Tallinn finds 21-year bus stop pavilions contract duration just fine
Even though 21 years might seem like a long time for a contract, there are practical reasons for why the city of Tallinn and JCDecaux just entered into such a contract for public transport stop waiting pavilions and their maintenance, the sides said.
Tallinn and JCDecaux have signed a contract that will put the latter in charge of installing and maintaining Tallinn public transport stop waiting pavilions for the next 21 years. The company will also get the right to display advertising on the structures.
In addition to 1,200 new pavilions, JCDecaux will install 34 public restrooms and 141 outdoor advertising display cases.
While a 21-year contract duration might raise eyebrows, Tallinn City Chancellor Kairi Vaher told ERR that it is hardly unusual.
"The usable lifespan of a single pavilion and other structures to be installed as part of the contract is around 20 years," she said, adding that Tallinn will get ownership of the structures after the contract runs its course and can decide whether they need to be replaced or repaired.
JCDecaux said that the contract duration was chosen by the city and it is quite widespread internationally.
"International experience tells us that such contracts usually span 15-25 years," Kristiina Sepp, executive manager of the company, said.
Tallinn Mayor Mihhail Kõlvart said that the road to the contract was long as tender results were challenged on numerous occasions. In the end, all challenges were rejected.
Kairi Vaher said that the city reserves the right to terminate the contract in case of serious violations of its terms by JCDecaux, as well as to demand compensation for damages.
Tallinn to pay nothing, collect advertising tax
Tallinn said in mid-January that the city will not have to spend a single cent on the installation or maintenance of waiting the pavilions or billboards. On the contrary, advertising tax will yield the city up to half a million euros a year for a total of around €10 million over 21 years.
"Once all structures are in place, the city is looking at €500,000 in advertising tax revenue annually. We estimate that all the structures will be installed inside five years." the city chancellor said.
"This makes it possible for the city to uphold its end without having to invest money," Mihhail Kõlvart said. "We hope our partner will also be able to generate revenue as the pavilions can be used as advertising space and the company reserves the right to install more."
The design, construction and installation of the waiting pavilions is estimated to cost €25 million, which JCDecaux hopes to cover through advertising sales.
The first 300 of the 1,200 new pavilions will be installed next year. Tallinn currently has 960 such pavilions.
The new pavilions will sport two different designs, one by Tallinn and the other by JCDecaux.
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Editor: Marko Tooming, Marcus Turovski