Spacecom acquiesces, but continues to protest

  • 2005-10-12
  • From wire reports
TALLINN - The ongoing row between Estonia's two main rail cargo companies erupted again last week, with both sides accusing each other of violating previous agreements. Eesti Raudtee (Estonian Railway), the largest of the two, stated on Oct. 5 that Spacecom had failed to make its payments, while the latter fired back by claiming Estonian Railway's demands were in violation of the two sides' agreement.

As a result of the standoff, three of Spacecom's trains were halted on the Russian-Estonian border on Oct. 5, and the company has sustained a loss of half a million kroons (32,000 euros), Spacecom officials said.

The trains came to a halt after Spacecom refused to pay a service charge that covers the moment when its trains enter Estonian territory. The company claims that the service charge is related to infrastructure, which Estonian Railway owns, while Estonian Railway says the charge is of a commercial nature.

Eventually Spacecom said it would pay the 1.5 million kroons in fees for the contested service as demanded by Estonian Railway so that shipment of goods could continue.

Rene Varek, marketing director of Estonian Railway, said the company had received a letter from Spacecom saying that the latter was ending payment for commercial services. Spacecom cited a letter from the Ministry of Economy allowing it to do so.

"This is an unheard-of situation, where one refuses to pay on the basis of a letter from a ministry. In civilized, law-based states, decisions based on the lawfulness of fees and validity of agreements are made on the basis of court rulings, not the ministry's correspondence," Varek said.

Estonian Railway started to charge separate fees for commercial services in June. From June to September, Spacecom had to pay 3.8 million kroons for the services. But citing the Economy Ministry opinion, Spacecom stopped paying the fee and is demanding the return of earlier payments.

Estonian Railway responded by saying it would stop providing commercial services to Spacecom. The agreement on commercial services between the companies was suspended until Oct. 7, the final deadline for Spacecom to pay its 1.5 million kroon debt for commercial services.

"This doesn't mean that Spacecom will not be able to use Estonian Railway infrastructure, but in the future Spacecom must itself arrange services for more effective handling of its trains and goods," Varek said.

He said it was the operators' wish to squeeze together all the services related to the handling of freight under the infrastructure service heading, which could only be seen as a wish to get everything without paying anything.

Spacecom belongs to Russia's Severstaltrans, while Estonian Railway is controlled by a group of foreign investors (66 percent) and the Estonian state (34 percent).