Estonian RRgroup to announce dance partner

  • 2000-08-17
  • Aleksei Gynter
TALLINN - A company established to take part in the much-discussed privatization of railway Eesti Raudtee, Raudtee Erastamise Rahva Ltd. (People's Company for Railway Privatization), is going to disclose the name of a strategic foreign investor in the next round of privatization beginning Aug. 16, said Rain Tamm, RER's president.

Tamm would not comment on the foreign partners' name, but said that several American and European companies are interested.

"All of them have certain advantages," said Tamm.

Tamm said his company is concerned about making the final decision on its strategic investor because of the requirements set by the government, which, he said, make it clear that it would be difficult for anything other than an international company to win the privatization contest. No qualified Estonian companies would play a significant role in bidding, he said.

"The capital of a strong candidate should be at least 0.5 billion kroons ($294,118)," Guido Sam-mels--berg told the daily Eesti Paevaleht. Sammels-berg is from the Baltic Rail Service consortium, an international company which has placed a bid with the Privatization Agency.

The other two bids were placed by the American CSX Transportation and the Swedish state railroad company Statens Jarnvagar.

The privatization of Eesti Raudtee has caused tense political debates in Estonia. Opposition parties disapprove of it, and announced an extraordinary session of Parliament to discuss the situation last Monday. However, the session fell through when the required number of ruling coalition members did not show up.

RER was the only Estonian company which has placed a bid in the contest, which began last month.

The information provided by Baltic News Service and Eesti Paevaleht considered Deutsche Bahn, the German national railway company, as one of the probable foreign partners of RER. The stake of the Estonian side has been fixed at 51 percent, even if the size of the holdings of foreign partners change, BNS reported.

According to Tamm, RER's business plan for Eesti Raudtee does not concern any major changes in Eesti Raudtee's work after the privatization.

"If we win the contest, we'd like to increase the amount of container loads' transit through Estonia and make a number of investments. But we would basically continue the current projects of Eesti Raudtee," Tamm said.