ESTONIA: A strategy to privatise national rail freight operator Operail was backed by the cabinet on February 15.
The government had instructed Operail to prepare plans for a sale last autumn.
‘Rail transport is a volume business where small quantities and short journeys do not pay off’, said Operail board member Merle Kurvits. ’Unfortunately, in the context of railways, Estonia is a very small country. Moreover, geographically we are located at the endpoint of the railway network. Therefore, it is difficult to achieve profitability by operating solely on the Estonian rail freight market.
‘Selling the company to a private investor allows Operail to expand its operational scope towards Europe, which is a competitive advantage in a volume business. This also contributes to the preservation and development of the railway as the most environmentally friendly and safest mode of transport in Estonia. This in return boosts our industrial and logistics sectors and consequently, the overall Estonian economy.’
The timeline is still to be decided.
‘We will do our best to ensure that the process is both correct and fast, because Operail’s business activities on the Estonian freight market are currently unprofitable, but today we have the resources and potential that could bring significant benefits to both the future private owner and the Estonian railway sector’, said Kurvits.
EVR Cargo to Operail
Operail was created in 2018 by renaming EVR Cargo, as part of a strategy to move away from being solely a rail freight operator.
EVR Cargo had been set up in 2009 as the freight business of railway holding company Eesti Raudtee, which had been renationalised in 2007 following a period of private ownership.
Operail expanded into international wagon leasing as well as freight operations in Finland, but following a change of government strategy the lease fleets and Finnish business were deemed non-strategic assets and sold.
