3.2 The Financial Circumstances Surrounding the Building Project
3.2.1 PROJECT GREW, THE BUDGET WAS
EXCEEDED AND FUNDING TANGLED
The Tuberculosis Sanatorium of Southwest Finland was one of the largest facilities to be
built in Finland during the early 1930s. In spring 1930, after the City of Turku had joined
the project, the project budget was FIM 22 million.^613 The Building Board assumed that
three quarters of this sum would be covered by state aid and the rest of the funding would
be covered by the participating municipalities.^614 The City of Turku, which joined the
project only later, was not obliged to pay any more per bed than the other municipalities.^615
However, the costs increased by FIM 5.5 million between spring 1930 and the comple-
tion of the building in April 1933. Furthermore, the state was unable to cover the statutory
three quarters of the funding. What is noteworthy is that, although the number of beds
was increased during the project, this did not entitle the project to increased state aid.^616
Based on the state aid granted for the project, it can be inferred that the budget approved
by the State Medical Board was FIM 15.5 million. The final budget, FIM 27.5 million,
had therefore nearly doubled, and the share of state aid was 42 percent of the real costs.
The project required supplementary funding, and raising such funding became a rou-
tine part of the Building Board and Building Committee’s work. The local authorities had
probably foreseen this much earlier, and had therefore selected two bank managers to serve
on the Board, to bring financial competence to the table. The construction work required
short-term loans, since both the state and municipal shares were paid late.^617 For example,
municipalities reserved beds gradually, so their share of funding was initially small, increasing
only later.^618 In addition, cities were unable to raise loans for longer than two years without
applying for state permission, a process which the Building Board found cumbersome.^619
The Minister of Finance was fully aware of the slowness of the state aid payment, and in
1931 he advised the Chairman of the Building Board to negotiate a loan from the Bank of
Finland, which the Building Board could pay back immediately upon receiving the state aid
613 The share of state aid was, in other words, estimated at FIM 15.5 million and that of the municipalities at FIM 5.5
million. Building Committee May 9, 1930, Section 2. PSA.
614 All the municipalities paid a yearly fee of FIM 5,000 per bed between 1929 and 1932, and a fee of FIM 2,500 in- Kalkas 1933, p. 15.
615 Building Board February 10, 1930, Section 1. PSA.
616 The motion of the State Medical Board to the Ministry of Finance on July 16, 1930. Record No. 2856 6673 III. State
Medical Board 1930 Da: 9. NA.
617 See e.g. Building Board February 25, 1929, Section 4. PSA; and Building Board April 1, 1931, Section 3. PSA.
618 A letter from the Building Board for a loan application dated May 23, 1931. AAM.
619 See Building Board November 3, 1930, Section 2. PSA; Building Board November 3, 1930, Section 14. PSA; Build-
ing Board November 15, 1930, Section 15. PSA; and the application of the Building Board for a loan on May 23, - Documents related to the Paimio Sanatorium project. AAM.