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. Last Updated: 07/27/2016

Estonia's National Railroad Moves Toward Privatization

Plans to privatize Estonia's national railroad have taken their first steps with the announcement in May of a tender to create a private company for international passenger service.

The firm, 49 percent of which will be held by Estonia and the rest by a successful bidder, would have rights to the country's three international rail routes, said Tommy Biene, public relations councillor for Estonia's Transport and Communications Ministry.

There are currently three international lines, two to Moscow and the BaltiEkspress, which runs from Tallinn through Latvia and Lithuania to Warsaw, said Liia Rikson, press secretary for the Estonia national railroad AS Eesti Raudtee.

In addition to the rail lines, the state's contribution to the venture amounts to 19.5 million Estonian kroons ($1.37 million) worth of equipment, including locomotives, passenger cars and depots.

The tender, which closes Aug. 1, marks a step toward implementing a June 1997 government decision to privatize the nation's railroad to boost profitability.

Rikson declined to say how much investment was necessary, adding that it was unclear even what form the company would finally take or how the service would be organized.

"I think that it will take some months or half a year, and it depends on how negotiations will go," he said. "It is very difficult to say what will happen next."

Biene said the government hopes the tender will attract both domestic investors and foreign firms. British, German, Swedish and Russian investors have expressed interest, he said.

Eesti Raudtee has approximately 700 kilometers of rail line, 132 of which are electrified, according to Rikson.