A decision by a Tallinn administrative court has put the privatization of national railway company Eesti Raudtee (ER) on hold and may substantially change the course of events. On Wednesday, the court ordered further proceedings in the sale of a majority stake in ER to be halted, accepting a legal challenge by losing bidder Raudtee Erastamise Rahva (RER).
RER manager Rain Tamm has said that, as the process was halted pending a court ruling, ER's privatization is likely to be at a standstill for months, because decisions may be appealed to higher courts.
Last Monday, RER filed an application with the administrative court contesting the results of the bidding and requesting the Privatization Agency council revise its decision. RER, a consortium of local businesspeople and an affiliate of Sweden's national rail company, SJ International, maintains they had sufficient grounds to take court action on the basis of the privatization program and bidding conditions, whereby ER was to be privatized to a strategic investor.
Kingsley Group, core investor in the winning bidder, Rail Estonia, does not meet the above conditions, and representatives of the bidder itself have admitted that consortium is still looking for a strategic investor, RER alleged.
On the same day, representatives of Rail Estonia had a meeting with the council of the Estonian Privatization Agency to explain the ownership structure of Rail Estonia and the financial plan of privatization. Rail Estonia made assurances that a strategic partner and investor is involved and reaffirmed that it is ready to sign the privatization deal within the preliminary time frame; that is, by the end of February 2001.
At the end of December 2000, the Estonian Privatization Agency declared Rail Estonia's EEK (Estonian kroons) 1.7 billion (about USD 103 million) offer for 66 percent of the shares in ER the best bid. Baltic Rail Services placed second, and RER came third in the tender.
Estonian Transport and Communications Minister Toivo Jürgenson survived a no confidence vote in Parliament on Tuesday by a 53 to 42 vote. The vote was initiated by the opposition Estonian People's Union. According to party chairman Villu Reiljan, the immediate cause of the vote of no confidence was that the minister, a member of the ruling Pro Patria Union, had applied the ministry's staff to the justification and formalization of business, party and personal decisions long taken by a tiny political elite.
The course of privatization of ER and the ministry's assistance in carrying out plans to do away with passenger service for ER and regional Edelaraudtee (Southeastern Railways) clearly and unambiguously confirms the charges, said Reiljan.
At the root of the trouble is the Parliament's incomplete decision concerning Edelaraudtee, which failed to put in place a long-term subsidy plan. The government has decided to end subsidizing passenger carriages conducted by Edelaraudtee in lines between Tallinn, Narva and Tartu, as well as in many rural parts of southeastern and northeastern Estonia. Edelaraudtee will likely continue servicing passengers only until March.
Planning ahead for the EU
On Thursday, the Estonian legislature discussed preparations for Estonia's accession to the European Union. "It's not politicians and officials that will join the European Union but Estonia and its people...if they find the European Union is good for them," said Prime Minister Mart Laar. He also admitted that a lot more work has to be done to better inform Estonian people about the European Union.
Foreign Minister Toomas Hendrik Ilves called on the Parliament to avoid letting the speed of adopting new laws become an obstacle in Estonia's accession process. Ilves also underlined that decisions required to gain membership in the EU must not be taken behind the backs of the people. "Communication with, and providing information to, the public are of the utmost importance," the foreign minister said.
Estonian Environment Minister Heiki Kranich expressed the hope that Estonia can become one of the first EU aspirants to close the chapter on the environment. The minister declared that Estonia will certainly avoid taking unrealistic obligations and will see to it that the interests of the Estonian people are protected.
Friends in high places
At Wednesday's confirmation hearing before the US Senate Foreign Relations Committee, Secretary of State nominee Colin Powell covered, among other foreign policy issues, the subject of NATO enlargement. Powell said the United States should not fear Russian objections to the enlargement of NATO to include the Baltic states.
"We have to do what is right for those nations," Powell said. Committee Chairman Jesse Helms (R-NC) last week set NATO acceptance of Estonia, Latvia and Lithuania as one of the Committee's top priorities.
The big business of crime
According to police statistics made public on Wednesday, the general number of crimes increased in Estonia last year, although cases of murder, some types of theft and street crime declined. A total of 57,999 crimes were registered in 2000, which is 6260 more than in 1999.
Concurrently, as crime figures have gone up, Estonian residents' trust in the police has increased, too. General Director of the Police Board Harry Tuul said that 51 percent of Estonian residents trust the police; while in 1993 the figure was as low as 17 percent. He added that the main reason for the increase in crime statistics is due to higher trust in the police, which makes people more likely to report small crimes to the police.
And in other news...
- Czech Prime Minister Miloš Zeman made a two-day official visit to Estonia. Members of his cabinet, a business delegation and journalists accompanied him. Zeman held meetings with Estonian President Lennart Meri, Prime Minister Mart Laar, Economics Minister Mihkel Pärnoja and Tallinn Mayor Jüri Mõis. Bilateral relations, enlargement of the European Union and cooperation with the EU in the process of accession, as well Estonia's preparations for NATO membership, were discussed during the meetings.
- On Monday, nearly 3000 students turned out for a peaceful demonstration for the preservation of train traffic and to demand cheap bus tickets in Tartu, Estonia's second largest city and the seat of two universities. Demonstrators adopted an address to the government and the city government of Tartu outlining their demands.
- The United States Embassy in Tallinn refuses to issue visas to more than one out of every three applicants. Consul Ellen Thornburn said, "As very many Estonians have arrived in America to get illegal work, I have to be extremely careful with respect to visa applicants." Thornburn said Estonians working in the United States illegally may lose any kind of work or even their wages. Persons illegally staying in the US are punished by deportation.
Kristin Marmei, 19 January 2001
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