Schengen changes may cause travel chaos

The Baltic Times, TALLINN
By Kairi Kurm
Mar 29, 2001

From March 25 people traveling outside Estonia must take into account a new time difference from Finland and the widening of the Schengen territory, which may cause confusion and be time consuming.

Estonia – unlike Finland and Latvia – did not turn its clocks forward on March 25. Planes and ferries to Finland will be leaving one hour earlier.

The inclusion of Scandinavian countries in the Schengen area also causes a number of changes. Finland, Denmark, Iceland, Norway and Sweden all abolished visa and border procedures pursuant to the Schengen Agreement on March 25, 2001.

The Schengen area now comprises all the European Union member states except for the United Kingdom and Ireland.

However, according to the Estonian Ministry of Foreign Affairs, the widening of the Schengen area to the north will not bring along any great changes to Estonian citizens, because Estonia has already concluded an agreement that ensures free movement of people within all Schengen countries.

“These are some small technical changes, but in general nothing has changed,” said Taavi Toom, spokesman for the Ministry of Foreign Affairs.

The agreement ensures that passengers can travel between the Schengen states without having to show their passports every time they enter an EU country. They have to show it at the first border they enter.

Estonian citizens can stay without a visa in all 15 Schengen countries for a maximum of 90 days for no more than six months following their entry into the area. To stay for a longer period they should acquire a visa or a residence permit.

According to Ants Puusepp, spokesman for the Finnish Embassy in Estonia, the 90-day limit applies to the entire Schengen area and may cause problems to businessmen and sportsmen who travel a lot in this region.

People living in Estonia with a foreign passport still need a visa. The same applies to people from third countries, from Russia or Ukraine for example.

Puusepp said that people with a “gray passport” – those with a third-country passport – should apply for one visa when entering the Schengen area from the embassy of their country of destination.

The conditions for issuing visas are basically the same for all these countries. Puusepp said that a passenger with a visa also has to have travel insurance, which was not obligatory before.

The travel agency Estravel warned its clients last week about the need to spare time for transfers at Schengen airports, because passengers may have to use different zones.

Juri Toomel, marketing manager at Estravel, said that problems might occur in Stockholm, where passengers may need a bus to take them from one terminal to another.

“In Helsinki one does not need a bus,” said Toomel. He said that as the agreement has been valid only for a short time no one knows exactly what to expect.


Be careful when filling your car with gasoline 95

The Baltic Times, TALLINN
By Kairi Kurm
Mar 22, 2001

The Estonian automobile sale and service enterprises union Autode Muugi-ja Teenindusettevo-tete Eesti Liit, or AMTEL, announced on March 9 that most of the gasoline with an octane rating of 95 sold in Estonia does not correspond to the required parameters and may be dangerous for new cars. The quality of gasoline with a 98 octane rating and diesel tested met the required standards.

AMTEL took gasoline and diesel samples from Estonian service stations in November last year and sent them to Belgium for analysis. Twelve of the 15 service stations sold gasoline 95 with lower octane parameters than indicated on their certificates and in most cases it contained too much unwashed gum.

The high rate of unwashed gum may damage engines, according to Jaak Uudla, chairman of the board at AMTEL. “A lower octane rate will damage a car in the long run, but it doesn’t pose an immediate serious threat to the engine. The car takes more fuel and is less powerful,” said Uudla. However, a higher level of unwashed gum in the fuel is a problem for the engine.

He said that service stations are allowed to sell gasoline with a higher octane rate than indicated in their certificates, but lower parameters may be a threat to cars.

The stations inspected included Neste, Statoil, Uno X, Shell, Lukoil, Alexela Oil, Truveks, Grekond, Petkam and Milistoil. The only gasoline that met the requirements was sold at Lukoil.

Statoil’s new Ultima gasoline 95, which came on the market in December, meets the European norms although filling stations don’t have a euro sign next to it.

Uudla suggested using big chain stations because big and well-known service stations didn’t have problems with unwashed gum and their diesel parameters were better.

Epp Kiviaed, head of Statoil Eesti, said that the octane parameters of most of the gasoline tested were in the internationally allowable gap. She said that the internationally accepted error margin was 0.9 units. “Statoil was within the gap,” said Kiviaed. She said that their Ultima gasoline 95 corresponded to the European norms and was of a very good quality. “We considered the quality more important than the euro sign, but if they think it is important, we will add the sign next to the trademark,” said Kiviaed.

Andres Kivistik, head of Hydro Texaco Eesti, whose trademark is Uno X, said that they unknowingly sold gasoline 95 with a lower octane rate, because the local laboratories had given them the certificate. “We are looking for possibilities to test our fuel abroad,” said Kivistik. The oiling characteristics of Uno X diesel is good because the station adds supplementary substances to diesel that improves oiling, said Kivistik.

