In 2018, a survey “Development of strategies towards a sustainable water sector” was completed at the request of the Estonian Association of Water Companies, which concluded that rural municipality-based water business is not sustainable and only 4 counties are sustainable in county- based water utilities. However, voluntary consolidation has not delivered the expected results – 3 to 4 water companies that serve larger cities can manage sustainably in Estonia.

In order to resolve the solution, the Ministry of the Environment commissioned a project “Analyses and Action Plan towards Sustainable Water Services in Estonia” where the research and advice is provided by OECD.

TRINITI participated in the project as a legal consultant to the OECD (Ain Kalme, attorney at law). Participation in the project was an excellent opportunity to apply the TRINITI’s legal expertise and experience in infrastructure and constitutional law.

The project consisted of two phases. The first stage was completed by a report on legal issues relating to the preferred option for consolidation The legal report included an analysis on:

• Ownership of assets and transfer of ownership.
• Financial liabilities created prior to consolidation.
• Governance of utilities.
• Contractual modalities (e.g. delegation of some functions or creation of a new regional operator) and legal forms of entities operating water infrastructure, owned by local governments.
• Exit and entry rules for new members.
• Oversight of performance (role of municipalities or an economic regulator).
• The role of water users and communication mechanisms to enhance transparency of water utility performance and decision making.

At the end of the project, an action-oriented strategy and an action plan together with a timetable and a communication plan was completed.