Laar: railway susceptible to Russian capital

  • 2006-10-04
  • Staff and wire reports
TALLINN - During an online interview with the Estonian daily Postimees, former Prime Minister Mart Laar called the re-nationalization of Estonian Railway a populist plan that favored Russian transit capital.

"At present, the re-nationalization is a decision that has not been made with economic consideration, rather it is a populist plan that allows for discounts to Russian transit capital," the former PM said on Oct. 2.
Laar added that the state should first learn the price that private owners are ready to accept in order to give up their 66-percent holding in the rail company.

"We should also take into consideration the fact that, after buying back the railway, we will have to start putting money into it, in European countries these sums tend to be very high," Laar said.
Noting the 2 billion kroons (128 million euros) invested into the railway during its time in the private sector, and that the government is expecting to pay approximately what it sold for, Laar said the repurchase should not bring the state any immediate economic damages. However, he stopped short of supporting a second privatization to raise capital for future investments, which had been mentioned in past weeks.

The Estonian Economic Affairs Ministry and Baltic Rail Services, the largest single private shareholder in the Estonian Railway, are holding talks for the termination of the railway's privatization contract.
A successful end would mean that all shares in Estonian Railway will once again be owned by the state. Parties are hoping to conclude talks in October. The price of the BRS holding is rumored to be between 2.1 and 2.6 billion kroons. The first privatization price of the railway paid by BRS was 1 billion kroons.