TALLINN - Estonian opposition parties Pro Patria Union and Res Publica failed in their attempt to vote down financing for the purchase of majority shares in Eesti Raudtee (Estonian Railway) from next year's state budget.
The opposition-initiated motion collected 17 votes in favor and 51 against on Nov. 27.
During more than three hours of debate on the issue, Economic Affairs and Communications Minister Edgar Savisaar defended the repurchase of the railroad, refuting suspicions that the price of the shares were too high and that the government lacked a clear plan on how to operate the railway after its reacquisition.
Savisaar said that several financial institutions had assessed the price of Estonian Railway as being higher than the 2.35 billion kroons (150 million euros), which the government is to pay for it. Savisaar added that if the current business plan is implemented, the price of the shares could rise to a level significantly higher than they are at present.
The minister emphasized that next year's investment into the company would not be a burden for the state budget.
He expressed the opinion that transit prices would have to be raised, noting that they would depend on the amount of investment put into the railway. Savisaar added that the prices must be carefully determined, as Estonia is not the only rail services provider in the region.
According to the bill, the Estonian State, Baltic Rail Service and Estonian Railway will terminate the privatization contract and articles of association which were signed in 2001. As a result the state will acquire for 2.35 billion kroons the shares that currently belong to BRS and will once again become the sole owner of Estonian Railway.
The government is planning to finance the purchase from the state treasury reserve or from the surplus of the next year's state budget.
