Tallinn seeks compensation or annulment of government scrapping of hospital

Model of the planned, now scrapped, hospital in Tallinn.
Model of the planned, now scrapped, hospital in Tallinn. Source: Tallinn city government

Tallinn City Government is seeking up to €39 million in compensation over a cancelled project which would have seen a central hospital built in Tallinn and which would have been funded by European Union money. Two local authorities in western Estonia have also issued complaints over the cut funding to projects in their areas, which together with the hospital, totaled €360.3 million in aid.

The decision was made at the end of June at a time when Reform was in a minority government on its own. Tallinn City Government consists of a coalition with Center as the senior partner and the Social Democrats (SDE) as junior partner.

X said: .The City of Tallinn filed its complaint with the third-tier Harju County Court on Monday, wherby we contest the decision of the Government of the Republic of Estonia from June 30, to exclude the [proposed] Tallinn Hospital from the objects of refinancing. We find that this decision is neither justified nor has it been considered in its substance, meaning it it is not legitimate,"

"Under the provisions of the law, as an initial step, we have to challenge the administrative act and request its annulment, which means that the government of the republic, if our appeal should be satisfied, will be able to make this decision anew; to reconsider it, hopefully to make the right decision also, if it is ultimately found that there is a desire to revise the list of refinancing objects," she went on.

Alternatively, the City of Tallinn would take compensation of €39 million, including €19 million on design costs, as well as liabilities the state had taken on in relation to the construction of the proposed Tallinn hospital, and in relation to preparatory activities that the city plans to continue with, Lello said. 

This sum has not been finalized amnd could be clarified after meetings with, for example, the Ministry of Social Affairs, Lello added.

Two other municipalities have also challenged the same government decision which scrapped a planned extension of a rail line in western Estonia, running between Turba, Harju County, and Risti, Lääne County. The City of Haapsalu and Lääne-Nigula rural municpality have challenged the government's decision in the Harju County Court are the authorities which have issued complaints in relation to this development.

Currently only the preliminary list of recovery funding projects has been forwarded to the European Commission, meaning the government could still implement changes if the political will was there, Lello added. The disruption, however, means that even if recovery fund money were forthcoming, time may be too short to complete the project to schedule, though alternative sources could be looked at, Lello went on.

The government pulled the plug on the Tallinn Hospital project, worth €280 million in EU funding, the Turba-Risti rail extension, earmarked at a further €34 million and also a multi-purpose helicopter ambulance worth €46.3 million, among other, smaller projects, on June 30, at a meeting involving five ministers. Then-defense minister Kalle Laanet and then-IT and foreign trade minister Andres Sutt were absent from the meeting, chaired by finance minister Keit-Pentus Rosimannus, as was the prime minister, who was out of the country at the time due to the NATO Madrid Summit. As noted the administration consisted only of Reform Party ministers; Reform are now in office with Isamaa and SDE, at the national level.

The government justified the decision on the grounds of reduced EU Recovery and Resilience Fund money being allocated to Estonia, due to a better-than-expected rate of economic growth.

Should the courts rule in favor or Tallinn, Haapsalu and Lääne-Nigula authorities, however, the most likely outcome would be a new government decision to leave the proposed projects unfunded, given that they were all Center Party-sponsored projects, a party which is now in opposition at the national level.

Central Tallinn is currently served by the East Tallinn Central Hospital (ITKH) and the West Tallinn Central Hospital (LTKH).

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Editor: Andrew Whyte

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