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Sarapuu wants permission for group-internal transactions in waste disposal

Center Party parliamentary group chairwoman Kersti Sarapuu.
Center Party parliamentary group chairwoman Kersti Sarapuu. Source: (Siim Lõvi/ERR)

Center Party parliamentary group chairwoman Kersti Sarapuu submitted a proposal to the Economic Affairs Committee of the Riigikogu to allow internal transactions, i.e. transactions between subsidiaries of the same parent company, in the waste disposal business just as her husband, Tallinn deputy mayor Arvo Sarapuu, is being investigated for his ties to the business.

The Riigikogu's Economic Affairs Committee discussed in March Mailis Reps' (Center) proposal to change the bill for the Public Procurement Act to allow for internal transactions, i.e. transactions between subsidiaries of the same parent company, in waste management and while the proposal was rejected at the time, Sarapuu submitted the same proposal again this week, reported Eesti Päevaleht (link in Estonian).

In the case of an internal transaction, a local government unit, such as Tallinn city government, would conclude a contract either with an undertaking in which they have a stake or a foundation established by the local government, such as Tallinn Landfill Ltd, who would thereafter have exclusive rights, without any competition, to provide waste collection services within the local government unit's territory.

Kersti Sarapuu justified the proposal by explaining that by allowing internal transactions, contracting entities would not have to organize public procurements and as waste collection must continue even in situations where a contract has already come to an end with a previous service provider and a new public procurement is only just underway, this would only be possible with an internal transaction.

Arvo Sarapuu accused of meddling with waste disposal in Tallinn

Her husband, Tallinn deputy mayor Arvo Sarapuu (Center), who supervised waste disposal in the capital city, claimed that businesses in his ownership have not participated in waste disposal procurements in Tallinn, despite contrary claim made by Ragn-Sells Estonia CEO Rain Vääna and Eesti Keskkonnateenused (EKT) CEO Argo Luude regarding his meddling with the city's waste disposal businesses and tenders.

According to the minutes of the Riigikogu's Anti-Corruption Select Committee meeting that took place on May 8, EKT's Argo Luude is accusing Sarapuu of having lied to committee chairman Artur Talvik (Free Party) when he told him that he had never so much as been interested in the garbage business.

Luude pointed out that there were tender documents that showed that Atko Liinid, a transport company owned by the Sarapuu family the board of which Arvo Sarapuu chairs, had participated and entered a bid as well. Sarapuu had also shown interest in buying Tallinn landfills from Veolia, formerly the parent company of EKT.

The plans made then aimed at keeping Ragn-Sells, who at the time were getting ready to compete, out of future waste disposal tenders, Luude said, adding that Ragn-Sells was also slowed down and bullied by the city council by making them wait for permits, and by repeatedly coming up with new conditions the company had to meet.

"I sat on the board of the Tallinn landfills with Arvo Sarapuu, and he himself talked about how he was planning to demand different documents from Ragn-Sells that they didn't have anyway," Luude told the committee.

In 2014, the city of Tallinn announced tenders that didn't require bidders to have any kind of reference in the waste disposal business. "It was clear that the idea was to let random businesses enter the market," said Luude. "When the bids were made public, it became clear that a new company, BWM, had made an offer."

After the city initially rejected BWM's exceptionally low bid, saying that it was underestimating certain costs, it gradually accepted the company as a viable contender, and it started taking on contracts in some parts of the city. In Nõmme, it operated without a license, a problem that Sarapuu played down. Not having a license turned into a serious problem for Luude's EKM a little later, when the city partially suspended EKM’s license to put pressure on the company in a tender dispute.

Weekly Eesti Ekspress also reported in March that the connections between Sarapuu, the city's planning department, BWM and Atko were close, a fact Luude also referred to. Atko CEO, and Sarapuu's son-in-law Margo Tomingas, is involved in the business of BWM and has purchased garbage trucks for the company. BWM's trucks are also maintained and parked on Atko-owned territory and, according to Luude, the company actually rents them from one of Sarapuu's businesses.

Sarapuu: I wasn't lying

"The story may be here — I found out later that in Harju County or some county, a business tied to ATKO Group had submitted a tender and came in last and did not participate in a single activity," Sarapuu told ERR's television news on Wednesday.

Sarapuu explained that as this was the case, he could not be accused of lying for previously telling ERR that he has not participated in waste disposal procurements, as he was referring to Tallinn procurements specifically.

Editor: Aili Vahtla

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