AS Tallinna Vesi has written to the Minister of Economy and Communications requesting an investigation into tariff setting in Estonia
On 10th of September 2012 AS Tallinna Vesi submitted a detailed letter to Mr. Juhan Parts, the Minister of Economy and Communications, requesting that the Minister conduct a detailed and public enquiry into utility tariff setting by the Competition Authority, and the conduct of Mr. Märt Ots, the Head of the Competition Authority, as the individual responsible for setting AS Tallinna Vesi’s tariffs.
AS Tallinna Vesi and its shareholders have been forced to defend the international privatisation contract, which was carried out with the full knowledge and support of the Estonian Government, in the Estonian courts. This legal dispute has arisen because the Competition Authority has alleged that the international privatisation contract was not in accordance with Estonian law neither at the time of the privatisation nor today. In his letter to shareholders dated 25th of June 2012, the Minister of Economy and Communications also supported this position.
The Competition Authority’s reasoning for making such an allegation was that the “custom and practice” for economic regulation in all other sectors in Estonia had always used a different methodology compared to that agreed in AS Tallinna Vesi’s international privatisation contract, and as such AS Tallinna Vesi and its investors could not have any legitimate expectations that the international privatisation contract should be honoured.
In the past few weeks new publicly available information has come to light that casts significant doubt on the accuracy of the allegations of “custom and practice” regulation made by the Competition Authority. As a consequence of this new information AS Tallinna Vesi expects the Minister to carry out a further detailed investigation into regulation and the correctness of the Competition Authority’s statements against AS Tallinna Vesi and its shareholders, and in particular to for the Minister to review whether or not the Competition Authority has:
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knowingly used inaccurate and contradictory statements and actions in allowing different regulatory methodologies to be used for local investors, whilst in the case of AS Tallinna Vesi all the terms and conditions of the international privatisation were disallowed;
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knowingly forced AS Tallinna Vesi and its shareholders into a defence of the international privatisation contract based on a set of completely inaccurate accusations;
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knowingly misled the Estonian Courts and the EU Commission over the status of economic regulation in Estonia.
A full copy of the text of the letter and annex can be found as an attachment to current notice.
In accordance with Estonian regulations the Minister has up to 30 days to respond to AS Tallinna Vesi’s letter and questions. AS Tallinna Vesi will keep all its shareholders updated of developments on this and other matters related to the privatisation contract dispute via the Tallinn Stock Exchange Website.
Ian John Alexander Plenderleith
Chairman of the Management Board Mariliis Mia Topp
Head of Communications
AS Tallinna Vesi
mariliis.topp@tvesi.ee
62 62 275
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