Private bus operators question Estonia’s plan to buy buses

Bus companies do not understand why the state is buying new gas and electric buses when operators already have vehicles and no direct need to receive them from the government, ERR reported. The Ministry of Regional Affairs and Agriculture says the purchase could help reduce the cost of public transport routes.

The ministry recently announced a tender to buy up to 10 electric buses and 30 gas-powered buses. The framework agreement initially covers five electric buses and nine gas buses.

The buses will be bought with money from the sale of CO2 allowances and provided to bus companies for use on public county routes.

Mart Raamat, a board member of bus operator Sebe and the Estonian Association of Automotive Enterprises, called the ministry’s tender absurd.

“The era of a state bus fleet should already be over and left in the Soviet period,” Raamat said. He added that the current system, in which operators bid to provide public transport services and find their own buses, had worked efficiently.

Raamat said the bus market was functioning well under public transport contracts and that bus companies were strong and well-capitalised. If the state began distributing buses, he said, companies that lacked the ability or willingness to maintain them properly could re-emerge, potentially putting passengers at risk.

He cited a recent example in which the state used money from the sale of CO2 allowances to buy buses and provide them to operators. In 2011, the then Road Administration bought 110 buses from Iveco, allocating 100 for county routes and 10 to the city of Tallinn.

According to Raamat, some operators who received those buses did not repair them because maintenance cost money and the vehicles were not their property. He said reports at the time had described buses catching fire on the road.

Gas and electric buses are also very expensive, he said, costing about twice as much as diesel buses. Giving them to incapable operators would create an even greater risk to passengers, Raamat said.

Ministry says buses will lower route costs

The Ministry of Regional Affairs and Agriculture said its goal was not to become a bus operator or create a separate state bus fleet.

“The buses are being acquired to support the adoption of environmentally friendly public transport and reduce vehicle acquisition costs in public transport expenditure,” said Andres Ruubas, head of the ministry’s public transport department.

The ministry said this should help lower the price per route kilometre and allow state funding to be used, for example, to increase the frequency of bus services.

Under the usual system, operators acquire the buses they need before new transport contracts begin and include the related costs in the price per route kilometre. The state therefore indirectly pays for the buses when it pays for the service.

Under the new arrangement, the state would cover part of the vehicle acquisition cost. Operators using the buses in public transport tenders would not include that cost in their service prices, Ruubas said.

Raamat disagreed with the ministry’s reasoning, calling it merely a transfer of money from one pocket to another that would ultimately cost taxpayers more.