In 2006 the Estonian state decided to renationalise the railway system. It had been partly sold to an American company in 2001, but the company failed to deliver the investment and performance improvements which were required under its original contracts. In addition, the privatisation meant that the railway system was not eligible for EU infrastructure funds, and this public finance was more crucial for investment in Estonia’s railways than the private company’s performance.

As a result, in 2006 the government decided to renationalise the company in full, with effect from 2007. The crisis has demonstarted a further advantage of public ownership, because the rail company has been able to raise 40 million Euros from a bond repayable in 15 years at an interest rate of only 0.32% above the lowest available in Europe – private companies cannot get such long-term loans, or such low interest rates.