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Haapsalu looses grant finance due to tender violation

  • 2013-01-29

HAAPSALU - Enterprise Estonia is withholding 106,851 euros from Estonian town of Haapsalu after identifying violations in a public procurement for the renovation of the town's cultural center, Estonian national broadcasting corporation ERR reported referring to Laane Elu.

The violations involved retroactive changes to the contract with the builder, Skanska, in which the repayment interest rate was lowered from 20 to 10 percent and the wording determining the project's deadline was changed from "at the latest" to "approximately."

The changes were made due to the town’s worsening financial situation, as Enterprise Estonia noted.

Haapsalu's cultural center, originally built in 1975, was renovated between 2008 and 2011, costing four million euros.

Haapsalu Mayor Urmas Sukles noted that the law permits that up to 25 percent of the grant can be recovered for such a violation, but Enterprise Estonia found that to be too burdensome for the town and reduced the claim to five percent.