Estonia lost 12,3 million euros with the sale of the Finnish branch of Operail. Last year it sold Operail Finland, the former name of the subsidiary, to Nurminen Logistics. Estonia sold the subsidiary at a price below its fair value, leading to allegations of a secret sale.

As part of the privatisation of Operail, Estonia sold off the Finnish branch of its national railway operator. Nurminen Logistics bought the branch at a price far below its fair value. According to Estonian publication Eesti Ekspress, Nurminen Logistics’ 2023 financial report reveals that Estonia incurred a 12,3 million euro loss as a result of the sale.

The February 2023 transaction amounted to 27,7 million euros. The vast majority – 18 million euros – covered a loan for the purchase of locomotives. The remaining 9,2 million euros were Operail Finland’s net assets. Nurminen Logistics later valued the assets at over 21 million euros. Consequently, it gained 12,3 million euros.

A sale in secrecy?

Eesti Ekspress says that it wrote already in 2022 that Estonia planned to privatise Operail. The sale reportedly took place “under the cover of secrecy” without involving the public or Estonian railway businessmen. As public competitions usually yield better results, “the Estonian state gave a gift of 12 million euros to Finnish railway businessmen,” according to Eesti Ekspress.

The head of Operail at the time, Raul Toomsalu, denied the allegations of secrecy. “To my knowledge, there were no complaints from any company claiming they were interested in the Finnish assets but unable to participate,” he said. According to Toomsalu, Estonia invited hundreds of companies to participate in the competition for the Operail Finland takeover.
Little interest

Eesti Ekspress also points out that there was little interest in Operail as a result of Russia’s invasion of Ukraine. Sanctions hurt Operail’s business, which saw previously large commercial interest disappear. The Estonian government itself also forced Operail Finland to quit transporting Russian nickel. This may also have contributed to the decline of business interest in Operail Finland.

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