The quality of the diesel tested was almost tolerable in all the stations. The only problem half of the samples had was their oiling characteristics, which are very important for the car’s feeders.

Uudla said that the union is worried about the poor quality of fuel being sold in Estonia because there are 40,000 new cars in the country. According to the union’s estimates, more than 130 million kroons ($7.4 million) are annually spent on repairing damages caused by poor-quality fuel.

“Car companies may refuse to compensate for losses claiming that there is bad fuel in Estonia,” said Uudla. “The car owner may unknowingly cause expenses when the warranty period is over.

“Older cars do not require quality fuel. We do not have anything against the poor quality of fuel, but we ask for the availability of quality fuel on the market.”

An association of car salesmen and scientists, Kutuse Umarlaud, believes that the variety of gasoline and diesel available is the cause of the problems on the fuel market. There are 16 kinds of gasoline and four types of diesel available on the Estonian market. Kutuse Umarlaud believes that Estonia should determine four types of gasoline and one diesel in order to control the market.

The Estonian Oil Association agrees that the quality of fuel sold in Estonia is questionable but is disappointed in the way AMTEL represents its data in the media without first consulting the association.

The oil association believes that the market is not ready for the transition to European norms as long as only 6 percent of the cars are less than 3 years old and require European fuel.

Kaljo Aamer, councilor at the oil association, said that AMTEL had not shown him the analyses and he would see the report only on March 20 when the union presents it to Mihkel Parnoja, the minister of economics.

“We have problems with poor quality fuel, but I do not believe that all the fuel can be called waste water,” said Aamer.

Uudla said that AMTEL would give the ministry its proposals on how the state should adjust its control over the market and provide quality fuel in every station.

Bidders fight over control of railway

The Baltic Times, TALLINN
By Kairi Kurm
Mar 08, 2001

The privatization process of the Estonian railway company Eesti Raudtee was put back on track last week after the Estonian Privatization Agency decided to invite the second-place bidder, Baltic Rail Service, to negotiate the sell-off of a 66 percent stake in the country’s railway.

The talks with the winner of the tender, Rail Estonia, were canceled as the bidder failed to provide a strategic investor and financial guarantees for privatizing Eesti Raudtee in the scheduled time, the Estonian privatization officials said.

The privatization agency is ready to sign a privatization contract at once, but BRS would definitely need time to take a look at the Eesti Raudtee documents that were confidential before, said Katrin Kivi, senior specialist at the privatization agency.

BRS was ready to pay 1 billion kroons ($58.82 million) for the majority holding in Eesti Raudtee, while the Rail Estonia consortium, which was declared the winner of a tender in December of last year, offered to pay more than 1.71 billion kroons.

BRS is jointly owned by Britain’s Jarvis International, the American. companies Rail World and Rail Development Corporation, and Ganiger, a firm which is managed by prominent Estonian businessmen Juri Kao and Guido Sammelselg. Rail Estonia is 90 percent owned by the international consultancy Kingsley Group, with two U.S. railway firms, CSX Corporation and Rail America, represented by 5 percent each.

The privatization of Eesti Raudtee was preliminary hindered by a lawsuit filed by Raudtee Erastamis Rahva AS, the third ranked bidder in the failed talks. RER stopped the privatization process because it didn’t agree with the tender results. However, in February RER recalled its ban concerning the second bidder, so the privatization agency was free to start talks with BRS.

“The privatization agency has finished negotiations with Rail Estonia and is beginning talks with BRS because the restrictions on dealing with BRS have been withdrawn from the appeal,” said Kivi. “We hope to conclude a contract with BRS in the near future.”

The privatization agency was undoubtedly happy to point out the formal reason for breaking off talks with Rail Estonia in the wake of a major scandal, with influential local lobbyists, international swindlers and dubious Russian capital emerging behind the winning bidder.

At first, the Estonian government was embarrassed when local media reported that Rail Estonia’s project leader, Tony Massei, was on the run from U.S. authorities after being convicted on money laundering and swindling charges in California in 1995 under the name of Antonio Angotti.

Facing a rejection of its winning bid, Rail Estonia made a last-minute attempt to bring in a Sicilian financial investor mediating Russian capital instead of the required strategic investor.

Estonia’s ETV public television broadcast an interview with Giovanni Sposato, an Italian who in his own words heads a fund that was ready to invest 12 billion kroons annually in Estonia.

The 29-year-old Italian who resides in Moscow and Colombia, made no secret of the fact that the money was of Russian origin. Starting Feb. 5 Sposato became a member of the Rail Estonia board.

“I’m offering 150 million dollars for 66 percent of the shares in Eesti Raudtee and I’m leaving a blank check to purchase the remaining 34 percent over the next year,” Sposato said. Police in Belgium reportedly would like to see Sposato over a fraud case.

