Estonia, Markets and Companies, Port, Transport

The estimate suggests that the penalties payable by the shipbuilders in Turkey and Poland could amount to over 4 mln euros.

Adding also the price of the substitute ferry Regula, the company's expenses would total already 12.6 mln euros, the newspaper said citing a memo submitted to the state owned port company's supervisory board in August.

Port of Tallinn has refused comment, saying that neither the size of the penalties nor the cost of renting substitute boats will be made public.

The agreement concluded with shipowner Olav Miil on the charter of the ferry Hiiumaa for one year takes 6.4 mln euros from the budget of Port of Tallinn, Eesti Paevaleht said.

The charter price agreed for the ferry St. Ola belonging to Saaremaa Laevakompanii is 14,900 euros a day plus 150,000 euros just for the option to charter the ferry for a second month. Hence the charter of the ferry for one month will cost 461,900 euros and for two months 1.1 mln euros. The charter price of the small ferry Harilaid is 6,000 euros a day and it has been agreed to charter the ferry for one month for 186,000 euros.

The Ministry of Economic Affairs and Communications meanwhile is entitled to fine TS Laevad, winner of a public procurement tender for a ten-year contract to operate subsidized ferry services to the large western islands, up to five mln euros if the state-owned company fails completely to meet the terms of the tender.

The ministry has so far refused to offer even a rough estimate of the size of the fine. The cost estimate of 8.6 mln euros includes one mln euros as a potential fine.

The fines that the shipbuilders must pay for being unable to deliver the vessels on time are supposed to make up for the extra costs. For the ferry Leiger being completed at a shipyard in Turkey a penalty of 12,500 euros a day is being counted since August. For Tiiu, the second ferry built in Turkey, a penalty period will start on Sept. 15.

The Polish shipyard is paying 37,500 euros a day for Toll, the ferry they were supposed to deliver first, since last week. The deadline of delivery of Piret, the second ferry built at the Remontowa shipyard in Poland, is Dec. 1 and if that deadline cannot be met a penalty count of 37,500 euros a day will start on Dec. 7. It is estimated at this point that Piret will enter service in January 2017.

Under the agreement, the sum total of the penalty must not exceed 8 percent of the price of the vessel. However, in that case the danger exists that the builder will be left with the boat on their hands. Sources have told Eesti Paevaleht this is one of the biggest fears for the Polish shipyard, since they already have on their hands three vessels built for a Canadian partner.