OREANDA-NEWS. January 28, 2011. In 2010 AS Tallinna Vesi’s operating profit from water and wastewater related activities decreased by 10.1 per cent to 377.9 million kroons (24.15 million euros) compared to 2009. Profits from other activities increased by 25.2 per cent to 51.8 million kroons (3.31 million euros).

AS Tallinna Vesi’s CEO Ian Plenderleith said that last year’s financial results were severely impacted by sales volume decreases in Tallinn and higher pollution tax and electricity costs.. „Whilst the sales revenue decrease in Tallinn was compensated by a volume increase in outside service areas and the first full year implementation of the Maardu contract, our costs were severley impacted by  the exceptional  weather conditions,  increased pollution load and a surge in electricity costs that resulted from the opening of the electricity market,“ commented Plenderleith. Additionally the reduction of water and wastewater tariffs by 0.9 per cent January 2010 also contributed to the drop in sales revenues in Tallinn.

„We are however pleased that while dealing with difficult challenges, we have managed to ensure the best ever drinking water quality for the residents of the city,“ added Plenderleith. 99.59 per cent of water samples taken from the taps of the customers were compliant with quality requirements, exceeding the 95 per cent requirement established by law and the Services Agreement.

AS Tallinna Vesi invested 274.3 million kroons (17.53 million euros) into reconstruction and construction of new fixed assets in 2010. The main new projects were the construction of the additional treatment stage at Paljassaare wastewater treatment plant and the completion of the network extension program. AS Tallinna Vesi laid 61,9 kilometres of new pipes in 2010 and gave more than 1100 families the opportunity to connect to the public water and wastewater network.

In the third quarter of the year, the Anti-Monopoly Bill was passed and became effective on November 1st, transferring  the water and wastewater tariff approval process from the City of Tallinn to the Competition Authority. On November 9th the Company submitted a five year tariff application to the Competiton Authority, within which requesting a 3.5% tariff increase in 2011. This application was made as per the terms  contractually agreed in the Services Agreement and in accordance with best practice regulation for privatized utilities - based on the principles used by Ofwat in the UK.

„At this point in time the Company is unable to say what the tariffs will be for 2011 as it is unclear how the Competition Authority intends to analyze and proceed with the application, and whether the Competition Authority will consider the terms and conditions of the privatisation contract and Services Agreement,“ noted Plenderleith.