Kõlvart: Tallinn will need to borrow money to finance new hospital
Tallinn must borrow money to finance the building of a €400 million new hospital, Mayor Mihhail Kõlvart (Centre) said, but how much the city, the state, and the European Union will each contribute is unknown.
Kõlvart said modern medical technology requires a new building and the city will not be able to cope with the existing hospital buildings. Therefore, his intention is to move forward with the planned Tallinn Hospital project in Lasnamäe.
The new hospital is expected to cost approximately €400 million for a complex which will be used by citizens across the country. Financial support from both the European Union and the state is expected but no funding decision has been made, reported ETV's Aktuaalne kaamera on Monday.
"Today, our expectation is that no less than 50 percent [of the funding] should come from the European Commission. We think that Tallinn could contribute about 40 percent," said Kõlvart. If Tallinn's calculations are correct, the state would contribute the remaining 10 percent and Kõlvart believes this would be the best funding model.
However, negotiations are ongoing as the financial framework for the next budget period of the European Union has not yet been agreed. Ministries also have to agree on how much money, they want and what they want to apply for, from the European Union.
But the competition will be fierce.
Minister of Social Affairs Tanel Kiik said European Union funds are just like state budget funds - there are significantly more applications than for each euro on offer. "Today, when we look at the reality, we would like the European Union to fund the highest possible share, but whether that is 50% or less, will be revealed by the negotiations," Kiik said.
Kiik added the ministry's hopes the EU will contribute at least €100 million.
Kõlvart admitted the city would probably need to borrow money to build the hospital. "Of course, for such sums, it is impossible to talk about the city being able to raise funds from the budget alone; of course, [we are talking about] a loan, but the borrowing opportunities are also limited," Kõlvart said.
Kõlvart said the national decision will come in the spring and from the European Commission in the autumn. A working group has been set up to for the building of the hospital, and the city budget has earmarked money for a preliminary medical technology project.
Kiik said the hospital would be treating residents from all over the country, with the expected volume of patients to be split 50/50 between Tallinn and the rest of the population.
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Editor: Helen Wright