Estonia wants private financing for motorways
Estonia's Finance Minister Martin Helme wants to finance the construction of new motorways and bridges through so-called Public-Private-Partnerships (PPP). Commentators warn that the conservative politician's plan aimed at easing the burden on the public budget and avoiding bureaucratic delays won't work.
That trick doesn't work anymore
The Public Private Partnership (PPP) won't be enough to get risky state investments past the EU's bean counters, warns Keit Kasemets, representative of the EU Commission in Estonia, in Äripäev:
“Eurostat will take a look at the risks and see that they are being carried entirely by the Estonian government. According to the logic of budget calculation it's as if the government itself were doing the building. Meaning the investments will necessarily increase the budget deficit. ... PPP was very popular 15 years ago when off-balancing [non-inclusion of expenditures in the state budget] was easy. Today the rules are stricter - and this is the most ridigly controlled sector in the entire economy.”
It won't happen that fast
Such projects can't be implemented as quickly and easily as the finance minister claims, Õhtuleht stresses:
“This is an empty promise from the finance minister because expert reports and contracts take time. ... And there are other hurdles that could considerably delay the start of construction: major infrastructure projects often encounter resistance from interest groups and people who live in the area. And because of the work being done for Rail Baltic, the building sector will be overwhelmed with work. It will be interesting to see how the right-wing populist party explains the many guest workers. Because the existing manpower won't suffice for these large-scale projects.”