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EU pre-accession funds in Estonia 01.10.2000

Billions for Sustainability? The use of EU pre-accession funds and their environmental and social implications – First Briefing, lehekülg 18-24
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(a) Process of setting up the pre-accession funds structure in Estonia

Summary

So far the preparations for EU pre-accession funds have gone rather slowly and without public involvement in Estonia. Poor institutional capacity remains one of the major problems of Estonia, raised by the European Commission in the accession process. Public involvement in preparation process of both regulations/institutions and projects for pre-accession funds has been extremely poor.

Process

Estonia submitted its application for the EU membership in 1995 and signed the Association Contract (European Contract) also in 1995. In December 1997 Estonia was chosen as a first wave accession country and accession negotiations started in March 1998.

The basic document for pre-accession funds, the National Development Plan (NDP) was finalised in September 1999. For SAPARD a Regional Development Plan was done in 1999, ISPA projects were prepared and presented to the Commission by Ministries of Environment and Transport. Phare SPP (Special Preparatory Program for Structural Funds) is carried out to prepare Estonia for upcoming Structural Funds. Nevertheless the formation of an entire institutional set-up (especially auditing and monitoring mechanisms, fiscal schemes) for the pre-accession funds is still not entirely completed and there are already big delays in the process. For examplem, it is clear by now that because of poor preparations by both Estonia and the EU no SAPARD projects will be financed in the year 2000.

It is estimated that Estonia will receive around 56 million Euro per year from EU pre-accession facilities: around 30 million Euro from ISPA, around 12 million Euro from SAPARD and 24 million Euro from Phare 2000+.

Involvement of public and interested NGOs to the process selection, preparation and monitoring of projects to be financed from pre-accession funds was not done by the Government. There is no pro-active dissemination of information on pre-accession funds although some information could be found on the web sites of various state institutions. There are cases when information requests by NGOs about the pre-accession funds have received no reply at all. There are cases (like the one with the NDP) where the same document is differs in Estonian and English languages.

Problems with ISPA projects

Environmental Projects:

Projects that were proposed for ISPA funding from the Ministry of Environment are well prepared and quite well justified as they are among priorities set by the environmental policy (National Environmental Strategy, NES and National Environmental Action Plan, NEAP). Estonian NGOs have been actively involved in both NES and NEAP processes. Nevertheless NGOs were not consulted in the selection process of projects for ISPA. It is very strange and worrying signal that according to the Ministry of Environment two projects that were presented for ISPA funding were actually not initiated from Estonia but were proposed by the European Commission itself.

The Ministry of Environment has stated that because of the high minimum level of ISPA projects (5 million Euro) it failed to present two high priority projects for Estonia. Estonia is a small country and environmental project of 5 million Euro would be a mega-project. Even when the Ministry tried to group several municipal water and sewage projects together under one title (for planned investments in water supply and sewage systems in 17 and 24 towns) it could not meet current ISPA requirements because it was packet of small projects and not one big project. Regrettably, the regional waste management projects were left out of the list because of the same reason. This situation poses a big problem for Estonia.  There have been several sizeable investments (also from bilateral grants and loans) for water, sewage and waste management projects in larger cities.  However, it had been very difficult to finance similar projects in small towns, where these facilities are either in a very poor condition or do not exist at all. As it is clear by now here there is also no hope that such projects could be financed by ISPA.

Transport projects:

While the Ministry of Environment has long experience in preparing projects for foreign assistance the Ministry of Transport lacks such knowledge and the entire process was slower and more uncertain in its case. There is also less information on accession process available for transport sector. Although there are many rail projects proposed to the Commission for ISPA funding the entire packet of projects does not support sustainable transport ideas. For example the Tapa railway yard reconstruction project includes building of car viaduct to the centre of town which could be hardly justified. The proposed Tallinn railway bypass construction will be made just for serving freight (oil in the future?) transport from Russia to the Port of Paldiski. According to ISPA regulations there is also one project which should not be considered for ISPA financing at all as it is for building a street within town (access road to the Port of Tallinn). Unlike the ISPA environmental projects, there is no information available about transport projects that are to be presented for ISPA funding for 2003-2006.

(b) Case study: Tallinn landfill (ISPA, 10 million Euro)

This case-study is about Tallinn landfill, an environmental project presented for ISPA financing. Although NGOs generally welcome the project there have been problems related to it (especially little transparency and consultations).

At the moment there are more than 500 small landfills in Estonia. All of them are rather old and do not fit current environmental and health standards. Thus there is a plan to start closing of all these landfills and to construct instead 7-12 new big regional landfills for municipal waste that would meet EU requirements. The first such new landfill will be opened already in the year 2000. For the capital city Tallinn the same process was chosen. The current landfill in Pääsküla (in South-Western part of Tallinn) was opened in early 1970s and is in a very bad condition. Planned full closure of Pääsküla landfill will take at least 5 years and after that it will be safely covered by a recreational area with sports centre for horse raiding, mountain biking and skiing opened in the 30-hectare area currently covered by waste mountains.

To replace the current landfill a new location in Jõelähtme, in former phosphorite mining area some 20 kilometres East of Tallinn, was chosen. First plans to create new landfill in Jõelähtme are dated already back to 1970s, however the plans did not materialise then. Public discussions and preparations started again in 1989. In 1996 the Tallinn city government officially chose Jõelähtme as location for new municipal landfill for the city and the hinterland. Municipal waste company Tallinna Prügila AS launched international tender in January 1999. After tough negotiations that lasted for more than a year an agreement was signed on May 16, 2000 with the German company SKP Recycling AG & Co (a subsidiary of Cleanaway Ltd from UK). The company will start building and operating the new landfill on 67 hectare area and with total capacity of 4.5 million tons.

