Estonian inflation could obstruct EU projects

  • 2006-10-18
  • Staff and wire reports
TALLINN - Skyrocketing prices in Estonia's construction sector could hinder environmental and transport projects which have the support of EU subsidies, according to the Finance Ministry.

"Many projects have increased in cost due to higher construction prices, and therefore could become a problem," Renaldo Mandmets of the Finance Ministry said. "Cohesion Fund resources for the current period have already been planned, and Estonia will need to find the extra money." The EU cohesion fund supports a large range of projects in Estonia. There are 24 currently being funded and another 24 are underway. Of these, 13 are carried out in the environmental sector and six in the transport sector.

The biggest environmental projects underway are the Kohtla-Jarve area waste handling system, a water management project in the Parnu River basin, the reconstruction and extension of water and sewerage systems in the Matsalu basin, and river management projects in the Emajogi and Vohandu rivers.
The biggest transport projects include the reconstruction of the Maardu-Valgejoe section of the Tallinn-Narva highway, repair of the Johvi-Tartu-Valga highway, and reconstruction at the Tallinn Airport.

Inflation has also caused problems with planned projects in Latvia. Citing a 16.6 percent rise in construction costs in 2005, the consortium of construction companies building Dienvidu Tilts, a bridge across the Daugava River, has turned to the city for more money.