Estonian Parliament enacts genome law

The Baltic Times, TALLINN
By Kairi Kurm
Dec 21, 2000

Parliament enacted a law on Dec. 13 allowing the creation of a nationwide gene bank in Estonia. The Human Genes Research Act was enacted by a vote of 42 to three with one abstention.

“It was a very progressive step taken by the Estonian Parliament,” said Jaanus Pikani, chairman of the supervisory board at the Estonian Genome Foundation.

He said that Estonia is one of the first countries to regulate human gene research and other countries should follow in the future. Genetic research is also regulated in Iceland and partly in Great Britain and Canada.

Minister of Social Affairs Eiki Nestor said that unlike the genome research act of Iceland, the Estonian law was a step further because it would allow the identification of gene donors when technology advanced so far that it would become possible to treat their diseases. He said that rapid progress in scientific research would have led to genomes anyway and it was good to have the proper legislation before it happened.

“If genome research were not regulated in Estonia, data could be misused,” said Pikani. “Now people know what rights they have and how their genome data will be used.”

The new law regulates how a human genome should be researched, how health data bases of the Estonian population should be created and stored. The act also guarantees a gene donor’s basic right to maintain his privacy.

According to the genome law the gene bank may be used only for scientific research, research and treatment of illnesses of gene donors, public health research and statistical purposes. Use of the gene bank for other purposes, especially for collecting evidence in civil or criminal proceedings or surveillance, is banned.

A gene donor’s doctor also has the right to obtain a decoded description of the gene donor’s health status from the gene bank for his treatment on his consent.

Although participation in the process is strictly voluntary, initiators are hoping to collect data on a million people for the reserve within five years. At first an institution should be created next to the Ministry of Social Affairs, which would take over the administration of the gene project from the Estonian Genome Foundation, said Pikani.

“The genome foundation, which is a small institution created by private persons two years ago, will probably start looking for foreign investments,” said Pikani. He said that a number of foreign investors had already expressed interest in the project, but the genome foundation didn’t have any authorization to deal with it at the moment.

According to preliminary estimates, the gene reserve project will cost about 1.5 billion kroons ($84 million), one-third of which will be provided by the state and the rest by Estonian and foreign private capital.

After an institution has been created a six-month pilot project is started, for which a data base of about 10,000 people is established with the help of 40 doctors. Pikani believes that the institution will start the pilot project in July or August next year and the real five-year project will be started in 2002.

Andres Metspalu, a professor of biotechnology at Tartu University and a key figure in developing the gene project, is confident that Estonia’s gene bank plan will not only advance gene science but also promote the growth of a biotech industry which will allow Estonians to benefit from gene-specific drugs now being developed.

Tallinn water sold to a British company

The Baltic Times, TALLINN
By Kairi Kurm
Dec 14, 2000

Tallinn’s water utility privatization commission decided on December 6 to sell 50.4 percent of Tallinna Vesi (Tallinn Water) to British International Water UU, leaving itself one golden share.

According to Priit Koit from Suprema Securities, an advisor to the Tallinn city government, the bids of International Water UU for the purchase of shares and for the new water tariffs were the best.

International Water UU offered 1.338 billion kroons ($73 million) for 50.4 percent of the water utility; 641 million kroons for the existent 28 million shares and 697 million kroons for the 30 million new shares created in Tallinna Vesi.

International Water UU will leave the price of water unchanged until 2003 and a 15 percent tariff will apply in 2004 and 2005.

A competing bidder, Generale des Eaux at the same time wanted to increase tariffs in 2001 and offered 488 million kroons for the existing stake. A third bidder Northumbrian Water Group, representing French Suez Lyonnaise, withdrew from bidding earlier, saying the deal was too advantageous for the city.

The selected winner of the bidding will have to be confirmed by the city government by Dec. 21.

Koit said that the new investor will not be able to dictate the water rates, as the figures have to be approved by the local government. “The tariffs have to cover the company’s grounded costs and bring in grounded revenues,” said Koit.

According to the city government the city demands investments of at least 4 billion kroons in 12 years to complete the construction of a sewer network by 2006.

Koit said that the main task of the new investor is to improve the present situation of the sewer and drain network. He said that about 30 percent of the network is leaking and some pipes date back to 1840.

“The first investments have to be focussed on the pipes and a network has to be established in the regions that are not supplied with pipes,” said Koit.

He said that in the first five years the Tallinn sewer and drain network needs at least a 1.2 billion kroon investment. He said that the money paid for the 30 million new shares will probably be invested in Tallinna Vesi, while the 641 million kroons paid for the existing shares will go to the Tallinn city budget.

At present Tallinna Vesi services only one of the 12 regions in Tallinn, which covers about 70 percent of the whole Tallinn territory. The other 11 regions are controlled by a number of small companies. Koit said that the city is planning to organize new bids for these regions and the share of Tallinna Vesi may possibly increase.

