THE Estonian government has approved a proposal by the minister of transport, Mr Vladimir Svet, to privatise Operail and finalise the sale of the freight operator.
The first stage of the privatisation process commenced in June, when prospective buyers had the opportunity to submit non-binding offers. “The was a lot of interest and the profile of the interested parties was wide, including from Estonia and abroad,” Svet says.
The government’s decision on August 8 enables the second stage of the process to go ahead, entering into detailed negotiations over the sale. Selected investors have been granted access to additional information, after which they may submit a binding purchase offer.
Any purchase will include Operail’s freight and maintenance businesses along with assets, licences, contracts, and the Operail brand, as well as a workforce of around 200 people.
Traffic at Operail fell by 70% in 2023 as it ceased moving freight to and from Russia and Belarus. This compares with a 39% overall decrease on the Estonian network and the situation has caused financial difficulties for the company.
Operail retains the largest overall share of rail freight traffic in Estonia. It is hoped that the buyer will work to develop international business, as the company is already active in the Finnish market through its Operail Finland subsidiary.
“Freight transport is not a strategically important activity for the state,” Svet says. “A private investor can expand their business operations, allowing the company to continue its activities, while the state can direct its resources to strategically necessary activities.”
