TALLINN - Estonia is facing a billion-kroon (64 million euro) fine from the European Commission for failing to fix sewerage systems in rural areas.
Under its EU ascension agreement, Estonia was obliged to fix sewerage and waste water treatment in small towns by the end of 2010.
However an auditor's report has found it will be impossible to fix or build facilities by the deadline, putting Estonia at risk of punishment from Brussels.
Estonia is still reeling after being slapped with a 712.7 million kroon (45.6 million euros) fine for stockpiling sugar in breach of its EU ascension pledge.
The potential punishment for its wastewater problem could be equally painful. The European Commission has warned the Ministry of the Environment it could be fined 20,000 euros each day until facilities are brought up to standard 's with repairs and installations still running years behind schedule.
In a recent report, the National Audit Office of Estonia said the nation was "unable to ensure sufficient wastewater treatment in all settlements by 2010, which may result in infringement proceedings by the European Union."
The audit office found a funding shortfall of 6 billion kroons in the government's wastewater management budget. It also revealed problems with local governments that have been unable to fix or build systems in their areas. Skyrocketing building costs and Estonia's construction boom have added to the delays and budget blowouts.
The first EU deadline will hit at the end of 2009, when Estonia is due to have fixed sewage facilities in all towns with a population of over 10,000. A second deadline will be breached a year later, when systems in all communities larger than 2,000 are due to be fixed.
Sewage systems in Estonia were of particular interest to the EU because of the nation's geography, which leaves its water sources extremely sensitive to pollution. As much as 63 percent of Estonia's surface water is deemed at risk for pollution, the auditor's report said.
"Waste water is leaking to the ground due to depreciated sewerage pipelines. The exposure to untreated waste water may cause the spread of diseases among the population," the report said.
A spokeswoman for the Ministry of Environment said steps were already being taken to meet the auditor's recommendations.
"The Minister is undoubtedly concerned about potential fines, and the Ministry of the Environment will do everything within its power to avoid them being issued," the government spokeswoman said.