Fast economic growth may call into question building of Tallinn Hospital

A rendition of Tallinn Hospital.
A rendition of Tallinn Hospital. Source: ERR

Estonia hopes to receive more than a billion euros in refinancing from the European Union, but good economic indicators may reduce this figure by hundreds of millions. Twinned with rising construction prices, this could hit plans to construct a major Tallinn Hospital.

The rapid pace of the Estonian economy after the arrival of the pandemic makes it more difficult to make use of the European Union Recovery Facility, as the amounts allocated therefrom depend on the extent of the setbacks that have hit a member state's economy.

The Minister of Justice and acting Minister of Finance Maris Lauri (Reform) says that she can't yet say how big of a cut would it mean for Estonia, but the original amount a billion euros could wind up being several hundred million less.

Lauri said the Tallinn Hospital project, which depends on refinancing, is as a result in great danger.

"The circumstances that would allow the hospital to be built are diminishing, especially when we look at the significant financial contribution of the EU. It seems that the price of the hospital tends to be higher and possibly significantly higher than originally planned. "The question is whether the state will intervene there. Maybe it makes sense to make the project smaller or divide it into stages," Lauri said.

Tallinn Mayor Mihhail Kõlvart (Center) said that the city is ready to add money to the Tallinn Hospital project if Estonia's participation in European rehabilitation funding falls, but that the state should do the same.

"We assume that this is an institution of national importance and need. If we see that economic growth is quite fast, it would be right to enter additional funds in the state budget strategy for the implementation of this project," Kõlvart said.

The mayor said that the capital has already promised that a hundred million euros will be invested in the large hospital project within six years, and if necessary, the city's possibilities will be reconsidered.

"If we can find out exactly what is the final decision of the European Commission, the amount of support, then it is necessary to look at the amount of additional state support and what are the city's opportunities. In any case, it is necessary to move forward with this project," Kõlvart went on.

Kõlvart said that dividing the project into stages is not the best solution, as it would make the construction of the hospital too dependent on European support mechanisms.

The estimated total cost of Tallinn Hospital is €520 million. Of this, the planned cost of planning, design and construction is €450 million and the investment in equipment is €70 million. The hospital is scheduled for completion in 2027.


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Editor: Roberta Vaino

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