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. Last Updated: 07/27/2016

Railway to Close St. Pete-Tallinn Link

Itar-TassThe first train leaving St. Petersburg's Vitebsky Station for Tallinn when the service was reopened on March 31.
Russian Railways, citing economic reasons, is canceling its St. Petersburg-Tallinn rail link just weeks after restarting the service.

Coming on the eve of Victory Day celebrations, however, the move is being seen as the latest twist in the dispute between Russia and Estonia over the relocation of a Soviet war memorial in Tallinn. The spat appears to be spreading to affect trade and transportation links.

"From May 26 for commercial reasons, including the extremely low passenger numbers and subsequent loses incurred, we are planning to cancel the running of the train," RZD said Tuesday in a statement.

The operation, co-run with Estonian partners, lost almost 390,000 rubles ($15,000) in April, RZD said.

Daily rail services between St. Petersburg and Tallinn only resumed March 31, coming after a two-year break in operations. The service was halted two years ago due to a lack of demand, Gazeta.ru reported Tuesday.

There are no plans to end rail services between Moscow and Tallinn. That route carried more than 10,000 passengers in April.

Estonian investors were skeptical Wednesday about RZD's commercial arguments for ending the St. Petersburg service. "It is hard to say. They tell us the economic reason but it is difficult to believe that," said Alar Pinsel, CEO at GoRail, the Estonian company that runs the service with RZD.

Pinsel said most of the funding for the project had come from the Estonian side and that it would take time to turn a profit. "The high season will only start in summer, so of course it would start doing better," he said.

Despite the setback, GoRail is still hopeful that it can convince RZD to change its mind. "Right now we are hoping that this train will stay," Pinsel said.

Since the memorial dispute flared up, politicians including First Deputy Prime Minister Sergei Ivanov have demanded a boycott of Estonian products.

Ene Palmiste, a manager at Tallinn-based travel agent Travel Experts, reacted with dismay to the moves.

"First of all, I think that the idea from the Russian side is a very regrettable one and I truly hope that this is not going to happen," she said.

She brushed off suggestions that the route would not prove economically viable. "There is no business in the world that is profitable from the moment of its opening," she said.

Palmiste also said travel between Tallinn and St. Petersburg was restricted due to an air traffic agreement on flights between the cities not being ratified.

Asked who used the train link, Palmiste said it was still too early to tell but that French tourists and European package tour operators had shown particular interest.

"I don't think that this disagreement will have a long-term effect on the tourism between Estonia and Russia. Russian tourists are able to see past the propaganda," she said.

Last week, oil traders reported that Russian Railways, or RZD, had halted the export of oil products to Estonia.

On Wednesday, Russian authorities closed a bridge on the main highway to Estonia to trucks weighing more than 3 1/2 tons, citing safety reasons.