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HARMONIZED MARKET

ESTONIA

KUNO MÄNNIK
DIRECTOR OF TARTU ROAD OFFICE
KOIT TSEFELS
DEPUTY DIRECTOR OF ESTONIAN ROAD ADMINISTRATION
Allocations From The Road Budget
Ordinary maintenance
Bridge reconstruction 25%
and repairs
2% Design
3%

Other costs
11%

Construction
and reconst-
ruction
8%
Rehabiltation and
repairs
51%
Competitive Bidding And Own Forces

Bidding Own forces

6,2 7,8
15,0 15,3
32,9

85,0 100,0 93,8 92,2 84,7 67,1

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Domestic Value Treshholds For Public
Procurement:
(net of value added tax)

Purchasing of goods or contracting for services
~ 20 000 EUR or more

Contracting for construction works
~125 000 EUR or more
Register Of Public Procurements

In the form of computer database and published on the
web site of register:

http://register.rha.gov.ee/

Only in Estonian!
International Value Tresholds For Public
Procurement
(in case of state authorithy)

Purchasing of goods or contracting for services
130 000 SDR

Contracting for construction works
5 000 000 SDR
Contractors On The Estonian Road Market
Examples

Via Baltica: Rehabilitation of Ikla-Tallinn-Narva Road I

Total 120,6 km
Contractor/ Consultant and contract price

Works Supervision

Estonian companies Finnroad OY (Finland)
Technical Center of Estonian
Roads Ltd (Estonia)
800 000 €
Contractors On The Estonian Road Market
Examples

E 20 Tallinn-Narva Road, Reconstruction of Maardu-Valgejõe

Total 62,7 km

Contractor/ Consultant and contract price

Works Supervision

Skanska Tekra OY Nicholas
(Finland) O’Dwyer&Company Ltd
21 400 000 € (Ireland)
iproplan
Planungsgesellschaft mbH
(Germany)
AS Telora-E (Estonia)
AS Taalri Varahaldus (Estonia)
640 000 €
Contractors On The Estonian Road Market
Examples

Via Baltica: Väo-Maardu design No. 1
Consultant and contract price

COWI A/S (Denmark)
EA Reng AS (Estonia)
500 000 €

Technical Assistance for Reconstruction of Tallinn Ringroad and Tallinn-Paldiski Road

Consultant and contract price

WSP International AB
(Sweden)
WSP Sverige AB (Sweden)
K-Projekt AS (Estonia)
1 800 000 €
Features Of The Estonian Road Work Market
• rather small, but offering attractive works with financing from EU
• opened
• regulated with necessary legal acts, but needs improvements
• reliable banking and financing
• in works financed from the Eurpopean funds- speaking the
English language is compulsory
• in minor works understanding the Estonian language recommendable
• in big construction work Estonian contractors perform as a concern
of 3-4 companies to compete with competitors
• bigger Estonian road construction companies have daugther-
firms splitted territorially and dealing mainly with maintenance.
Depending on the location of road construction site their recourses
(experienced labour, machienery, gravel-pits) can be used in the
form of subcontract.
Annual Volum e of Road Works
in Tartu Regional Road Office
8,3 MEUR
Mitigation of Traffic
In-House Maintenance "Black Spots" 0,46
and Gravel Repairs New Pavement on
2,05 Gravel Roads 1,53

Facilities Repairs 0,15

Bridge Repairs 0,37

Gravel Road Repairs
Ordinary Maintenance
0,22
1,60

Rehabilitation of Paved
Roads 1,92
Road Works on the Market Tendered by Tartu Regional
Road Office in 2005

Ordinary Maintenance

Rehabilitation of Paved Roads

Gravel Road Repairs

Bridge Repairs

Facilities Repairs

New Pavem ent on Gravel Roads

Mitigation of Traffic "Black Spots"

0 0,5 1 1,5 2 2,5 3 3,5 4
MEUR

On the Market In-House
OBSTACLES
ON THE ROAD WORK MARKET

1. Public Procurement Act needs renewals.

Problems:
• Low price prevails too much, quality criteria
not considered sufficiently
• Time-consuming settlement of protests by arbitration
• Urgent seasonal road works should be procured faster
2.Big road works financed from European Cohesion Fund
and European Regional Development Fund mostly engage
the capacity of domestic contractors and often minor
works cannot be accomplished on time

3.Shortage of road designers

4.Wages in Estonia are still much lower than in developed
countries and therefore foreign contractors with there own
labour have difficulties in competition for cheaper bidding
Developments On The Market

• Draft of the renewed Act for the Public Procurement is ready

• New competitors from small- size firms (designers, consultants,
technical supervisors) are coming

• Regular annual increase of wages 5-10% in Estonia decreases the
advantages of domestic contractors in comparison with foreigners

• Preparation of big road and bridge works (Tallinn ring road, Tartu
ring road Saaremaa fixed link) possibly attract a foreign contactor
more than earlier.
THANK YOU FOR YOUR ATTENTION!