Merko Group

Road maintenance includes planning, construction and maintenance of roads, squares, bridges, utilities and infrastructure related to them. The largest contracting authority in the sector are the Estonian Transport Administration and Rail Baltica, accounting to about 60% of the sector’s orders (read: money). Local authorities account for up to 25% of the total, and the rest of the revenue is from the State Forest Management Centre, ports, airports, national defence and private customers.

The financing of the road maintenance sector is characterised by a few indicators. While in 2021, the Estonian Transport Administration had a total of 292 million euros for road maintenance, in 2022 253 million euros and this year 202 million euros, the figures for the following years speak for themselves: in 2024, 153 million euros is planned to be spent and in 2025 109 million euros. The share of orders from the City of Tallinn is also decreasing quite rapidly. All the figures given are absolute figures, which also include general inflation. To sum up, the sector has 50 million euros less to spend each year.

In a fast-changing business environment, all market players have reduced their teams. Now that money is tighter than before, there is a need to make a tough choice on what to spend the remaining ‘spare change’. To save costs, we have also introduced so-called seasonal contracts for our new staff.

The general economic situation forces us to be extraordinarily smart, because in difficult times, when you’re up to your neck in water, the last thing you want to do is let your head droop. Operating in such an economic environment is a time of fierce challenge for business, so we don’t have the space to wallow in the comfort zone.

Operating in such an economic environment is a time of fierce challenge for business, so we don’t have the space to wallow in the comfort zone.

Today, we can say that in previous periods we have been able to take the right decisions at the right time, so we are relatively well prepared for the new reality. Three years ago, we built a new workshop building that provides the best working conditions in the country in the road maintenance sector. We replaced our depreciated asphalt-concrete plant with a new and modern one, and the sale of the old plant was timed to the best possible period.

We are systematically upgrading the company’s fleet and construction machinery. We have succeeded in restoring the supply of granite from China, which was stalled during the COVID period due to the rise in transport prices.

This year, the biggest project for Tallinna Teede AS was the reconstruction of Vana-Kalamaja Street in Tallinn. For the next period, we have signed a contract for the construction of two viaducts on the Rail Baltica route.

So what else is the company doing to secure its future? As experts, we are increasingly involved in several committees and working groups for a number of complex road projects. For example, we participate in the Ministry of Finance’s working group on the development of regulations on road construction, the drafting of the Climate Change Act and the revision of the Road Maintenance Council’s guidelines for stabilisation works. Personally, I have been contributing to the educating of new road engineers at Tallinn University of Technology for several years.

We remain modestly optimistic. Despite difficult times, we are stronger as a company today than we were last year.

We remain modestly optimistic. Despite difficult times, we are stronger as a company today than we were last year. Our company of 105 people has worked well as a team. We hope that both we and you will have good professionals and enthusiasts, plenty of challenging projects, good luck and success! Be well and stay safe!