Association: Loan should be taken out to rebuild main highways

Võõbu-Mäo section of the Tallinn-Tartu Highway has opened to traffic.
Võõbu-Mäo section of the Tallinn-Tartu Highway has opened to traffic. Source: Olev Kenk/ERR

The financing of state highways was a key national concern debated in the Riigikogu. Members said in their statements that road maintenance and development require more attention, while the head of the Estonian Infra Construction Association (ESTICA), suggested taking out loans to close the major deficit gap.

Sven Pertens, the chair of the board of the Estonian Infra Construction Association (ESTICA), said that if Estonia continues to build roads at the same pace as in the preceding 30 years, the three main roads: Tallinn-Tartu, Tallinn-Narva and Tallinn-Parnu will be four-laned in more than a century.

"The level of investment has been extremely low. The annual road and street repair debt in Estonia is already €4.4 billion and we intend to invest €201 million next year, which includes road maintenance costs and taxation," Pertens said.

Minister of Economic Affairs and Infrastructure Riina Sikkut (SDE), said that the state budget's priority this year is defense spending and people's livelihoods. Construction of roads is not a top priority.

"This government, which has been in office for roughly eight months, did not agree on tax changes or additional revenues, so investment decisions - not only in road construction, but also in other areas - will remain the subject of the next coalition agreement, where more can be done on the revenue side," Sikkut explained.

Sven Pertens said that the deficit began in 2015, when financing for road maintenance was separated from motor fuel excise taxes. Prior to that time, 75 percent of the excise charge on motor fuel was directed to road maintenance.

He suggested to reintroduce this provision in order to sustainably fund road repairs. Nevertheless, he says that a loan should be taken out now to reduce the deficit.

"Latvia has committed to construct 1,054 kilometers of four-lane main roads by 2040 and wants to borrow approximately €5.8 billion to do so. Our loan may not be that large, but given the backlog, it could be in the billions. However, it may not be necessary to take it all at once," Pertens said.

"There are options for financing, which were also addressed in the room, including the budget, tax revenues, a long-term loan and a public-private partnership, but decisions here are still due," Sikkut said.

The debate was initiated by the special committee on the control of the state budget, chaired by Tõnis Mölder (Center), who said that road development should be addressed in the election platforms of political parties.

"This will ensure the competitiveness of the Estonian economy, but another, most important reason is that we all want our family members who leave the house in the morning and travel on Estonian roads return home in the evening safe and healthy," Mölder said.


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Editor: Kristina Kersa

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