Mayor: Tallinn water supply to be put ahead of profits after acquisition
Tallinn will increase investment in Tallinna Vesi, which provides the capital with its water, drainage and sewerage needs, after purchasing a majority stake in the company last week, Mayor of Tallinn Mihhail Kõlvart (Center) said. Water tariffs will remain constant in the near future, he added, noting that supply would be put ahead of profits.
As reported by ERR News, Tallinn is acquiring a 52.35 percent stake in Tallinna Vesi from U.K. water company United Utilities Tallinn B.V., its largest shareholder up until now. United Utilities was reportedly looking to sell its shareholding.
Renewables firm Utilitas is also acquiring a 17.6 percent share in the transaction, which cost €100 million, shared equally by both major shareholders.
Budget to 2024 to be sped up
Tallinn now wants to invest more in the water and sewerage network, Kõlvart said, adding an exact plan has not yet been made and that the current investment plan to 2024 is likely to be fast-tracked.
Renovating pipeline and sewerage investments was a priority, Kõlvart added, noting that the city had drawn Tallinna Vesi's attention to this in the past, though stopping short of criticizing the previous owner.
Kõlvart said: "We want the company to continue to be listed on the stock exchange. We can see that small shareholders can remain as well, as Tallinn is also interested in the company generating returns and income."
"At the same time, we understand that in the long run, of course, the public sector has a strategic plan. The company must first and foremost ensure the quality of service, meaning drinking water. This is not only a matter of utilities, but also a matter of security.
Mayor: No plans to raise water prices
The city will also direct the company's dividends to the city budget, though what these sums might be, Kõlvart said was not yet known.
There are no plans to increase water price tariffs in the near future, Kõlvart noted.
He said: "Our strategic vision is that the city does not plan to initiate a tariff increase in the coming years. At the same time, we can see that an opportunity to gradually increase investment, and how tariff policy will develop in the long run than in the coming years. This also depends on the point of view of the Competition Authority."
The actual sale has to also be approved at the next Tallinn city council sitting on Thursday.
The Center Party has an absolute majority on Tallinn city government.
Follow ERR News on Facebook and Twitter and never miss an update!
Editor: Andrew Whyte