OREANDA-NEWS. May 05, 2011. The Estonian Competition Authority has rejected AS Tallinna Vesi’s 2011 tariff application that was submitted in November 2010. The Company shall dispute the decision of the Estonian authorities.

The Competition Authority claims that the contractual tariff increase can not be approved due to restrictions stemming from the adoption of the Anti-Monopoly Bill. AS Tallinna Vesi’s CEO Ian Plenderleith said that the Competition Authority’s rejection of the company’s 2011 tariff application is a clear violation of the terms and conditions of the privatization agreement, entered into in good faith by the Company and its investors in 2001.

„This is in spite of the fact that AS Tallinna Vesi and its owners have fulfilled all the significant improvements in water services required under the privatisation agreements, and to date have not yet made a return on the 85 million Euro investment made into Estonia in 2001. All of which makes a unilateral breach of the contract half-way through the contract period totally unacceptable and forces the Company to take necessary steps to protect the rights of its investors,“ said Plenderleith.

AS Tallinna Vesi made the tariff application in accordance with the contract and the requirements of the Public Water and Sewerage Act. In order to ensure a balanced discussion and to give full respect for the due process, the Company has had its returns independently verified by Oxera and confirmed that the regulatory principles used by the Company accord with the World Bank guidelines.

AS Tallinna Vesi lodged a complaint to the European Commission on December 10th, 2010 regarding the adoption of the Anti-Monopoly Bill and its likely implementation by the Estonian authorities. These measures have unilaterally altered the terms of AS Tallinna Vesi's privatization and are in breach of EU fundamental freedoms of establishment and movement of capital.

“We believe that although the Republic of Estonia was not party to the contract, the Estonian authorities carry an overall responsibility for ensuring that the legislation accords with the European framework and respects fundamental EU freedoms,” stressed Plenderleith. The deadline for the Estonian authorities to respond to the Request for Information issued by the European Commission was according to the Company’s knowledge on May 3rd.