CEO: Rail carriers expect lower fees and help competing with road transport
Operail CEO Merle Kurvits says freight carriers expect the government to cut domestic rail charges and create conditions that would shift more transport onto rail. She disagrees with Climate Ministry official Ain Tatter, who claims[1] Estonian Railways' growing losses are inevitable. Ain Tatter, head of the Climate Ministry's road and rail department, told ERR in an interview last week that Estonian Railways (Eesti Raudtee) is public infrastructure and its costs are comparable to those of maintaining roads.
He said that due to the current geopolitical situation, officials consider the company's growing losses -- amounting to tens of millions of euros each year -- to be inevitable. Merle Kurvits told ERR she disagrees with Tatter's position that the rail network's deficits are unavoidable and that freight transport has no future. "Absolutely not.
Every crisis presents opportunities and we can't keep doing things a certain way just because that's how they've always been done," Kurvits said. According to her, the government has shown little willingness to take freight carriers' proposals into account. She also believes there has been too much focus placed on the future completion of Rail Baltica, while the present is being underutilized.
"We keep waiting for Rail Baltica as if everything will magically resolve once it arrives -- that freight will start moving again and the corridors will reopen. But I would argue that even now, there are opportunities to move freight domestically by rail and to start laying the groundwork for a pan-Baltic corridor," said Kurvits. "We can't afford to sit around waiting for Rail Baltica to be completed.
Modal shift takes time, and if the right decisions aren't made today, much of its potential will go unused even once it launches," she added. Proposed changes According to Kurvits, freight carriers have proposed that the government lower domestic infrastructure charges through adjustments to the minimum access package, revise tariffs for small trains and empty wagons, reduce reserve movement charges for locomotives and establish a pricing framework appropriate to the scale of a small country -- one that remains competitive with both neighboring countries and road transport.
"It's important to stress that any reduction in infrastructure charges must actually reach the cargo owner -- just as the state supports passenger fares," Kurvits said. "If the reduction doesn't show up in per-ton pricing, there won't be a shift in freight volumes toward rail. That's why infrastructure pricing policy must be directly linked to lower freight rates, so cargo owners see a clear benefit and make a conscious choice in favor of rail."
Various wagons. Source: Operail
She pointed out that compared to Estonia, Latvia and Lithuania apply a broader segmentation model -- distinguishing between cargo types (such as materials for Rail Baltica construction), multimodal train fees, train lengths and empty runs. "This allows them to reflect the actual paying capacity of different market segments and set more flexible rates. In Estonia, we have significantly fewer segments and a flatter pricing structure, which puts a proportionally heavier burden on the system and reduces competitiveness in our small-country context," she added.
Kurvits emphasized that EU law does not prescribe a fixed formula, meaning each country has discretion in how it develops its pricing methodology. "Estonia should exercise that discretion more boldly. A small country with a vulnerable market needs more flexible solutions than just cost-based logic. If we assess paying capacity only on current rail volumes and ignore cargo that has already shifted to roads, then the methodology is flawed.
In that case, rail becomes even less competitive and volumes may be lost permanently. That's exactly why discretion must extend to revisiting both the minimum access package and pricing methodology," she said. She added that it's certainly possible to apply for exemptions within the EU framework -- especially given that Estonia, as a country heavily affected by Russia's war of aggression, needs special conditions to keep its rail sector competitive while meeting both climate goals and security needs.
"If we set a target of shifting even 25 percent of domestic freight to rail, we're already talking about nearly a million [metric] tons," Kurvits said. "And in terms of cargo groups, with Rail Baltica currently under large-scale construction, crushed stone is a clear candidate for preferential treatment -- along with other bulk goods that could be moved off the roads and onto rail. Peat and timber should also, in broad terms, be transported by rail." Unfair competition
Kurvits pointed out that competition between road and rail freight is currently unequal, as trucks pay significantly lower infrastructure charges. "One solution, which we also agree on with Estonian Railways, could be to link road tolls for trucks to those cargo types or distances where rail offers a real alternative," she suggested. Kurvits stressed that rail transport is nearly five times more environmentally friendly than road freight -- even when using diesel locomotives -- but shifting cargo to rail requires a rethinking of pricing policies and operating conditions.
She also emphasized the national security dimension: freight rail plays a critical role in military logistics, but this capacity depends on maintaining a viable commercial base. "If the economic conditions for freight rail collapse, that capability disappears as well," she said. "The government's own transport program clearly states that shifting domestic freight to rail could reduce heavy truck mileage by 44 million vehicle-kilometers per year. That should be our common goal -- a concrete and measurable step that brings clear benefits to the environment, road maintenance and economic competitiveness," Kurvits said.
As of 2024, she noted, rail's share of land-based freight transport has fallen to around 12-13 percent. The national target for 2029 is 17 percent. Operail has submitted its proposals in connection with the draft Transport and Mobility Development Plan for 2026-2029.
--
Follow ERR News on Facebook[2] and X and never miss an update!