IDU-VIRUMAA - It's a dull, rainy morning in the northeast Estonian town of Pussi. It's a depressed and a depressing place. Outside the local shop, two teenagers eye me suspiciously. It's not that strangers are unwelcome; it's just that they're virtually unknown here.
Pussi boasts a supermarket, a cafe and a liquor store. There used to be a bar, but that seems to have burnt down. An unfinished school - abandoned at the end of Soviet times - remains in a similarly derelict condition.
In 1989, 2,400 people lived here. Since then the town has witnessed a population drop of 25 percent, and has managed to run up a debt of 20 million kroons (1.3 million euros).
"I went to high school in the neighboring town of Kivioli," says Teet Kuusmik, chairman of the Town Council. "There were 30 students in my class. Only three or four of them have stayed around here."
At the end of the Soviet period, the town's largest employer was the chipboard-manufacturer Repo Vabrikud. It once employed 1,400 townspeople. Today, it employs just 280 people. Repo used to provide the central heating for the town by piping water heated by its industrial processes into local homes. But in 1996 the council decided to end this mutually beneficial arrangement and borrow money to build its own boilerhouse, at a cost of 6 million kroons.
"The relationship between Repo Vabrikud and the town council wasn't good," Kuusmik explains. "In the winter there was a threat that Repo could switch off the heat. The decision for the town to buy its own boilerhouse wasn't economic but political."
The council then sold its heating at a lower price than it cost to produce. Even so, only a quarter of the residents paid their heating bills in full. At the same time people were leaving town in search of work. "As people moved away, the prices of apartments went down," says Perit Kuup, the local administration's chief accountant.
"In 2002 the price of an apartment was actually zero," says Kuusmik. "The council did nothing to solve the problems. They didn't even meet for about six months. There were three mayors and four chief accountants in three years."
Interest and penalties pushed the town's debt up to nearly 17 million kroons and it also owed more than 3 million kroons for its boilerhouse fuel.
When Town Council elections were held in 2002 only one candidate stood for the 13-seat council. They tried holding another election - this time two candidates stood. On the third occasion, however, a group of local entrepreneurs managed to muster two dozen candidates and a proper poll was held.
Since then, things have been looking up in Pussi. The boilerhouse was sold off to a Scandinavian company for a grand total of 1.5 million kroons - and the town returned to Repo for its central heating. The council has taken residents to court for their unpaid bills, and has started to recoup its losses. The government is also now supporting a plan for the council to buy 14 million kroons of its debt for a mere 6.5 million kroons.
Pussi is determined to get back up on top. It's trying to attract new businesses to a planned industrial park. Kuusmik points out that, while the cost of land in Tallinn's up to 1,000 kroons per square meter, the price in Pussi is about 10 kroons.
Pussi has also secured funding for the renovation of its cultural center, a venue for sporting and social events. The building's late-Stalinist, Palladian grandeur is slightly at odds with the run-down architecture of the rest of the town. Pussi has the uncommon distinction of being a place whose youth club is significantly more luxurious than its council offices. Behind the cultural center lies an empty plot of land where the boilerhouse once stood, a missing monument to the folly of the former administration. Behind that stands an 80-meter mountain of ash, the detritus of 30 years of chipboard production. Pussi may not quite be on the slagheap of history, but it's close.
Yet even this eyesore might one day be of use. The neighboring town of Kivioli has a similar man-made mountain that has been used for motorbike events, and is being considered as a venue for winter sports.
You've got to admire the spirit and stoical optimism of the locals here. It seems that hope springs eternal in Pussi. "I've stayed because the town has problems," says Perit Kupp. "It's interesting and it's a challenge."
I'm surprised to say I really rather enjoyed the few hours I spent in Pussi. It's an historic relic, a dirty gem from a bygone age, an unparalleled example of administrative incompetence - and yet it's sustained by a set of hopes that look like they might one day be realized. It's an extraordinary place, a place with hidden charms. There's nothing else quite like Pussi in the world.
"There were 30 students in my class. Only three or four of them have stayed around here."
Teet Kuusmik, chairman of the Pussi Town Council.