Although the location is probably best for new Tallinn region landfill for municipal waste there have been several problems connected to entire process of selection and preparation of the project. First of all there is quite big local resistance against the project. It is understandable that owners of land and property close to the planned landfill do not feel happy about the plans. Such actions a petition against the project and protest articles in media had been carried out. It seems that the task of informing the public about the project and its impacts had not been sufficient. Continuous flow of information and proper public meetings for 5,000 inhabitants of the Jõelähtme municipality/parish would have made the difference as both the need for new regional landfill and its location are generally welcomed by NGOs.

Also the process of negotiations with the landfill operator company SKP Recycling had been secretive and both public and media kept expressing their concerns that the city of Tallinn (the land does not belong to local municipality, it belongs to the state and city of Tallinn holds rights for building on it) is behaving too weak in negotiations. Tallinn promised certain level of profit for SKP although in lower level than SKP had originally strongly demanded. Still profit for SKP is guaranteed even if the landfill is not actually producing profit.

Fortunately no volume of waste was guaranteed to the SKP (although it wanted to have rights for handling all the municipal waste of Tallinn). As the Jõelähtme landfill is quite far from Tallinn (some 20 km East from the city) there is danger that people will increasingly just carry their waste to forests closer to the city. As charge for disposal of municipal waste will be high in new landfill (32 Euro/tonne, a three-fold increase from the price in current Pääsküla landfill) the market should be open for competition. A recycling company RagnSells has already announced an idea to build another landfill closer to Tallinn where the charge would also be cheaper.

The Estonian Ministry of Environment is seeking ISPA funding for two phases of the project: constructing of new Jõelähtme landfill (ISPA would be financing an access road and water scheme there) and for closure of the existing Pääsküla landfill. 10 million ISPA grant is requested for 2000 and 2001. Total cost of the project is 31 million Euro.

 

(c) Lists of projects to be financed in Estonia from pre-accession funds (million Euro)

 

ISPA - environment

 

2000

2001

2002

2003

2004

2005

2006

Total

(1) Tallinn landfill (phases I and II)

X

x

 

 

 

 

 

9.6

(2) Tartu sewage collector

X

x

 

 

 

 

 

5

(3) Viljandi sewage system rehabilitation

X

x

 

 

 

 

 

5.5

(4) Narva sewage system rehabilitation

X

x

x

 

 

 

 

5

(5) Kohtla-Järve sewage system rehabilitation

 

x

x

 

 

 

 

5

(6) Tartu waste management

 

x

x

 

 

 

 

5

(7) Pärnu waste management

 

x

x

 

 

 

 

5

(8) Tallinn wastewater (phase I)

 

 

x

x

 

 

 

5

(9) Muuga harbour oily wastes management

 

 

x

x

 

 

 

5

(10) Air pollution reduction (phase I)

 

 

 

x

x

x

 

15

(11) Vaivara hazardous waste management

 

 

 

x

x

 

 

10

(12) Paldiski radioactive wastes storage

 

 

 

 

x

x

 

10

(13) Tallinn wastewater (phase II)

 

 

 

 

 

x

x

10

(14) Air pollution reduction (phase II)

 

 

 

 

 

 

x

15

TOTAL

 

 

 

 

 

 

 

110.1

 

ISPA - transport

 

2000

2001

2002

2003

2004

2005

2006

Total

(1) Via Baltica road and East-West road corridor

X

x

 

 

 

 

 

37.7

(2) Tapa railway yard reconstruction and viaduct

 

x

x

 

 

 

 

8

(3) Tapa-Tartu railway line rehabilitation

 

x

x

 

 

 

 

7.4

(4) Koidula railway border station construction

 

x

x

 

 

 

 

10.5

(5) Tallinn railway bypass construction

 

x

x

 

 

 

 

2.6

(6) Access road to the Port of Tallinn

 

 

 

 

 

 

 

5

TOTAL

 

 

 

 

 

 

 

71.2

 

SAPARD

 

2000

2001

2002

2003

2004

2005

2006

Total

(1) Investments in

agricultural holdings

5.45

5.45

5.09

5.09

5.09

5.09

5.09

36.35

(2) Investments in improving

the processing and

marketing of agricultural and

fishery products

2.42

2.42

2.3

2.3

2.3

2.3

2.3

16.36

(3) Diversification of rural

activities and promotion of

small business

2.42

2.42

2.3

2.3

2.3

2.3

2.3

16.36

(4) Development and

improving of rural

infrastructure

1.58

1.58

1.58

1.58

1.58

1.58

1.58

11.03

(5) Development of living

environment in rural areas

0

0

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

Total

11.87

11.87

11.27

11.27

11.27

11.27

11.27

80.1

 

Phare 2000+

Program for social integration and teaching of Estonian language for national minorities

3.1

Establishing of system for financial control

1

Project for monitoring of markets

1.7

Appliance of customs tariffs IT system

2.1

Assistance for development of balanced employment services

1.8

Assistance for drug prevention program

0.7

Developing of educational police system

0.4

Project for criminal prevention

0.7

Development of agricultural support system

2

Reconstruction of water and sewage systems in small towns

3.4

Development of economic and human resources in South Estonia

4.4

Development of economic and human resources in East Estonia

2.3

TOTAL

23.7