Port of Tallinn execs suspected of wasting 2.4 mln euros

16.08.2012, 13:28

State Audit Office claims that state-owned Port of Tallinn has misused almost 2.4 million euros in public funds in connection with the construction of a container terminal in Muuga, writes Äripäev.

According to auditors, executives of Port of Tallinn may have granted a construction company KMG Ehitus additional funding without justification.

The company may also have submitted false data to the contracting authority.

The suspicion is based on a contract that Port of Tallinn signed back in 2008 with KMG Ehitus on increasing the value of a construction contract.

After signing the initial contract, Port of Tallinn as contracting authority then decided to increase the value of the contract by 2.4 million euros, saying that additional reinforcement works were necessary because the foundation of the container terminal was on weaker ground than expected.

The owner of KMG Ehitus was Rotermann Grupp which in turn belongs to one of Estonia’s richest businessmen Urmas Sõõrumaa.

Sõõrumaa was not available for comment yesterday.

Executives of the port authority have denied any wrongdoing.

“No cent has been wrongfully used,” said Ain Kaljurand, chairman of Port of Tallinn.

He added that the company had commissioned a legal opinion which stated that if the construction contract had been kept unchanged, it would have eroded the competitive ability of the port.

Kaljurand also denied that the suspicion could be another attempt to get rid of him.

Last year when his employment contract term ran out, some members of the supervisory board tried to replace him with a new CEO, but failed.

“Based on a legal opinion, the management has duly complied with all requirements of the public procurement act,” said Neinar Seli, chairman of the supervisory board of Port of Tallinn.

According to Port of Tallinn, the procurement contracts in question and their changes were approved also by the ministry of economic affairs and the Maritime Agency.

SAO has already asked the public prosecutor’s office to investigate whether the wasteful business practices of Port of Tallinn have been criminal.

The prosecutor’s office said they received the application only recently and have not decided yet whether to open a criminal procedure.

Minister: too early to say if heads will roll
Minister of economic affairs Juhan Parts who supervises Port of Tallinn says that since SAO has not yet published its report, it was too early to say whether executives of Port of Tallinn had done anything wrong.

“I have not seen this report myself so you know obviously more than I do. I expect that Port of Tallinn has something to say about it. You need to be consistent in such matters. At present it’s still far too early to say anything,” said Parts, adding: “If it’s true, it’s very serious.”

When asked whether the management of Port of Tallinn should resign if the allegations are proven, Parts said that there should be a response to such hard suspicions.

“But it is too early to say anything to the readers of Äripäev,” he said.