BBN is an online English-language news service providing business and most important political news from Estonia. The news are mainly based on daily newsflow from the Bonnier Group business newspaper Äripäev.
Marge's Biography
CommentsPosted: Wednesday 09/09/2009 08:27
Estonia supports Vjatšeslav Leedo’s monopolistic ferry business with billions of kroons to at least 2016, Äripäev reports.
In September secret documents came out, revealing that Leedo has built his monopolistic business from the state’s money. The state has paid for the ships long ago, but they’re still in private hands.
In 2006 the state with Edgar Savisaar, Minister of Economy, signed a ten-year contract with Leedo, giving Leedo the right to be the only ferry operator.
Tõnis Rihvk, the CEO of Leedo’s Saaremaa Laevakompanii (SLK) donated Centre Party with EEK 500,000 before Parliament elections in 2007.
“The biggest minus of the tender was that there wasn’t real competition,” Mario Lambing, expert from the economic analyses division at the Ministry of Economic Affairs and Communications said.
At the tender a company had to offer the price with which they were willing to offer the service. The company had to assess its annual fixed costs and how much a trip will cost.
Lambing said they paid for the trips which have actually taken place and a company files a report on trips, passengers, vehicles, incomes and expenses each month.
“Cost of ferry service was also under question during negotiations. The price was notably higher from previous one and it was difficult to base that on changed expenses. In the end the carrier agreed to lower the price, but total cost of service increased despite that,” Lambing said.
Leedo doesn’t comment the documents. Meelis Atonen, a Minister who had disagreements with Leedo and finally stepped back.
Leedo got 8 ferries from state company Saarte Liinid for EEK 4 mln back in 1997.
The state had a condition that Leedo must invest to new ferries in time. In the end the state paid for the new ships as well. PricewaterhouseCoopers, an auditing company which controlled donations given to SLK, said in 2000 that the state has paid company’s capital rent in form of paying for amortization costs.
In 1998-2003 the state paid EEK 135 mln to Leedo for ferries’ amortization and rent costs. Leedo paid EEK 63.2 mln for three ferries – Regula, Ofelia and Scania.
The cost the ten ferries SLK owned in 2004 was EEK 283 mln, while the state had paid EEK 500 mln as donations to the company.
In 2005 Leedo sold four ships to Arco Vara owners’ Richard Tomingas and Hillar-Peeter Luitsalu’s company Euro Shipping OÜ sister companies for EEK 350 mln.
Article Source: http://www.bbn.ee/.. ../Default.aspx?PublicationId=ab198df9-04bd-4e24-ab4e-01f4179cac1b
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