Estonia, Financial Services, Legislation, Port, Transport

"Transiidikeskus AS, which recently expressed concerns about the contractual penalty, handled goods last year in amounts exceeding the minimum amount set out in the agreement. They are concerned rather about the future and about this year," Port of Tallinn CEO Valdo Kalm told the newspaper.

Kalm said invoices for a contractual penalty for non-fulfilment of the required minimum amount of freight set out in the contracts were sent to ten operators immediately after the end of the calendar year.

The size of the penalty per operator varies from 10,000 euros to more than a million euros and the sum total of such penalties is 2.2 million euros.

Kalm said contractual penalties were necessary because the operators active in the port were working based on long-term agreements and the fees and volumes set out in the agreements had been established considering the ratio between investment and income in the concrete project, in order to make sure that the project is profitable for both Port of Tallinn and the operator.

Port of Tallinn has individual agreements with all terminal operators. A review of the terms of the agreements depend on an individual appraisal of the situation, including with regard to the category of goods, the operator, the investments made and previous agreements, Kalm said.

The operator of general goods and container terminals Transiidikeskus AS said on Tuesday that it would like to renegotiate the minimum amount of goods that a transit operator must handle at the port to avoid being charged a fine by Port of Tallinn.

"For us the situation is becoming critical. Although the flow of goods passing through our terminals has been declining at a slower rate than the whole transit flow of Port of Tallinn, this isn't much consolation. The mutual effect of Russian and Western sanctions has led to a collapse of the purchasing power of end consumers and businesses in Russia. Unless we do something on the level of the state, all of Estonian transit is faced with a severalfold fall," Transiidikeskus CEO Erik Laidvee said.