The Tallinna Vesi tariffs for water and sewage for citizens is 15 kroons per cubic meter, while the companies have to pay 35 kroons per cubic meter and sponsor the citizens, said Koit.

Rain Tamm from LHV, the Estonian advisor of International Water, did not want to specify the plans of the bidder before the city government had confirmed the bidding.

He said that the city should be delighted with the level of the bid, which is more than two times higher than the 580 million kroon prime price set by the city.

International Water UU is a company formed by British water utilities International Water Group and United Utilities Group. United Utilities is one of the largest water and canalization firms in the world with 28 million consumers in the UK, Australia, Poland, the Philippines, the U.S.A., Bulgaria and other countries. International Water Group is a subsidiary of the construction firm Bechtel and offers water and canalization services to 6 million consumers in the UK, Poland, Australia and the Philippines.

The nine-month profit of Tallinna Vesi was 25 million kroons on turnover of 320 million kroons. The annual turnover for the year 2000 is estimated at 419.1 million kroons on profit of 20 million kroons.


Radisson SAS Tallinn opens its doors in two months

The Baltic Times, TALLINN
By Kairi Kurm
Dec 14, 2000

An international hotel operator Radisson SAS will open a new full-service upscale international business hotel in the heart of Tallinn on February 1 2001. Although it is six weeks from now, the hotel has already booked 50,000 overnight stays to its 40 million euro facility.

Torbjorn Bodin, general manager at Radisson SAS Hotel, said that although this date was set one and a half years ago the project will be finished at the scheduled time. The development will create more than 200 new jobs.

According to Bodin the new hotel with its 277 rooms will capture about half of the upscale Tallinn hotel market and 5-10 percent of the Tallinn hotel market in general.

“We have a broad niche for ourselves,” he explained. “The hotels that may suffer from low demand are purely dependent on leisure business in the mid-price range.”

A quarter of the rooms at Radisson SAS Tallinn will be Business Class, offering additional luxuries for executive travelers. The hotel will also include 10 Junior Suites, three larger suites and a Presidential Suite.

According to Bodin, rates at the new Radisson SAS hotel in Tallinn will start from 2,000 kroons ($110), which is slightly more expensive than the competitors’ prices. The biggest competitor to Radisson SAS is Olumpia Hotel, which is just a kilometer away.

Tarmo Sumberg, chairman of the board at Reval Hotel Group, which comprises five hotels in Tallinn and Latvia, said that Radisson SAS Tallinn will motivate hotels on the Tallinn market to work harder. He said that Radisson SAS offers good quality service and its target group is mostly international business travelers, although none of the hotels lack ordinary tourists.

He said that it was obvious that the room rates at Radisson SAS Tallinn were more expensive than the rooms at the Olumpia Hotel, because the new hotel had invested more money.

“We will provide very good quality for that money,” he explained. “All the rooms are fully air-conditioned with the highest security and safety level.”

According to Paul Taylor, district director of sales at Radisson SAS in the Baltics, the situation on the Lithuanian hotel market is slightly different.

“In Vilnius there is a lot of demand and not many rooms for upscale international businessmen. Our hotel in Vilnius consists of only 120 rooms, so we have adapted the prices accordingly,” he said. Next year in February Radisson SAS is planning to open a hotel with 75 rooms in Klaipeda, Lithuania.

Radisson SAS’s hotel in Riga consists of 350 rooms and the average rate of occupancy is 53 percent. Taylor said that many hotels in Riga are being privatized at the moment. “We are waiting for some more activity on the market,” he said.

“For the first year we have budgeted for a very decent 63.5 percent occupancy rate at Radisson SAS Tallinn,” said Bodin. Within Radisson SAS the average rate of occupancy was around 65 percent last year, he added.

Radisson SAS is operating 108 hotels in 38 countries in Europe, West Africa, the Middle East and some hot spots in South Africa and China. Bodin said that clients of the Radisson SAS hotel get eurobonuses and there are special discount programs for major companies all over the world.

He believes that the 17 conference and banquet rooms will provide at least 10 percent of the hotel’s sales.

The largest banquet room – the Hansa Room – which seats 250 guests for a formal dinner or has a capacity for more than 500 guests for a cocktail reception, is situated on the 2nd floor.

The Tallinn Room – located on the 24th floor – has the highest location in Estonia and is an excellent venue for a reception of 150 guests.

The first six floors of the 25-floor hotel building will be rented out as offices. The height of the hotel will be 103 meters. The hotel is owned by a Finnish construction company SRV (45%), Finnfund (25%), Radisson SAS (15%) and other funds.

