Finance minister: Highway widening not feasible using private partnerships

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Keit Pentus-Rosimannus. Source: ERR

Construction of long-awaited four-lane highways between Tallinn and Estonia's largest towns will not make use of the public-private partnership (PPP) model, finance minister Keit Pentus-Rosimannus (Reform) told ERR Monday, though the use of PPP as a whole is set to grow, she said.

Pentus-Rosimannus' stance echoed that of Minister of Economic Affairs and Infrastructure Taavi Aas (Center), who told the Riigikogu in Jaunary that preference should be given to either borrowing or state funds, over PPP; the finance minister said Monday that PPP would be more expensive, adding that Estonia has little experience in the technique and so should use a smaller project to test the waters first.

Talking to ERR radio show "Vikerhommik", Pentus-Rosimmannus said: "Substantively, it would have meant the state getting fewer kilometers for a higher price."

"As a matter of fact, looking forward, in order for this experience to be gained, I think that [the policy of using PPP on a smaller project first] is  reasonable and sound," she added.

While the four-lane highways would comply with the EU's planned Trans-European Transport Network (TEN-T) program, they are not likely to be completed till 2038, she went on.

The government approved the PPP principles and guidelines at the end of 2019, a policy which would see large-scale infrastructure projects being built in Estonia.

At the end of August 2020, the Ministry of Finance announced a one-million-euro tender for consultancy services for the construction of the Libatse-Nurme section of the Tallinn-Pärnu highway, as a PPP pilot project.

Pentus-Rosimannus noted that whereas a recent 22-km stretch on the Tallinn-Tartu four lane highway cost €88 million, the Libatse-Nurme section, just four kilometers longer, would have costs €195 million via the PPP model, she said. Whether there were any other variables at play, such as soil conditions or other engineering challenges in the locations, in different parts of the country, was not reported.

Not only would state funds be a more cost effective way of completing the highway-widening work, Pentus-Rosimannus said, but also the work would be completed quicker.

Most of Estonia's main highways, radiating from Tallinn to Narva in the east, Tartu in the southeast, Pärnu in the southwest and Paldiski in the northwest, are two-lanes for the bulk of their distance, though four lane sections either already existed around the major towns, or have been put in place, primarily on the Tallinn-Tartu highway.

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Editor: Andrew Whyte

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