AS Tallinna Vesi and City of Tallinn to Enter into Administrative Contract for the Next Ten Years
Tallinn City Council has approved the new Administrative Contract, approved by the Supervisory Council of AS Tallinna Vesi, with its Decision No 114 of 03/11/2022. One of the main purposes of this contract is to supply water to the customers of the public water supply and sewerage system in Tallinn and conduct and treat wastewater, stormwater, drainage water and other soil and surface water. The administrative duty was approved and AS Tallinna Vesi was appointed as the water undertaker within the main licensed territory for the next ten years, i.e. until 30.11.2032 (incl.). The current Services Agreement, entered into between AS Tallinna Vesi and the City of Tallinn on 12.01.2001, expires on 30.11.2022, the new Administrative Contract is entered into for the period of 01.12.2022-30.11.2032 (incl.).
Under the Administrative Contract to be signed, all investments in public water supply and sewerage facilities are planned to be covered by the charges authorized by law, in particular the prices for water services and connection charges. “The investments are planned on the basis of necessity, cost-effectiveness and feasibility, and ensuring that the implementation of these investments leads to using of public funds as little as possible. Under the current Services Agreement, making investments depended on the length of the pipelines to be reconstructed, i.e., AS Tallinna Vesi undertook to reconstruct at least 10 km of pipes each year,” Aleksandr Timofejev, Chairman of the Board of AS Tallinna Vesi explained.
“The City of Tallinn welcomes the conclusion of the new Administrative Contract aimed at ensuring high-quality water services for city residents and entrepreneurs, adherence to the principles of environmental protection, and increased attention to investments in order to ensure the continuous modernization of networks and the sustainability of the company,” Priit Lello, Tallinn City Secretary and Vice Chairman of the Supervisory Council of AS Tallinna Vesi said. The performance of the administrative duty will continue to be financed from by the charges for the services provided to customers and other water undertakings, and the prices for water services will be approved by the Competition Authority. As a customer, when using the services of AS Tallinna Vesi, the City of Tallinn will be charged similarly to all the other customers. In addition, the contract will regulate the matters related to charges for the provision of separate stormwater service and water extraction service from public water extraction points. The parties wish the price formation of the charges for the provision of separate stormwater service and water extraction service from public water extraction points to be based on the principles of regulation applying to the prices for water services. Under the Administrative Contract, AS Tallinna Vesi will also start to provide the service of conduct of stormwater, drainage water and other soil and surface water to separate stormwater sewer facilities. The functions of AS Tallinna Vesi will also include the water extraction service from public water extraction points in the public water supply system, including hydrants and water taps.
The contract stipulates that the City of Tallinn will pay a charge to the water undertaker for the provision of stormwater service and the operation of public water extraction points in the public water supply system, by analogy with the methodology for calculation of the prices for water services recommended by the Competition Authority. The signing of the Administrative Contract does not entail an immediate change in the consolidated revenues of AS Tallinna Vesi and, like the prices for water services, these charges include justified costs, capital expenditure and the justified profitability of the water undertaker.
| Sales (th €) | 2019 | 2020 | 2021 |
| Services of conduct and treatment of stormwater and water extraction from public water extraction points | 4 002 | 4 588 | 4 010 |
| Length of stormwater network(km) | 513 | 507 | 520 |
Sales from the services of conduct and treatment of stormwater and water extraction from public water extraction points under the current contract.
“The Administrative Contract aims to resolve as quickly as possible, in cooperation between the City of Tallinn and AS Tallinna Vesi, also the historical challenges, such as the unowned pipes, which is why the Administrative Contract provides for their transfer to AS Tallinna Vesi. In addition, the parties see a problem in the chain houses (properties with one supply point and water or sewerage pipes running through and serving several buildings) for which separate supply points should be built. Thirdly, the common aim of the parties is that all customers will be able to join the public water supply and sewerage services within the main licensed territory of AS Tallinna Vesi, supported by the City of Tallinn, where possible,” Aleksandr Timofejev, Chairman of the Board of AS Tallinna Vesi explained.
The Administrative Contract is available to all in the document management system of the City of Tallinn and on the website of AS Tallinna Vesi.
Maria Tiidus
Head of Communications
Tallinna Vesi
(+372) 626 2271