SRV also owns 50 percent of the nearby parking lot. Radisson SAS will also be the first hotel in Estonia, which will park cars for clients.

According to Kurt Ritter, the president and CEO of Radisson SAS Hotel and Resorts, Radisson SAS Tallinn will become an upscale first class property and will offer five-star service. The only five-star hotel in Tallinn at present is the Park Consul Schlossle. Four-star hotels include the Olumpia, Scandic Hotel Palace and Grand Hotel Tallinn.


Estonians are planning to produce environmentally friendly plastics

The Baltic Times, TALLINN
By Kairi Kurm
Dec 07, 2000

A group of Estonian scientists and businessmen are opening a bioplastics plant in southern Estonia in three years. The project is expected to cost 1 billion kroons ($56,000 million) and will employ 100 people.According to Vambola Kolbakov, the strategic project director, the plant uses easily recyclable raw material (grain) to produce plastics that currently are made from mineral oil mainly.

“The product of the project is an environmentally friendly PLA [poly-lactic acid]-based plastic,” said Kolbakov. “Also non-core business products like bran, which will be further transformed to fodder, will be produced, and production waste will be composted.”

Lounatoostus through its project development company Estbiotech and the University of Tartu, which owns the microorganism used, will implement the project.

The plant will be located on a 25 hectare plot in Polva, which already has suitable road and railway accesses, according to project officials. Some infrastructure such as a two-mile-long gas pipeline, a water pipeline and half-mile-long power lines will be installed.

“The company will employ 100 people but indirectly about 3,000 people dealing in agriculture, and transportation will be bound to this project,” said Kolbakov.

The Estonian government has expressed its support for the project due to its effect on the overall development of the Estonian economy, especially agriculture. According to Kolbakov, the project anticipates 200,000 hectares of grain growing.

PLA-based plastics have many advantages over oil-based plastics, said Kolbakov. First, the PLA-based plastic is self-degrading in a natural bacteria environment. Second, the world market price for grain has been largely stable over the past couple of years while crude oil price has been fluctuating greatly and is on an upward trend. Third, the grain can be produced locally and it doesn’t need processing before it can be used as raw material.

“Additionally, the PLA-plastic has the same positive physical, chemical and optical characteristics as existing plastics, and these characteristics can be varied with additions, and the price of it doesn’t exceed the price of existing plastics,” Kolbakov added.

“Our prices should be competitive,” he added. “Our estimates show that we will be competitive. It becomes evident in the practical work. The projected price of PLA manufactured by the new plant is $1 – $1.50 per kilogram,” said Kolbakov.

The full capacity of processing grain in the planned factory is 200,000 tons per year. After fermentation, 60,000 tons of PLA will be produced, 45,000 tons of bran will be left for fodder and 95,000 tons of waste can be used as compost.

According to Kolbakov, other starch-based products like food starch, dextrin and alcohol may be produced if there is no demand for PLA polymers.

PLA-based plastics can be used to produce pressed and blown plastic (packaging bags, waste bags), fabrics and fibers (hospital clothing, personal hygiene), cover material (plastic cups, paper and board cover), temperature formation (dishes, containers for fruit and vegetables, milk containers), blown products (bottles for several liquid foods and drinks).

“The PLA-based plastics have an antiseptic function. They keep bacteria away from food wrap,” said Kolbakov.

The main markets for the product are expected to be Estonia, Latvia, Lithuania, Finland, Sweden, Norway and Denmark. The total plastic usage in these countries per year is approximately 1.2 million to 1.3 million tons.

Kolbakov believes it’ll be possible to replace plastics now in use with bioplastics with little extra investment and estimates an immediate market of 100,000 tons to 180,000 tons per year. The total production at the factory comprises only about 8 percent to 9 percent of the whole plastic market, said Kolbakov.

According to the Modern Plastics Encyclopedia 1998, the demand for environmentally friendly biodegradable plastics is increasing by approximately 70 percent annually.

About 100 companies in the region have been contacted and approximately 60 percent of them have expressed their willingness to purchase bioplastics, Kolbakov said.

“Total investment needed for the project is
$ 40 million over two years, from which approximately $40 million is planned to be share capital for the plant building and working capital of $20 million financed with loan capital,” said Jaan Tobreluts, senior project manager at Lounatoostus.

“According to our business plan, we should find an investor by May 2001. We have sent our project description to funds and investors all over the world,” said Tobreluts.

According to Tobreluts, the final completion of the plant and training of employees will take place in April 2003, and the standardization and certification of production should be finalized at the same time.

The official opening of the plant is scheduled for May 2003, said Tobreluts.


Hospitals have run out of money

The Baltic Times, TALLINN
Dec 07, 2000
By Kairi Kurm

 Thousands of patients are waiting in lines for beds in hospital wards whose health insurance fund allocations for the year have been exhausted. Hospitals have used up most of the resources given to them by the health insurance fund and now kill time waiting for next year. Public officials blame hospitals for being overstaffed and badly managed.

