TOP ESTONIAN ENTERPRISES

Photo: Rene Suurkaev
How is Merko seeing the Estonian construction
market? Is it worried or optimistic?
Let’s say that it goes as it goes for the whale in
the ocean – you guttle plankton and let water
out through the teeth. Recently it can be seen
that public procurements are really small. This
is a new situation, as in 2006 and 2007 we did
not manage to participate in small procurements,
then today we congratulate each other
already in case of winning the procurement of
two million kroons. Thus we increase sales object
by object. At the same time the competition
in road construction has become really tough.
This market has been closed for years, part of
the road constructors are used to keep this to
themselves. And think – new others are coming
who would like to do something in road construction.
There is nothing to do – this is almost
an only place where money flows. The road construction
procurement of 100 million kroons is
today a really major thing.
Which were the most outstanding
projects of last year?
Our key object was Viru Prison, I believe this is
our largest object of general construction made
in Estonia. There has not been much talk about
it, but we also finished in Lithuania the largest
object of Merko history which is located in the
city centre of Vilnius and the volume of this contract
was 1.2 billion kroons. Last year we built
Tallink’s offices, the office building Delta Plaza
is also the “child“ of our last year. In Pärnu we
fulfilled network procurements for 170 million
kroons – thus the sales has been created. The
major procurements received last year feed us
also this year: Ämari airport, the centre of Solaris
will be completed by autumn. The problem
is that much work has been done and we see
that we have managed clearly more than we
have won from the new procurements. We
have won relatively many pipe procurements
financed through the Environmental Investment
Centre. We have participated a lot in the procurements
of Eesti Energia and built quite many
substations.
What is the role of the state
in your opinion?
If the state, today as practically the only client,
cuts the expenses there is a risk that companies
are put to the stop. What has remained undone?
For example, there is unused money on
the accounts of the companies and private persons.
This money could be inserted to the entrepreneurship.
Actually the PPP (private public
partnership) projects could be organised or
such procurements where part of the money is
paid to the entrepreneur by instalment. If 85%
of the money is coming from Europe, then the
state could take this remaining 15% from the
employee – provided that the employee gets its
15% for example within ten years and this
money will be calculated into the price of the
procurement. I have presented this idea here
and there, but up to now such procurements
have not yet been organised...
What is the future vision of Merko?
Today we dare not to look at the direction of
Russia, the Estonian-Russian relations and the
surrounding political background is such which
is not supporting it. We would not still go to
Minsk, the situation there is still unstable. It
would be real to have a look in Kiev. The market
of the Baltic countries is clearly too small and
much has been done here with the previous period.
Such rise as we have seen will no more
come. While viewing Estonia it is clear that there
are enough offices, hotels and trade centres. We
clearly miss some prisons and the schoolhouses
could be also repaired. Only dwellings
can be built – these are needed all the time. We
hope that the children of the song revolution will
become adults within the next five years and
want to purchase their own living place. This
could be our life buoy, we see nothing else at
the local market. We plan to build new apartments
already this year. We have made one
strategical decision – we purchase the road
maintenance company Vooremaa teed from the
state. On the basis of Tallinna Teed which is our
subsidiary, we have mainly focused on Northern
Estonia in road construction. Now we try to
develop Vooremaa Teed into a serious infrastructure
company and on the basis of that start
to cover the direction of South Estonia.
But how to survive the current time?
This year the construction volumes fall 30-40%
and when at top times 82000 constructors were
working in Estonia, then now it is calculated that
maybe only 40 000 will remain by the end of the
year. We have more construction capacity and
today we could build much.. If the market rises
at one moment and the resting builders are far
away, having found the new challenges, it is not
possible to respond to the rise and fulfil the
major volumes. We are comfortable with the
current situation and we see many possibilities,
we have different cooperation offers. The current
period is very interesting and we think
about the foreign markets. We have not been
able to try ourselves in civil engineering in Latvia
and Lithuania to a necessary extent and in the
future we take more part in the public procurements
there. The Latvians soon start to build
the prisons and this would suit us very well. This
what we have learned in the construction of Viru
Prison based on the test-mistake method is a
significant know-how base. I remember very
well how the riot police got the task to test how
strong are the doors of the cell. They broke several
of these before we learned about how
strong the door should be. Next time we need
no assistance of the riot policemen. •
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