher, at 25 million euros”.

Rail freight in Estonia has recently experienced a small growth, mainly due to the transportation of oil shale. Oil shale is an organic-rich fine-grained sedimentary rock containing kerogen from which liquid hydrocarbons, and therefore energy, can be produced. Moreover, the transportation of wood for the same purposes has helped Estonian rail freight to increase.

The concrete impact of the sanctions on Estonia

However, as Eeste Raudtee mentioned, in 2021, the deficit ran at 16,4 million euros. During that period, there was an average of eight freight trains crossing the three Estonia-Russia border crossings every day. Currently, because of the sanctions, only three trains a day cross that border. This trend reflects that the sanctions on Russia and Belarus may therefore be more damaging for countries such as Estonia and the other Baltic countries.

The Estonian company has also warned that the process of track electrification may experience delays due to issues faced by grid operator Elektrilevi and electricity supplier Elering. Moreover, the restoration of the Valga-Antsla-Võru-Koidula line, in South Estonia, is also likely to be affected by the recent financial losses.

On the other hand, the process of renovation of the Tallinn-Tartu line will still take place in 2024. In addition, the planned Haapsalu rail extension is not expected to be delayed by the sanctions and their impact. One final problem, according to Eeste Raudtee, is the reluctance of the EU to provide infrastructural support when it comes to the Russian gauge, possibly threatening the full operativity of the Tallinn circular rail link.

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Author: Marco Raimondi

Marco Raimondi is an editor of RailFreight.com, the online magazine for rail freight professionals.

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