According to Maris Jesse, deputy director at the Central Health Insurance Fund of Estonia, the situation in Estonian hospitals is not as dramatic as newspapers have reported it. “The problem concerns mostly Tallinn, where there is more hospital capacity than needed for today’s modern health care delivery,” she announced.

Jesse said that competition among hospitals which wanted to survive reforms was very intense. “The only solution to avoid the situation where big Tallinn hospitals claim they’ve run out of health insurance contracts is to start hospital reforms quickly by merging hospitals and cutting overlaps in services,” she said.

Last year, the state budget allotted almost 4.12 billion kroons ($231 million) for health insurance, this year the sum is 4.14 billion kroons. Next year’s budget will increase by 316 million kroons, according to Sigrid Tappo, spokesperson for the Ministry of Social Affairs.

“The ministry’s opinion is that money should be spent more effectively. Some hospitals overlap each other and some have management problems. It’s a yearly problem that money is used up before the year ends,” said Tappo.

According to Andres Maesalu, chief doctor at the Tallinn Central Hospital, the hospital offers as many services as the budget agreed to in the contract with the sick fund foresees.

“For the sum we have to guarantee emergency help and dispensary treatment. These are our two primary tasks. After we have provided these services we start treating inpatients – patients who have registered themselves for hospital treatment,” said Maesalu.

He said that 1,000 patients are waiting in line for treatment in the wards of central hospital. “They have registered themselves, but most don’t need treatment this year. Anybody who needs emergency treatment gets it at once ,” said Maesalu.

Maesalu said that the contract with the health insurance fund didn’t specify where the money should be spent. He said that the waiting list in the ophthalmology clinic of the central hospital is the longest because other hospitals don’t offer such service. In the eye clinic patients are registered for next June, said Maesalu.

Maesalu said that the problem shouldn’t be solved through the establishment of private hospitals because public hospitals have sufficient capacity.

“We need the funds. We should give patients the opportunity to finance part of their treatment and increase the present 5 kroon fee per visit,” said Maesalu. He said that the health insurance fund should also specify how much of the resources should be spent on scheduled treatment.

Peep Podder, chief doctor at Nomme Hospital, said that the health insurance fund is blaming bad reforms for the disorder, but the actual reasons is a lack of tax payments. He said that far too many reforms had been implemented and someone should be responsible for the wrong steps taken.

Podder said that taxe-collection was better when employers had to pay 13 percent of an employee’s health insurance separately. Now that they pay the health-insurance tax together with a 20 percent social tax, following the tax board’s conclusion that the social tax would be collected more efficiently if paid together with the health-insurance tax, the exact opposite has occurred, he said.

Podder said that Nomme Hospital doesn’t have lines so long as other hospitals. “We allocatethe budget at the beginning of the year. Unfortunately, the amount of resources is very small, smaller than the actual need of our patients,” said Podder.

According to Podder it is not right that doctors have to decide whether a patient gets treatment or not. “It’s the task of the health insurance fund to make those unpopular decisions and say which services should be charged for and which should be free,” said Podder.

Tappo said that the Ministry of Social Affairs approves most of the ideas proposed by the health insurance fund. “The health insurance fund will be turned into a public institution and become more independent next year,” said Tappo.

According to Daniel Vaarik, spokesman from the Ministry of Finance, the ministry didn’t like the idea of separating the health insurance fund from the Ministry of Social Affairs because the state would lose control over the fund.

Podder suggested patients should pay for the less important treatments themselves. He said that some patients should go to family doctors rather than specialists at Nomme Hospital, because patients sometimes visit specialists for the wrong reasons and waste a lot of valuable time and money.

He also warned that if the state didn’t start dealing with preventing problems like alcohol abuse, cigarette smoking and drug addiction, the amount of treatment required would grow dramatically. “People waiting on the list for stationary treatment should also be treated at once, because their problems get worse and would thus become more expensive to treat,” he said.

Podder said that the Board of Social Welfare and Health Care of Tallinn had sent the hospital a note asking it to form a committee to start dealing with paid services.

Ene Tomberg, manager of the Social Welfare and Healthcare board, has assured the public the situation is not so dramatic.

“The hospitals know how much resources they have for treating patients,” said Tomberg. “The task of the health insurance fund is to transfer that money to the hospitals. The hospitals have had more work than predicted.”

She said that if all the taxpayers paid their health insurance money to the tax board as required there wouldn’t be any delays in getting treatment.

“The only way to get out of this is to make every citizen pay taxes properly,” said Tomberg. “And, of course, increase the budget for variable costs like electricity for example,” she added.