With the effects of global warming starting to rear their ugly head and the price of petroleum climbing higher and higher every year, the idea of passenger rail travel 's always a key mode of commuter and inter-city transportation 's is gaining fresh importance. The same is true in the Baltics where the three governments have begun investing heavily into rail infrastructure. In this week's Industry Insider, The Baltic Times takes a look at the general state of rail travel, important developments for the Tallinn-Riga route and some major infrastructure improvments being made in Lithuania.
RIGA - Over the course of the past decade, Baltic economies have been chugging along toward a junction with other EU member states. In the most recent years, however, their progress has been more analogous to a bullet train.
Passenger rail service in the Baltics was struggling when the countries joined the EU. Numbers of passengers were steadily declining in all three countries and profits were dropping right alongside them. Companies were forced to downsize, sometimes on a huge scale, in order to maintain competitiveness.
But things are looking up for the passenger train industry. A recent combination of EU funds and government investment are starting to leave their mark on the industry, and over the past couple of years numbers have been back on the rise. Baltic railways are becoming competitive again.
"The last few years have been very good, the number of passengers has been growing and last year we reached 3.2 million [passengers], which accounts for a 2.5 percent increase," Kuldar Vaarsi, a board member at Elektriraudtee, told The Baltic Times. Elektriraudtee offers passenger train services in and around Tallinn.
This rise has naturally been accompanied by an increase in profits. "Ticket revenue is growing as well. Last year it was 30 million, and that was 10 percent more than the year before," Vaarsi said.
Today's positive outlook stands in stark contrast to the situation just a few years ago, when the number of rail passengers was spiraling downward. Between 2000 and 2005, Estonian railways saw the number of passengers plummet from 7,267,000 to 5,138,000 's a drop of about 30 percent. After 2006, the numbers started to slowly bounce back, thanks in no small part to the increased role of private rail companies.
In Latvia, the steady decline of passenger rail travel was even more drastic and lasted right up until EU membership. In the 13 years between regaining independence and joining the European Union, the country experienced a staggering fall in passenger rail transport 's dropping from 5,366 million passenger kilometers to a mere 810 million. By 2002, when Latvia was preparing to join the EU, the total number of passenger coaches owned by the state-run rail company had dropped to just 24.
Since then, as with its neighbor to the north, passenger rail transport in Latvia is back on the rise.
"Things have been improving in the passenger rail industry, and the number of passengers and total profits have gone up last year," a representative of the state-owned Latvijas Dzelzcels (Latvian Railways) said.
In Lithuania, however, things are just now starting to turn around. The total number of rail passengers is still declining, but companies have high hopes that things are set to turn around in the near future.
"Statistically, we are carrying less passengersâ€¦ a few years ago the most attention was paid to the cargo sector, to make it popular. At the moment, however, our board is paying much more attention to passenger travel," Dalijus Zebrauskas, deputy director for commerce at the Passenger Directorate of state-run Lithuanian Railways Lietuvos Gelezinkeliai, told The Baltic Times.
With the industry back on the upswing, there are a number of new lines and improvements being planned (see stories next page). By far the most ambitious of these is RailBaltica 's the massive project aimed at linking Helsinki to Warsaw through the Baltic states. Though the project has recently been bogged down by structural and funding issues, the long-term plans have not been changed.
"This is a long-term, continuous program. The task is first to use what we have and be efficient with improving the property. As the development of our economy will grow, new demands will present such a need for mobility," said Albertas Aruna of the Lithuanian Ministry of Transport's Investment Directorate.
The passenger rail industry faces stiff competition from other modes of transportation. The most intense competition for trains comes from two sources 's buses and private cars.
Buses are the natural nemeses of trains. They cater to nearly the exact same market, and the battle comes down to who can provide the service between any two points faster, cheaper and with more comfort.
Rail transport is handicapped, however, by the government's preference to invest in road infrastructure, which can also be utilized by cars and trucks.
"The state pays more attention to road transport, and generally that infrastructure is quite good at the moment, and buses have upgraded," Zebrouskas said. He went on to explain, however, that the government has recently been turning its sights to rail infrastructure to balance the market.
"The situation has changed a little bit 's now the government pays more attention to rail. [This is] for many reasons, one of which is traffic jams. Also, EU funding has become available for rail systems, which is very helpful," he said.
Though buses are seen as the major alternative to trains, the recent boom in private car ownership is starting to make passenger rail companies sweat. The number of cars registered in Latvia in 2007 rose by more than 10 percent, and is still growing.
With increased investment, the quality of train travel now has the potential to surpass that of both buses and private cars.
"We have made many investments into comfortable travel, and we have added lines which give a faster ride from urban areas to suburban ones. This means that the trains are the fastest [form of] transport during rush hour. Another thing is that we have added many different features to the trains like an electronic system, and you can now use wireless [Internet] in the trains," Vaarsi said.
Estonia 's 1,930
Latvia 's 2,331
Lithuania 's 1,966
Source: Jane's Sentinel