Estonia’s EVR Cargo receives first new container platforms

A total of 30 new platforms belonging to the company were completed in Russia last week. The rest of them are expected to arrive in the next few months. The company will then also pay the first installment, which is approximately 17.8 million euros.

EVR Cargo in June entered into a 17.8 million euro contract to purchase 300 container platforms and 200 gondola cars and this is the first part of the company's 35 million euro investment to purchase new cars.

The company is purchasing the cars directly from two Russian factories, while earlier, these kind of purchases have been made through mediators. According to the plans, the first cars should have been handed over to the company in June and the last ones in August 2017.

The company is planning to rent the container platforms out to international major customers servicing the carriage of goods between China and Europe. The gondola cars are planned to be rented out for the carriage of bulk on the expanding Russian internal market.

The Federal Authority for Transport Oversight (Rostransnadzor) of the Ministry of Transport of the Russian Federation last year implemented a restriction, which does not allow for the extension of the authorization for use of over 22-year-old railway cars in the country. The restriction meant that more than 200,000 cars had to be written off. There was a deficit in supply and the rental prices of cars increased.

Raul Toomsalu, CEO of EVR Cargo, said that the company's advantages in Russia are favorable debt finance and the necessary business know-how. Altogether 1.1 million freight cars are in use in Russia, while 1,000 of them make up Estonia's share.

Toomsalu said that from the transaction EVR Cargo is expecting approximately 3.3 million euros in rental income per year.

EVR Cargo is an Estonian state-owned rail cargo operator, whose main business avenues include carriage of goods, repairing railway engines and freight cars as well as renting out freight cars. With the new freight cars, EVR Cargo's rolling stock will consist of 66 engines and 3,022 cars. The company's average number of employees in 2016 was 684 people.