On Feb. 27, Tallinn Mayor Juri Mois unexpectedly flew to London for one day, making an eleven-hour attempt to save the business plan of Rail Estonia. The unscheduled trip was reportedly undertaken at the request of Mois’ old friend, Hannes Tamjarv. Mois’ party members from the ruling Pro Patria Union demanded an explanation.

The previous looser, RER, also wants to participate in the new bidding. RER believes that the British privatization adviser GIBB chose Rail Estonia as the best bidder because its bidding was the largest and the company would have earned the biggest fee from its sale.

The state is now trying to get back at least a part of its 40 million kroons paid to the adviser and the opposition is planning to submit a no-confidence motion in Toivo Jurgenson, the minister of road and communications, who is to be held responsible for the failure of the railway privatization.

“The privatization agency has to make a new decision,” said RER Chairman Rain Tamm. “It has to choose between two bids. We are striving for the possibility to take part in the privatization process. We are asking the agency to look through its decision before the court ruling.”

He said that although BRS offers a better price, RER is promising more investments into the project. Tamm said that BRS offered 1 billion kroons for Eesti Raudtee, while RER offered 865 million kroons. He said that RER is additionally planning to invest 7 billion kroons in 10 years, 2.2 billion kroons of which are guaranteed in the first 5 years.

BRS is planning to invest 4.7 billion kroons in 10 years and pay 4.2 billion kroon dividends to the state. For the remaining part of Eesti Raudtee BRS is willing to pay 515 million kroons.

“The experiences of our strategic investor, Swedish Green Cargo, in operating goods transport is undoubtedly bigger than that of Rail World, the partner of BRS,” said Tamm. “We are planning to invest more in the Tartu direction while BRS is focusing on the Narva route.”

Tamm said that the railway privatization had been organized very badly. “The advisers have not done their work properly. The whole process has been moving on too fast and the deadlines are too short,” Tamm complained. “I hope the agency will make a new decision before the formal hearing regarding our lawsuit opens on March 14.”

Estonia is several years ahead of neighboring Latvia and Lithuania in its railway privatization. Under Estonia’s restructuring of its railway sector, Eesti Raudtee owns the track infrastructure, while cargo and passenger traffic operations have been given to other companies.


Trains become endangered species

The Baltic Times, TALLINN
By Kairi Kurm
Mar 01, 2001

Hundreds of people protested in front of government buildings in the town of Toompea on Feb. 21 against the Estonian government’s plans to cut passenger transportation, which would also lead to the dismissal of 228 employees.

The Ministry of Road and Communications decided that passenger services would continue on the Tallinn-Parnu, Tallinn-Viljandi and Tallinn-Tartu-Valga routes, while four smaller lines in the southeastern region of Estonia and the Tallinn-Narva route would be closed.

According to Kuldar Vaarsi, a ministry spokesman, trains would run on the Tallinn-Tartu line only once a day and on the Tartu-Valga line on Fridays and Sundays. Until the end of February, trains will be running as planned – three times a day on the Tallinn-Tartu line and once to Valga.

At first there were plans to close the Tallinn-Tartu-Valga route completely, but then it was agreed to continue operating with funds provided by the ministry – 8.1 million kroons ($466,000) – until the end of the year.

At the start of January, the state paid Edelaraudtee, the company running the services, 25 million kroons to keep all railways running until the beginning of March.

The rest of the 60 million kroon budget initially meant to subsidize this year’s passenger transportation, but not enough for Edelaraudtee, would be spent on the reconstruction of roads and supporting the establishment of new bus routes.

Tartu county has already announced that 30 new bus trips and two new routes are being added to the schedule.

Vaarsi said that bus tickets are a little more expensive than train tickets, but that subsidies for the bus companies are a lot smaller. A train ticket on the Tartu-Elva route costs 8 kroons, while a bus ticket costs 4 kroons more. Transport by rail costs 3 kroons per kilometer while by bus it is only half a kroon.

Vaarsi also said that in southern Estonia revenues from ticket sales cover only 2 percent of the cost of rail transportation, while on average in the rest of the country the figure is about 20 percent.

“So if this business were based on market economy principles, train tickets would be 50 times higher than they are today,” said Vaarsi. He also said that bus depots would be much closer to passengers than train stations are nowadays.

He believes that buses are not more polluting than the trains, which date from the 1970s. Right now, almost 2,000 people use the Tallinn-Narva, Tallinn-Tartu and other southeastern train routes.

The government’s decision to end passenger services on the railways would, according to Vaarsi, mean a loss of 228 jobs and cost 10 million kroons in compensation, which would have to be paid by Edelaraudtee. He said that the ministries are working on a program to train laid-off personnel for new jobs.

“There is a large demand for engineers in Tartu, for example,” said Vaarsi. Engine drivers who fear for their jobs held a work stoppage action on Jan. 30 at Tallinn’s central railway station.