Hard race for real estate funding

National Library building.

PHOTO: Erik Prozes

As the autumn state budget talks are coming up, the government decided to reduce its September work load and settle the state real instate investment plans this week.

Minister of Education and Research Mailis Reps said only last week that the Tallinn Music and Ballet School, which was left without funding in spring, will receive its money injection in September, but he decision is likely to be made at the August 15 government session. It will also announce the others who will share the 50–60 million euro amount of state real estate investments for 2020.

Although a large share of smaller investments were agreed upon on Monday, the decision of major objects was left for Thursday.

As far as Postimees is aware, at least four major investments will be discussed and will probably receive their allocations.

The early autumn plan is supposed to tie up the loose ends of the spring debates and also allocate the sums due some objects, which have been waiting for it for years. Details were attempted to be kept secret.

“Before the decision has been made by the cabinet in the presence of all ministers, I regretfully cannot disclose any figures or objects – this is the agreement;” said Jaak Aab, Minister of Public Administration on Wednesday.

The investments will be based on specific needs: lack of space or the physical state of a building. The coalition’s policy decisions will determine the future of major projects: some will be built earlier and others will be postponed. On the other hand, the future of some buildings will remain open, for example the House of the Nobility in Toompea.

According to Postimees, a major issue will be the construction of the new TV building of the Estonian national broadcasting firm. Increasing its funding is considered unlikely, but rumors claim that an idea has been advanced to consider leasing equipment instead of purchasing it. Further debates will concern the overhaul of the National Library building and moving the Tallinn units of the National Archive, for example the film archive, to the National Library building.

The financing of the design of the Tallinn Music and Ballet School, which was left without funding in spring, is expected to see the green light. Postimees has learned that all these projects are highly likely to receive government funding, but it remains open whether it will happen in 2020.

The most open – but not about his own ministry’s plans – has so far been Minister of Finance Martin Helme. “As for investments, contrary to the rumors spread in the media, we shall finance in principle a plan to repair all border guard stations and the Police and Border Guard Board combined buildings within the next three or four years,” he announced yesterday. He did not add any details.

The drafting of the real estate investments package cannot ignore other investments needing large sums. For example, the construction of the state border, which has become significantly more costly. Another issue is the reconstruction of the Internal Security Service working space, which would require over 50 million.

Thus the competition between real estate objects for investment sums is quite intense. The Ministry of the Environment new building, the construction of which has been promised to be started this year, may go without financing. It is also known that the repair of the parliament building has not been included in this year’s list of state investments.

In Aab’s opinion, the amount of next year’s state real estate investments will be 50–60 million euros. This will be some ten million less than was planned for this year. And there is little margin for sums not yet allocated. “Now it is about how much will be used for some sites, how much will remain unused, whether there will be other interesting ideas…” Aab speculated.

In his words, the share of unallocated money in the state real estate investments in 2020 and 2021 is relatively small – it is planned to complete larger buildings in that time. Accordingly, the funding in 2023–2024 will be greater. How much, Aab did not reveal. “Unfortunately we cannot discuss any figures before we have decided the sites; only then we can talk about the available sums,” he said.

How much the construction will eventually cost will become known over the years, but the cabinet has to approve the predictable amounts today. “These figures keep moving all the time. Recently unfortunately upwards.” Aab cited as an example the construction of the sports facility in Kääriku, which was allocated an extra 2.6 million euros this spring.

“This is a yearly process: first they make the decision to design, but the figures will be determined during the designing process, then it will be revised again and we shall see how much above of below the base figure it goes;” Aab said.