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Estonia losing EUR 357 mln a year due to dwindling transit

The Estonian government is losing 357 mln euros annually as a result of the fall in transit volumes from their peak levels ten yars ago, while overall the slump in transit is depriving the Estonian economy of 510 mln euros every year, estimates by the Estonian Logistics and Transit Association indicate, reports LETA/BNS.

The total amount of freight shipped through Estonia is estimated to drop to six mln tons this year from 40 mln tons in 2006, marking a reduction by 34 mln tons. The passage of one ton of freight leaves in the Estonian economy 15 euros, hence this year 510 mln euros less is left in the Estonian economy than in 2006.

The 15 euros left in Estonia is divided as follows: seven euros to Estonian Railways infrastructure and the carrier, two euros to ports, 3 euros to pay for the costs related to the operation of terminals, such as energy, IT and else, 1.5 euros for labor, and 1.5 euros to the operator to pay back investments and earn income.

As a result of the reduction in volumes Estonia is failing to get 10.5 euros per each missed ton, made up of foregone revenue of the railway and ports as well as the labor taxes of terminals. Compared with 2006, this is 357 mln euros less per year than in 2006.

The association says that while it's possible in collaboration with the government to increase freight volumes and earn additional revenue, it's the environment created by the state that sets Estonia behind its neighbors.

From 2006-2014, the number of ton-kilometers of rail shipments grew by 15.5% in Latvia and by 10.9% in Lithuania. In Estonia meanwhile the number of ton-kilometers fell 3.3 times by 2015. Last year, freight shipment volumes declined by 2.4% in Latvia, by 1.9% in Lithuania and by 20% in Estonia.


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