Port of Tallinn Ferries €30 Million More Expensive, Says Ministry
The Ministry of Economic Affairs said buying the ferries from the Port of Tallinn after the end of a 10-year domestic ferry service contract, in 2016, would cost 30 million euros more than from Saaremaa Laevakompanii (SLK), the owners of current operator Väinamere Liinid.
The ministry recently decided that the Port of Tallinn will take over the service for the next 10 years from the fall of 2016, and one clause in the contract was that the state would have the ministry would have the right to buy the ferries from the operator.
The ministry said the Port of Tallinn asked for 200 million euros in subsidies over the 10-year period, 60 million less than SLK.
Rasmus Ruuda, a spokesman for the ministry, told uudised.err.ee that the 60-million figure is still correct, as the ministry has the right, but not the obligation, to buy out the ferries after the contract ends. “Calculations can be done in a number of ways, but the fact that service offered by one company is around six million euros more expensive for taxpayers each year, compared to the other bid,” he said.
Daily: new offer on the table
Olav Miil, who owns the three ferries currently servicing the routes in question, between the main land and the two largest islands, has offered to rent his ferries to the state at a cut price, Eesti Ekspress reported today.
Currently the state pays 12,900 euros per ferry per day in subsidies to SLK, with that sum increasing to 14,700 next year, but Miil is asking for 10,000 per day, or 8,200 is the contract is signed for 20 years, although the Port of Tallinn said no such offer is yet on the table.
Investment banker Kalle Norberg has proposed creating a new company, with the state controlling the preferred stock, which would cost only a few million euros, with the rest going to the stock market.
The company would buy out Miil's ferries for around 130 to 140 million euros, with that sum coming from the sale of common stock to Estonian pension funds and investors.
Norberg said the scheme could have returns of 8 percent per year for investors, and once the ferries have been fully purchased, the state could cut down on subsidies, but he added that so far state officials he has approached have not been thrilled by the idea.