TALLINN - The situation surrounding passenger traffic to Estonia's western islands reached a climax last week when the government ordered a private ferry operator to continue servicing routes to the islands at conditions set by the state.
Meelis Atonen, minister of economy and communications, ordered Saaremaa Laevakompanii (Saaremaa Shipping) to continue carrying out ferry links with the island for the next two-and-a-half years.
Such a decision, he said, was the only way to guarantee that passenger service would continue unabated. What's more, Atonen said both state and private lawyers confirmed that such a solution is legal.
The heavy-handed decision came after months of negotiations between the state, the Port of Tallinn and Saaremaa Shipping. The state had hoped that the port and the ferry operator could come to a commercial agreement, but they proved unable.
The country's competition authority said ferries might constitute an "essential facility" as defined by the Competition Act, which would lay certain obligations on them, though a final ruling has yet to be made.
The decision sparked outrage among private companies and many promarket forces.
"We regard this as harassment of Estonian shipping which worsens the investment climate and harms our reputation in the world," the Estonian Shipowners Association said.
"Considering the real situation - the small size of the Estonian market and shortage of suitable ships worldwide, we support the continuation of Saaremaa Laevakompanii as operator of the ferry traffic by market rules," the association added.
Several right-wing politicians were even more vociferious in their assessment, with the Pro Patria Union calling on the government to fire Atonen.
"We call on Prime Minister Juhan Parts to sack this incompetent minister and put in his place someone who will take into consideration the interests of the people and the state," a party spokesperson told the Baltic News Service.
Atonen is a member of the Reform Party, a more centrist element in the three-party coalition.
It was unclear how Parts would respond to the crisis, though he hinted last week that he would consider the minister's resignation if the ferry issue was not solved in the interests of Estonians and the state.
Plans for rearranging ferry traffic after Oct. 1, when the previous contract expires, had proven to be fruitless, in the ministry's opinion, as both the public procurement tenders and the Port of Tallinn's efforts to attract ferry owners other than Saaremaa Shipping failed.
On Aug. 10 the port and Saaremaa Shipping concluded a preliminary joint venture agreement with a stock capital of 400 million kroons (25.56 million euros) in which both parties would have equal stakes, but the ministry was unsatisfied.
"On Aug. 10 I gave orders to the chairman of Tallinna Sadam [Port of Tallinn], Mart Tooming, that it is pointless for Tallinna Sadam to continue dealing with the problem, and the Economy and Communications Ministry will itself address the issue," Atonen said.
The Port of Tallinn, for its part, expressed surprise at the decision and even denied having ministerial orders to cease preparations for organizing passenger ferries.
Tooming told the Baltic News Service on Aug. 27 that port management had been in contact with ministerial officials and no such order was mentioned. The port's supervisory council even approved management's work on the ferry line and instructed it to continue on Aug. 23, Tooming said.
Port managers said they would have immediately stopped preparations for ferry traffic if they had received a corresponding order.
In Tooming's opinion, at least two years are needed to prepare a ferry service properly.
Much of the ministry's dissatisfaction was probably due to the state subsidy foreseen in the Port of Tallinn-Saaremaa Shipping joint venture for operating the ferry link, which is higher than the former subsidy because of rising fuel costs and planned yield on investments.
The joint venture plan would have required a state subsidy of 105 million kroons per year, as well as 200 million kroons for its part in the joint venture.
