Decision of Ukrainian Railways primarily affecting Baltic wagon owners - Estonian daily

TALLINN - The unexpected decision of Ukrainian Railways to ban the use of foreign wagons on its territory has stirred up the Estonian railway community, because Ukraine's move primarily affects wagon owners in the Baltics, the daily Postimees writes.

According to the daily, the reasons behind the decision are simple. Since transportation can no longer be organized in occupied Eastern Ukraine, and the flow of goods has decreased, Ukraine has developed an overabundance of wagons, and in order to make life easier for its entrepreneurs in the face of fierce market competition, the use of foreign wagons was banned.

Businessman Oleg Ossinovski said in a live broadcast of the Russian-language Postimees last week that this is a pragmatic and cynical approach.

"They accept help from Estonian taxpayers, but they don't allow them to work on their territory. [---] Ukraine has created preferences for its companies. Local wagon owners lobbied to ban the use of foreign wagons. All Baltic wagons have been stopped," he added.

The restriction primarily concerns the Baltics and Kazakhstan. Russian wagons have long ceased to roll on Ukrainian tracks, and there are few from other countries. According to Sergei Jakovlev, a member of the board of Oleg Ossinovski's company Skinest, more than 500 freight wagons belonging to Estonian companies (over 200 of them to Skinest, the rest to Teslar Trans, Koviton, Procura&Trustees, Maxirail, Kunda Trans) are currently being used in Ukraine. According to his estimate, the total economic value is about 20 million euros, the status of which could be defined by the word "frozen."

According to Kaido Zimmermann, CEO of Estonian Railways, the movement of wagons for export and import is not prohibited. Estonian Railways itself helped one company get wagons moving in the export-import direction by approaching Ukrainian Railways.

"Although there are still minor problems there, if the wagons are under repair, they are not released, etc.," Zimmermann added.

Both Zimmermann and economic expert Raivo Vare admitted that it is not unusual for countries to use protectionist measures on railways. According to Zimmermann, Estonia once did this when there was an overabundance of wagons. There is no need for this anymore.

However, when speaking to the daily, both Vare and Skinest's leading figure Jakovlev expressed surprise at the timing and context of the news.

"This is especially ugly considering the political context," Vare said, adding that Ukraine should keep its friends.

"Estonia, which has helped Ukraine the most, and now restrictions are being imposed. This is not just a railway business issue, but a broader political-economic and political issue," he told the daily, drawing the comparison that if we are lashing out at US President Donald Trump for "persecuting" allies, then how is Ukraine's move any different?

Jakovlev seconded this and said that in a situation where Estonia as a country has supported Ukraine so much, they are taking such unpleasant steps for us.

"Since the beginning of the war, investors have dared to leave their wagons in Ukraine. An alternative could be to remove this asset from Ukrainian territory. With such a step, investors would not risk a war situation, because the wagons could be bombed at any moment. The Ukrainian side was also interested in leaving the wagons in Ukraine, as there was a shortage of freight wagons," he said.

In the interest of fairness, it should be recalled that Skinest itself has also had to respond to criticism regarding moral propriety during the war in Ukraine due to the freight shipments of companies affiliated with it to Russia.

Last week, the entrepreneurs also met with the Ministry of Foreign Affairs, which confirmed that it is working on the issue and will write to the Ukrainian minister of transport in the near future. According to information available to Postimees, Ukrainian Deputy Foreign Minister Olexandr Mischenko has already contacted Ukrainian Railways with questions.