Miscalculation of the century

Photo: Arved Breidaks

The Police and Border Guard Board (PPA) did not know how to develop a border in 2015. Additional cost of €118 million hit the public like a cold shower as officials were reluctant to cool politicians’ enthusiasm with facts.

Until as recently as a few months ago – officials knew about the 2.5-time price difference in December, even though the information was kept quiet for another two months.

Secretary general of the Ministry of the Interior receives a letter from the head of the PPA on the morning of Thursday last at 7.45 a.m. It reveals that contractor Nordecon estimates the development of the border will cost 2.5 times as much as previously estimated. While the reasoning is objective, the information comes as a shock.

“A cold shower,” Minister of the Interior Andres Anvelt (SDE) admits live on the “Aktuaalne kaamera” evening news program. “This was unexpected,” says PM Jüri Ratas.

The ministers are rather disappointed. The border development has been on the agenda of two governments. Experts have been meeting monthly for three years. That the border would end up costing more than forecast was expected, but not by €118 million. Estonia recently spent that much money on four brand new passenger ferries.

Head of PPA Elmar Vaher says he is prepared to lay the cards on the table. He is speaking for Estonia’s only professional team of border experts. They were given just a few months to calculate how much development of Europe’s most modern boundary line on 338 kilometers would cost in late 2014.

“We knew the landscape very well in terms of guarding the border. But we knew nothing of what lies beneath the surface. Our know-how was clearly insufficient,” Vaher now admits.

Red tape also played a part in the mess. The matter was hurried as interior minister at the time Hanno Pevkur (Reform) had to have the estimate on his desk by February 2015. Only then could it still be included in the state budget strategy that ensures funding for the next four years.

The PPA, that had so far been in charge of cutting the grass and a border strip with a few poles sticking out of it, was expected to introduce a whole new level of quality. “The estimate was based on what we knew ourselves and managed to ask experts about in a month,” Vaher recalls. The PPA talked to transmission network operator Elering, the road administration, private companies. The initial estimate sent to Pevkur in fall of 2014 was just €20 million. It had grown to €79 million by February 2015. The exact cost was to become clear upon completion of design documentation.

Construction became bogged down almost immediately. The interior ministry had trouble securing the land as owners tended to contest offers. Only the marking of the lake border was completed in time.

It is all the more peculiar that Hanno Pevkur kept telling the media the border would be finished as a present for Estonia’s 100th anniversary toward the end of 2018 up until the end of his term in October 2016. Pevkur now says he proceeded based on information he got from the brass at PPA.

PPA experts had to see politicians were painting an overly optimistic picture. A year after Pevkur left office, head of the Southern Border Guard Bureau Tamar Tamm said that he believes no one has

promised to complete the development by 2018. “It’s possible this was a very-very preliminary plan,” he added. “It was a little too optimistic to begin with,” Tamm said.

Vaher does not agree that things were kept from the ministry. “The executive group knew it would be drawn out all along,” he maintains.

The design documentation was to blame. Vaher claims it is the only mistake the PPA made. “We promised to have the documentation ready by 2015, but we were too optimistic. When you create expectations, you must take responsibility. That’s how it is.”

The documentation was completed two years later, in December of last year. The delay was mainly caused by geology and geodesy analyses and a number of additional surveys. It turned out that the border was swamp for 101 kilometers where the ground would not support as much weight as estimated. Vaher knew the development would cost a lot more than planned by late summer and was given the exact sum on January 30.

“We should have done better. However, it is the first time we are building something like that, and let’s be honest, the PPA is not a contractor,” Vaher says.

Two loose ends

The incident has put the state in a delicate position in two ways. Minister of the Interior Andres Anvelt said on January 19 that he wants Vaher to stay on as PPA director. Vaher’s subordinates knew the border project would end up costing more at the time but hadn’t told their boss yet. Anvelt has now ordered an internal audit at PPA and said the decision of whether Vaher will be allowed to continue has been put on ice.

Vaher says that his people did not disclose the additional cost because the documentation had to be verified and complemented, and that took time. “I see no difference in whether the announcement came in December or late January,” the police chief says.

The other question is why it took the PPA expert group nearly three years to conclude that a boundary line of ten meters would not be wide enough. The interior minister has now proposed amending the law and buying even more land from already upset landowners.

Vaher said the conviction came 18 months ago and became evident on test sections that required a stronger foundation and service access. “We would have been shooting even more from the hip had we said it is necessary in 2015. I believe it would have been even more dishonest toward the state.”

Solution in sight

Does the steep border development price advance mean politicians must give up their expensive election promises – the pension hike for instance?

Surprisingly, it does not. The state budget strategy prescribed annual funding of €20 million for the border. Delays meant the PPA only managed to spend €14 million by December of 2017, the rest of the money is still there, and construction can continue.

A lot more money is needed, but here the interior ministry is betting on a few lifelines. Dragging the development out over four years would require just €11 million in additional funding a year. Surveillance equipment would require another €17 million a year, but that can be done later.

EU presidency Bulgaria is working on a proposal to introduce a level standard for guarding the EU’s eastern border. If the initiative passes, and requirements put together in Estonia are adopted on the European level, Estonia could apply for support from the EU budget to finish construction of the border.

Head of the border guard policy department of the ministry Janek Mägi says the state is in no hurry to relax the quality requirement for the border despite the new price. The goal is a border covered by surveillance equipment where every violation is detected, responded to, and violators caught.