We advised the Tallinn City Government on making decisions in the public procurement process, as well as represented the city in legal disputes related to the conclusion of an innovative cooperation agreement with the world’s leading outdoor media company and the local market leader JCDecaux Eesti.
As a result of the procurement contract, 1,200 sheltered public transport waiting pavilions, 34 outdoor toilets and 141 city information and advertising showcases will be installed in Tallinn. The estimated cost of the public procurement is approximately EUR 67 million. The duration of the contract is 21 years. This project is noteworthy, as the city does not have to invest in the project and, instead, earns additional income through advertising tax.
A unique contract
The local government has a legal obligation to ensure the availability of waiting pavilions and outdoor toilets. Several years ago, the city of Tallinn began to investigate ways to best implement its task. Although one option for the city was to make the necessary investment itself (approximately EUR 25 million), to which the costs of installation and maintenance would be added, the desire was to develop an alternative solution in cooperation with the private sector, which would be the most reasonable for the city.
The partner JCDecaux Eesti, selected based on public procurement, guarantees the installation, construction, maintenance and repair of the required waiting pavilions, outdoor toilets, and information showcases for the city over 21 years, receiving income through the display of advertising and the right to receive payment from the users of the toilets.
It is a unique agreement not only in Tallinn but also in the context of other municipalities, enabling the city to fulfil its obligations without additional financial investments.
Beneficial to both sides
The mayor of Tallinn, Mihhail Kõlvart, explained that the cooperation partner can earn income by using the waiting pavilions as advertising space. “The partner also has the right to build additional advertising spaces,” added Kõlvart. “At the same time, the city does not have to invest, does not have to pay installation and maintenance costs, and also receives an average of EUR 500,000 per year from advertising tax.”
Half of the new waiting pavilions will be built according to the design developed by the city, and half according to the design of the cooperation partner, which has also been specially developed for Tallinn. The first 300 new pavilions will be installed within the following year.
Our services and client team
We represented the city of Tallinn in disputes over the basic documents of the public procurement in the Supreme Court proceedings (administrative case 3-22-619) and over the decisions of the contracting authority in three court levels (administrative case 3-22-1529). Both cases ended with the ruling of the Supreme Court, with which the cassation appeal of the applicants was not taken into consideration. The courts also ruled in favour of the city of Tallinn at all court levels. In addition, we also advised the city of Tallinn in making decisions in public procurement, as a result of which a procurement contract was signed.
Our client team included partner Allar Jõks, counsel Kadri Härginen and senior associate Mario Sõrm.