Official: Highway funding in Estonia requires political decision

Ahti Kuningas (left) appearing on 'Otse uudistemajast', Wednesday, October 19 2022, with interviewer Anvar Samost.
Ahti Kuningas (left) appearing on 'Otse uudistemajast', Wednesday, October 19 2022, with interviewer Anvar Samost. Source: Siim Lõvi /ERR

Road maintenance and construction funding requires a poltical decision and a discussion within society while, for instance, a €40-per-month road tax on vehicles would ensure current needs are met, likely incoming Ministry of Economic Affairs and Communications Secretary General Ahti Kuningas says.

Appearing on regular ERR politics webcast "Otse uudistemajast" Wednesday, Kuningas said: "I think we should instead look ahead. A transformation to the principle that the user pays is transforming everything."

Financing road-works had in the past come from fuel excise duties, he added.

Kuningas said in ERR's web show commenting on the former arrangement for financing roads, where the money for this was received from fuel excise.

"We are looking at other taxes as well, for instance should we introduce a car tax? At €10 per month, per car would bring in €80 million per annum, while €40 a month or more-or-less fully-comprehensive insurance, rates would cover our needs ... If there is a road tax, then it would be even easier for to carry out Public-Private Partnership projects," Kuningas, who until now had been deputy secretary general for transport at the Ministry of Finance, went on.

With the increasingly economical cars of today, Kuningas said, the current excise tax system will soon exhaust itself, and if the excise tax base disappears, it would be necessary to find alternative sources of income in any case. 

Kuningas put the current excise take at approximately €500 million per year.

"In my opinion we need to start a discussion on this one way or another, and today," he said.

As to the question whether he sees the political will present to introduce a tax of that kind, he replied: "You will never see that before an election."

The general election is in March 2023.

"You can't say it will come after that either. However, it is also clear that this debate will be had one way or another over the next decade at least," he went on.

Commenting on the statement that there is no political will in Estonia, which is why we don't have the Tallinn-Tartu, Tallinn-Pärnu, Tallinn-Narva four-lane highways, Kuningas said:

In commenting on a supposed lack of political will in Estonia, as evidenced by the continued non-appearance of hoped-for four-lane highways linking the capital, Tallinn, to Tartu, Pärnu and Narva, the secretary general said that: "We have always had this balancing of the state budget, or at least reaching balance as soon as possible, as a basic dogma, but going on this principle, there is simply a lack of money. There have always been other priorities; at the moment the priority is national defense. This money has to be taken from somewhere, but it cannot be taken at the rate of one euro, and rather it is taken from large objects - that is the issue here."

At the same time, officials from the Transport Board (Transpordiamet) and the Ministry of Economic Affairs will not get behind road construction at a faster rate than before, as projects are already being prepared for the construction of four-lane highways. "We won't go as far as building permits, because that would be a waste of money, since these last for five years. But what relates to plans and projects; this would exist," Kuningas said.

"As former deputy secretary general for transport, I say that, of course, Tartu and Pärnu highways can be four-lane, this is really a question of 'hygiene'," said Kuningas.

"There will be a new government in spring, and new budget negotiations. As I said, there is already a certain cover for 2023, so we are already talking about the next four years," he added.

Minister of Economic Affairs and Communications Riina Sikkut (SDE) and Minister of IT and Foreign Trade Kristjan Järvan (Isamaa) have jointly proposed the appointment of Kuningas as new ministry secretary general a little over a week ago, though his appointment has yet to be confirmed by the government.


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Editor: Andrew Whyte, Mait Ots

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