Baltic Rail Service unity disintegrating

  • 2005-12-21
  • From wire reports
TALLINN - Ganiger Invest, one of the owners of Baltic Rail Service, the controlling shareholder in Eesti Raudtee (Estonian Railway), said it was ready to sell its holding, not just the Port of Tallinn as earlier reported.

Juri Kao, an owner of Ganiger Invest, a company that united Estonian businessmen, told the business daily Aripaev that Ganiger was ready to sell its holding in Baltic Rail Service regardless of whether the deal is made with the Port of Tallinn or not.

"Our five-year investment period is soon going to expire, and we hope to terminate the deal in the near future," he said, adding that Ganiger Invest had signed a contract with an investment bank for the sale of the holding in Baltic Rail Service.

Port of Tallinn Chairman Ain Kaljurand, in an interview with the daily Postimees, said it was likely that the state-owned port could buy a holding in Estonian Railway, 34 percent of which belongs to the state.

"This would make it possible to raise the Estonian transit corridor's competitiveness," Kaljurand said. "Besides, the state-owned railway would be able to use resources from structural funds of the European Union to develop its infrastructure."

The economy minister's adviser, Heido Vitsur, said the state would also have to take into consideration the big risk of the railway slipping into the control of businessmen of Russian background.

During the past year, Russian companies have acquired several holdings in different Estonian-based transit companies.

The state owns 34 percent of Estonian Railway. Baltic Rail Services, which unites Estonian and international investors, controls the remaining 66 percent. In recent months relations between the state and the shareholders have disintegrated, with each side claiming the other is leading the company to ruin. (See interview on Page 18.)

Baltic Rail Service is owned by Ganiger Invest (33.3 percent), Railworld Estonia (27.88 percent), Railroad Developments Corpora-tion (5.46 percent) and EEIF Rail B.V. (33.3 percent).