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Consolidation of Estonia's state transport companies would bring EUR 15 mln extra revenue

Consolidation of the enterprises would allow to sell the Estonian goods transport corridor in a more competitive manner, the ministry says in comments added to its proposal. It would also allow to operate companies in a more cost-effective manner and to exercise better control. Bringing the enterprises under a single holding company would allow to attract borrowed capital on more favorable terms and better organize joint procurements. In addition, it will allow to save on operating costs and cut overlapping jobs.

In accordance with the plan, a holding company would be established from six months to one year after the order of the government that will become the holding company for Port of Tallinn, the operator of regional ports AS Saarte Liinid, Tallinn Airport, a new maritime services company to be established on the basis of the pilotage company AS Eesti Loots, and a railway holding company to bring together AS Eesti Raudtee and AS EVR Cargo.

The pilotage services of AS Eesti Loots will be merged with the Maritime Administration's department for the organization of ship traffic into a company that would take over the vessels of the Maritime Administration operated on a commercial basis.

The stock capital of the holding company would be the consolidated sum total of the stock capitals of the companies to be brought under the holding company. As at the end of 2015, the owners' equity of the companies to be consolidated made up 641 million euros and their operating profit before depreciation was 38 million euros. The estimated annual operating cost of the holding company would be 860,000 euros.

The holding company would be led by the chairman of the management board and the management would include a finance director, a chief accountant and one or two analysts. The team will be supported by one assistant. The chairman of the management board will be appointed to office by a seven-strong supervisory board. The holding company in its turn will appoint members to the supervisory boards of the subsidiaries. The supervisory boards of the subsidiaries will be normally made up of 4–5 members.

For more effective control an internal audit function will be established in the holding company.

The plan to establish a holding company for transport infrastructure companies will be discussed at the Cabinet sitting on Thursday, government spokesperson Kateriin Pajumagi told BNS.

Previously an expert group convened by the finance minister found that Estonia should set up an independent committee to find members to supervisory boards of state-owned companies and which would appoint competent people.

The expert group proposed setting up a committee of independent experts that appoints members of supervisory boards to guarantee professional leadership of companies. In addition, the committee should mostly consist of experts from the private sector who have wide leadership experience.

The expert group also suggested setting up a governing unit, which clearly defines the expectations of the owner for state-owned companies and assesses results.

(Source: http://www.baltic-course.com/eng/transport/?doc=121580)

02.06.2016

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