Great expectations, tiny benefits – Decision-making in the privatization of Tallinn water

In 2001 the City of Tallinn sold 50.4 percent of the shares in its water services company to international investors in order to secure investment funds. In the following years, the new owners took considerable amounts of money out of the company, while practically all investments were financed using a loan from the European Bank of Reconstruction and Development (EBRD). Tariffs were also raised. To prevent such outcomes, the City Council should have been more careful in the preparation of the tender documents and the Services Agreement. The case clearly demonstrates that public decision-making should be based on safeguarding the interests of citizens, tax-payers, and water services users. This includes securing necessary investments for the construction and rehabilitation of critical infrastructure.