For years, Tallinn Education Department has been implementing a solution for furnishing schools and kindergartens based on operating lease. In 2010, 4 schools were furnished with the help of lease. In 2012, Nord Varaliising helped furnish 2 high schools and 2 kindergartens. The most recent major furnishing works were fulfilled in Kuristiku Gymnasium, Läänemere Gymnasium, Vikerkaare and Kolde kindergartens.
Tallinn Education Department succeeded in furnishing the educational institutions not by means of procurement, but announcing a hire-purchase agreement. Essentially, a hire-purchase agreement is similar to a normal procurement process – an exact specification of all the assets you are looking to acquire is provided. The main difference lies in the fact that as a result of procurement, the purchase price of assets is not compared as is the full-service monthly payment. The offered monthly payment must include asset acquisition, transportation, installation, and insurance for the entire lease period. This is a “turnkey” solution, which enables to include all assets in one procurement.
The given solution does not burden the borrowing capacity of a city or a municipality, being viewed as current monthly expenses. Equally important, it is still possible to direct the remaining funds elsewhere to be able to fulfil obligations, an area not covered by lease.
Interests offered to the public sector today are very favourable, their starting rates being very low. Thus, it certainly is not an expensive solution, but rather a smart way of planning to divide expenses optimally.