Logic of determining railway infrastructure charges in Estonia to change at end-2017

"In recent years east-west freight shipments have decreased substantially. This is first and foremost a result of the economic situation of Russia and rearrangement of transit within Russia. Decreased freight flows mean smaller inflows of fees for the use of the railway infrastructure. However, since the state is obliged to ensure the quality and safety of railway infrastructure, EU rules require that the expenses must be covered," Minister of Economic Affairs and Infrastructure Kristen Michal said in a press release.

He said the new methodology enables flexible pricing and a subsequent improvement in the competitiveness of freight shipment. The maximum and minimum rates of railway infrastructure charges will be eliminated, which makes determining the fees more flexible. Besides it will enable separate pricing of individual segments when it comes to different segments of goods. For instance, different fees would apply to passenger trains, oil trains and trains carrying wood, Michal said.

A spokesman for the Ministry of Economic Affairs and Communications said the reduction in transit volumes will have no direct impact on the subsidy paid to the passenger train operator Elron and Elron ticket prices.

"The new methodology of railway user fees calls for introducing fees of different size for different categories of cargo, taking into account the market situation. The size of the railway user fees will be determined by the Technical Surveillance Authority. If the proportion of passenger carriage fees increases as a result of changes in the methodology, we will take this into account in determining the size of the subsidy for Elron," the spokesman, Mihkel Loide, told BNS.

The relevant EU directive says that charges for the use of railway infrastructure must be determined everywhere in the EU in a manner as uniform as possible, considering the specifications of companies. The goal of the new methodology is to increase the competitiveness of the railway sector.

According to the draft, the size of the charge for the use of railway infrastructure will be determined by the Technical Surveillance Authority, which, as before, will be entitled to take into account only these costs, which can be proven to be costs directly incurred by the train service. In determining the size of the charges the Technical Surveillance Authority will look at the expenses and freight forecasts presented by the companies and take into consideration the tolerance limits of different segments, as freight flows will move to neighboring countries if the charges are too high. The amount short of the amount that is necessary to cover the infrastructure expenses must be covered by the state.

Charges for the use of railway infrastructure determined using the new methodology are to be applied from the traffic schedule period that starts on the second Sunday of December 2017.