Tallinna Vesi Granted Reprieve on Tariff Cuts
The capital's monopoly water utility won a minor victory in its long-running legal battle with the Competition Authority over tariffs on November 11 in the form of a court injunction giving it temporary protection against the authority's mandated price cuts.
The move comes at the start of the Tallinna Vesi court case, in which the company is seeking to overturn an order issued by the Competition Authority last month demanding that it either submit a proposal by November 14 to cut its service prices or have all current prices unilaterally lowered by 29 percent.
The Tallinn Administrative Court issued the injunction, requested by Tallinna Vesi on November 10, which frees it from having to comply with the order until December 19. By that time the court will have decided whether to extend the protection until a final decision in the case has been reached, a statement from Tallinna Vesi said.
The two sides have been locking horns since last November, when the Competition Authority first refused to approve Tallinna Vesi's proposed 3.5 percent price hike, saying that the company's application did not conform to the requirements of the Public Water Supply and Sewerage Act.
In May, it turned down the request again, citing differing opinions on what a reasonable profit for the monopoly water supplier would be. The company took the regulator to court over the refusal the following month.
Tallinna Vesi has long been criticized, including by the Chancellor of Justice, for its profit margins. The monopoly water supplier's profit margin rose from 42.8 percent last year to 64.4 percent this year. The Competition Authority has also been questioning the legality of Tallinna Vesi's pricing policies, as well as the terms under which the company was privatized in 2001.
For its part, Tallinna Vesi has maintained that its policies have conformed to the terms of its privatization agreement, and that the authority's blocking the 3.5 percent rise constitute a breach of that contract.
Steve Roman