The Ministry of Economic Affairs and Communications has hit TS Laevad, the ferry operating subsidiary of the Estonian state-owned Port of Tallinn, with a penalty of €100,000 for the late delivery of four new ferries for its island routes.
In accordance with an agreement concluded between the ministry and TS Laevad, the latter must operate the Rohuküla-Heltermaa and Virtsu-Kuivastu routes connecting Estonia's larger western islands with the mainland with a total of four new ferries. The €100,000 fine was imposed because the company has to date failed to bring the total number of operating ferries to four.
The ministry also gave the ferry operator until July 1 to cease its violation of their agreement and begin operating with the required number of new vessels. The ministry reserves the right to impose further penalties on the company in the event of noncompliance.
The ministry most recently fined TS Laevad in the amount of €400,000 for the late delivery of the new ferries in January 2016. The maximum fine the ministry could impose on the carrier was €5 million, which it would have claimed had ferry traffic come to a complete standstill. Considering the nature of the breach of contract, the ministry decided that an initial penalty of €400,000 was appropriate.
Under the agreement between the Estonian government and TS Laevad, four brand new ferries were to be put in operation on the two island routes beginning Oct. 1, 2016, when TS Laevad took over the subsidized service from private operator SLK. Due to the delay of the delivery of the ferries, the state-owned operator had to use older ships to meet the provisions of the agreement concerning available volumes and frequencies.
The ministry checks the service for compliance with the agreement every three months and has the right to fine the operator up to €100,000 for each vessel not meeting the terms of the agreement unless the substition of the vessel is caused by force majeure or a technical malfunction.
Editor: Aili Vahtla