AS KALEV            STOCK EXCHANGE RELEASE        3.10.2005





Comment  on the public letter of the Chairman of the Council

of the Rae Rural Municipality





In its public letter, Veigo Gutmann, Chairman of the Council

of  the  Rae Rural Municipality, brings unjust and unfounded

accusations against AS Kalev, alleging that the company  has

polluted  the premises of and failed to act in  response  to

the environmental concerns of Rae rural municipality.



AS  Kalev and the rural municipality are currently disputing

waste water tariffs. While the dispute is pending, the rural

municipality is charging from the company unreasonably  high

waste  water  disposal  fees  by  taking  advantage  of  the

monopoly position of its water undertaking. While 15  kroons

per  cubic meter of waste water was charged in disposal fees

upon  AS  Kalev’s relocation to Rae rural municipality,  the

water  undertaking now charges 220 kroons per  cubic  meter.

This  charge is significantly higher than the current market

price, and is therefore unfair.



The  claim that AS Kalev has failed to pay disposal fees  to

the  water undertaking is also untrue. AS Kalev has paid the

invoices  to  the extent required by the contract  concluded

between AS Kalev and the rural municipality, as well as  the

provisions  of the legal acts of the Rae Rural  Municipality

Government and the Council of the Rae Rural Municipality.



This  week, the Rae water undertaking informed AS  Kalev  it

would  shut down the company’s sewerage system, if AS  Kalev

does  not pay invoices in full. AS Kalev believes the  claim

is  unfounded. Should the Rae Rural Municipality  refuse  to

render  waste  water disposal services to  the  company  and

continue   charging  from  the  company  unreasonably   high

disposal fees, the company will file a claim with the  court

in order to protect its interests.



AS  Kalev  is  currently actively searching for  alternative

solutions  to  the issues related to waste  water  disposal.

Among  other things, the company submitted to the Rae  Rural

Municipality  Government  an  application  for  the   design

conditions of its own preliminary treatment facilities on  7

September  2005.  No reply has been received  to  date.  The

company  is also considering several other alternatives  for

providing a solution to the waste water issue.





Ruth Roht

PR manager

+372 6 077 858