Estonia, Financial Services, Legislation, Railways, Transport

"Having familiarized itself with the materials presented by AS EVR Cargo, heard out the explanations of persons involved and basing it on the circumstance that realizing the business plan is only at an early stage, the National Audit Office based on the current information does not see the need to carry out additional audit procedures," Auditor General Alar Karis said in a letter to MPs Eerik-Niiles Kross and Kristen Michal who submitted the inquiry.

Kross and Michal in September turned to the National Audit Office to ascertain the legal and effective use of the funds of AS EVR Cargo.

The MPs said that the things that needed to be checked were the approval of the transaction by the company's supervisory board and the minister responsible, the process of acquiring the railcars and the cost. "A number of suspicions arose due to the fact that the state-owned EVR Cargo without competition and the decision of the supervisory board or general meeting, but with the silent consent of both, has bought 500 railway cars from Russia with a higher price than was offered by five companies in a competition," the MPs said in their inquiry.

According to the National Audit Office, the company's supervisory board approved the business plan with the decisions of April 17 and May 11 and gave the management board the powers for investing 35 million euros. The minister of economic affairs and infrastructure on April 26 adopted the decision of an extraordinary general meeting and gave the consent for entering into a contract.

The auditor general also said that when acquiring the railway cars, EVR Cargo compared the offers received and took into account the needs of the business plan agreed on the supervisory board, including the information of the railcar model, prices and supply times.

EVR Cargo in June entered into a 17.8 million euro contract to purchase 300 container platforms and 200 open wagons.

EVR Cargo's initial plan was to buy railway cars for up to 35 million euros, which they would then have rented out on the Russian market.

The company's new supervisory board in July temporarily and partly halted the implementation of the purchase and rental plan, but later decided to go forward with the plan.