Public broadcaster interested in Music Centre again
The Finnish Broadcasting Company (YLE) is still considering whether or not to take part in the construction of the Music Centre being put up in the centre of Helsinki. YLE CEO Mikael Jungner hopes that "we will get this project to move forward one way or another."
Hannu Olkinuora, Chairman of the Board of YLE, says that the company still holds 16 per cent of shares of the Music Centre project.
Asked if YLE is still considering selling the shares, Olkinuora says that he has "not heard anything on that front recently".
The board of the Music Centre said on Monday that the total costs of the project are expected to reach EUR 140 million, which is over EUR 30 million more than the cost estimate made in 2004. The extra cost will be shared by the shareholders - the state-owned Senate Properties, the City of Helsinki, and YLE in proportion to the amount of shares that each of them hold.
The construction company SRV has cut the price tag for the main construction of the music centre somewhat. In October, it was asking more than EUR 124 million. Now it has cut the to EUR 90.5 million, setting the end of May as a deadline for a decision.
The shareholders' decision will have to be unanimous.
The chairman of the Parliamentarily controlled Administrative Council of YLE, MP Kimmo Sasi, feels that the matter should be brought before the Administrative Council because the rise in the cost appears to be significant. CEO Jungner would not agree to making any comments on Monday on who in YLE might decide on the matter.
Minister of Finance Jyrki Katainen (Nat. Coalition Party) is familiar with the latest cost estimates of the Music Centre, but he has not yet formed an opinion on the extra EUR 16 million that the state is expected to provide.
Katainen feels that the matter needs careful consideration, because the initial cost estimate was exceeded so much, and because "more taxpayers' money will have to be used than before", Katainen says.
However, he says that he has a positive view of the matter.
"The rise in the price also means that rent for the Sibelius Academy will rise. The difference with previous calculations can be from one to two million euros a year."
He also expects cyclical changes that may ease the shortage of builders, leading to a decline in prices.
Katainen says that a decision is expected soon at the Ministry of Finance.
Helsinki Mayor Jussi Pajunen believes in a cyclical change. "Then we could save some money."
"As the price per square metre of the Music Centre will fall below EUR 4,000, it is not unreasonable", he says.
Juha Lemström, chairman of the board of the company administering the project, says that everything possible has been trimmed away, and that he does not expect the cost to fall any further.
He notes that construction costs in general have soared since 2004 when the price estimate was set at EUR 108 million.
In retrospect, Lemström says that it was a mistake to set such a low target price in the first place, noting that the land involved is very difficult to build on. "The foundation work alone will cost EUR 20 million", he notes.
Previously in HS International Edition:
More than 20 million cut back on costs of Helsinki Music Centre (15.1.2008)
Helsinki Music Centre may be delayed by lack of interest from construction companies (30.10.2007)
EUR 6 million shaved off price of Helsinki Music Centre (3.10.2007)
Costs of Helsinki´s new Music House likely to increase as contractors´ bids are rejected (3.5.2007)
Construction of new Music House to begin in summer (13.4.2007)