Railway concept note

delta_recipientPersonName_1 \* MERGEFORMAT Jan Steinkohl Your Ref: delta_senderRegDate \* MERGEFORMAT 03.05.2022 No Our Ref: delta_regDateTime \* MERGEFORMAT 02.06.2022 No delta_regNumber \* MERGEFORMAT 24.1-6/2022/3268-2 delta_docName \* MERGEFORMAT Railway concept note Dear Mr Steinkohl , Thank you for the proposal of Baltic Railway Integration Plan. We are glad that European Commission also understands the change in the Baltic States railway market in last decades. We can agree with you that t he railway systems of the Baltic states were largely dependent on traffic from Russia and Belarus. However, the situation in Estonia is little bit different from other Baltic States. The decline in transit cargo volumes from Russia and Belarus on Estonian railway infrastructure began already in 2007. The break-even point to our railway sector was in 2015 when we paid first time subsidies to infrastructure manager to balance their accounts. Also, our infrastructure manager Estonian Railways Ltd is working effectively and the stuff has been reduced to minimum over the years. Further increase in stuff will endangers the safety of railway system. At the same time railway passenger volumes in Estonia are increasing which means that also railway infrastructure manager’s revenues from passenger railway undertaking are also increasing. Approximately one third of the revenues of Estonian Railways Ltd in 2021 came from cargo transport railway undertakings , one third from passenger transport railway undertakings and one third from state subsidies. The Government of Estonia has approved the action plan for the development of public railway infrastructure for 2021-2028. The main investments in the action plan are still valid for upcoming years. The goal is to increase speeds for passenger traffic up to 160 km/h and to electrify most of the main lines. We have also ordered new electric trains for passenger traffic to meet the goal of increasing rail passengers from 8 million to 20 million (together with passengers on Rail Baltica line) in 2035. In the light of the goals in railway passenger transport we foresee that rail system in Estonia will develop further but in the situation of decreasing cargo volumes the development of rail system will not be as fast as we would like. To tackle that problem, we prefer the option where in addition to finding new freight volumes in Asia we can also find new freight volumes in n orth-south traffic and intra-Baltic traffic to further develop North Sea – Baltic Corridor. We do not foresee that the traffic volumes from Russia and Belarus come back in the future. In fact, we have predicted that Russian origin cargo would go away from Estonian rail network, it was just the question of the time and war in Ukraine fastened that process. Financing of the railway system in Estonia has already changed. For cargo transport within EU there are only charges for the minimum access package. There are no mark-ups laid for this traffic, except for oil products. Regarding the integrated railway system in the Baltic States, we agree with you that the railway systems are technically interoperable and therefore integrating them is primarily a political and organisational challenge. We can support the idea to go on with the Baltic Railway Integration Plan. A political declaration or an agreement of the transport ministers could be one option to go ahead with the plan. We can also agree participating in working groups which map the challenges in organisational and technical requirements and regarding economic models. Regardless the steps we take in the Baltic Railway Integration Plan our goal is to fasten the development of north-south traffic and therefore it is critical to move on with t he Amber Train project. With best regards, (signed digitally) delta_signerName \* MERGEFORMAT Ahti Kuningas Deputy Secretary General for Transport delta_ownerName \* MERGEFORMAT Indrek Laineveer +372 delta_ownerPhone \* MERGEFORMAT 639 7636 delta_ownerEmail \* MERGEFORMAT [email protected] Jan Steinkohl Your Ref: 03.05.2022 No Our Ref: 02.06.2022 No 24.1-6/2022/3268- 2 Railway concept note Dear Mr Steinkohl, Thank you for the proposal of Baltic Railway Integration Plan. We are glad that European Commission also understands the change in the Baltic States railway market in last decades. We can agree with you that the railway systems of the Baltic states were largely dependent on traffic from Russia and Belarus. However, the situation in Estonia is little bit different from other Baltic States. The decline in transit cargo volumes from Russia and Belarus on Estonian railway infrastructure began already in 2007. The break-even point to our railway sector was in 2015 when we paid first time subsidies to infrastructure manager to balance their accounts. Also, our infrastructure manager Estonian Railways Ltd is working effectively and the stuff has been reduced to minimum over the years. Further increase in stuff will endangers the safety of railway system. At the same time railway passenger volumes in Estonia are increasing which means that also railway infrastructure manager’s revenues from passenger railway undertaking are also increasing. Approximately one third of the revenues of Estonian Railways Ltd in 2021 came from cargo transport railway undertakings, one third from passenger transport railway undertakings and one third from state subsidies. The Government of Estonia has approved the action plan for the development of public railway infrastructure for 2021-2028. The main investments in the action plan are still valid for upcoming years. The goal is to increase speeds for passenger traffic up to 160 km/h and to electrify most of the main lines. We have also ordered new electric trains for passenger traffic to meet the goal of increasing rail passengers from 8 million to 20 million (together with passengers on Rail Baltica line) in 2035. In the light of the goals in railway passenger transport we foresee that rail system in Estonia will develop further but in the situation of decreasing cargo volumes the development of rail system will not be as fast as we would like. To tackle that problem, we prefer the option where in addition to finding new freight volumes in Asia we can also find new freight volumes in north-south traffic and intra-Baltic traffic to further develop North Sea – Baltic Corridor. Suur-Ameerika 1 / 10122 Tallinn / ESTONIA Phone: +372 625 6342 / Fax: +372 631 3660 / E-mail: [email protected] / http://www.mkm.ee We do not foresee that the traffic volumes from Russia and Belarus come back in the future. In fact, we have predicted that Russian origin cargo would go away from Estonian rail network, it was just the question of the time and war in Ukraine fastened that process. Financing of the railway system in Estonia has already changed. For cargo transport within EU there are only charges for the minimum access package. There are no mark-ups laid for this traffic, except for oil products. Regarding the integrated railway system in the Baltic States, we agree with you that the railway systems are technically interoperable and therefore integrating them is primarily a political and organisational challenge. We can support the idea to go on with the Baltic Railway Integration Plan. A political declaration or an agreement of the transport ministers could be one option to go ahead with the plan. We can also agree participating in working groups which map the challenges in organisational and technical requirements and regarding economic models. Regardless the steps we take in the Baltic Railway Integration Plan our goal is to fasten the development of north-south traffic and therefore it is critical to move on with the Amber Train project. With best regards, (signed digitally) Ahti Kuningas Deputy Secretary General for Transport Indrek Laineveer +372 639 7636 [email protected] 2 (2)