Latviski English По-русски
Ceturtdiena 14.12.2017 | Name days: Gaisma, Auseklis

Former head of energy pricing body deals a blow to Lithuania and President

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Lithuanian President President Dalia Grybauskaitė

Linas Jegelevičius for the BNN

The pendulum in 120 million euro lawsuit against Lithuania may have swiftly shifted in favour of France‘s energy giant Veolia, after Diana Korsakaitė, former chairwoman of Lithuania‘s National Commission for Energy Control and Prices, VKEKK, testified in the International Centre for Settlement of Investment Disputes in Washington DC about pressure she has felt from President Dalia Grybauskaitė.

Korsakaitė testified that she had been pressured over Vilnius city heating tariffs set by Vilniaus Energija, an energy company operated in the Lithuanian capital as part of Veolia.

In her testimony, Korsakaitė admitted that, during her term as the VKEKK chairperson, President Grybauskaitė and her administration «constantly attempted» to «unfairly» manipulate the heating tariffs set for the claimant, Velia-Vilniaus Energija.

«The presidential administration along with the office of the prime minister made political pressure on the commission with the aim of nationalising the money saved by Vilniaus Energija,» Korsakaitė said in the testimony. news site broke the news last week.

Korsakaitė also confessed she feared a politically-motivated investigation against her by the Prosecutor General’s Office and the Financial Crimes Investigation Service (FNTT), which are seen by many as the satellites of the President‘s Office.

She also claimed that Lithuania’s law-enforcement institutions brought charges against affiliates of the Veolia group, although some VKEKK experts had notified the charges were unsubstantiated.

Veolia alleges it was ill-effected by unfair conduct of Lithuanian politicians and regulatory institutions.

In a statement, the company has explained it has resorted to international arbitration due to the «unwillingness» of the Lithuanian state to compensate the company after unfair and discriminatory changes in laws and regulations have resulted in extensive losses suffered by its fully-owned subsidiaries, Vilniaus Energija and Litesko.

«Veolia has been left with no other choice than to resort to international arbitration,» Malika Ghendouri, a Veolia executive, has said, adding, «This process is long and expensive and could harm the parties’ reputations, but it provides the best guarantee of neutrality and objectivity, which might not be available to the company in other forums.»

Meanwhile, officials from the Vilnius municipality and law-enforcement accuse Veolia of unlawful manipulation of energy prices, announcing ca a 200-million-euro claim against the concern

Following the testimony, which is seen as very detrimental to Lithuania in the lawsuit, President‘s press service released a statement this week saying that «the President’s Office does not comment on proceedings of courts or international arbitration institutions.»

«Arbitration (proceedings) are currently ongoing. This is a confidential, commercial dispute initiated by a privately-owned company, known in our country as Dalkia, over decisions taken in the Vilnius heating sector five years ago,» Mindaugas Lingė, the president’s chief domestic policy advisor, said on the Žinių Radijas radio station on Tuesday, September 12.

«The arbitration process is closed and any comment, public discussion may be treated as a violation of the process and may entail certain consequences,» he added.

According to the advisor, Grybauskaitė strived that district heating prices in Vilnius go down, but Diana Korsakaitė as the VKEKK chief failed to achieve this goal.

Commenting on the Korsakaitė testimony, Prime Minister Saulius Skvernelis told Žinių radijas he had felt pressure from different groups in the seat of Interior affairs minister. He says he believes the former VKEKK chief’s actions should have been «completely» different has she felt pressure.

«If you are a head of an independent state institution and the politicians attempt to wage pressure on you, you have to react immediately informing respective state institutions of that. Now it seems that Mrs Korsakaitė chose to represent not the state or the institution she has worked, but the opposite side, the claimant. I reckon the stance by her has nothing to do with finding the truth,» the PM emphasised.

Veolia’s Lithuanian units supply heat and electricity to more than 700,000 customers, according to its website. Vilniaus Energija signed a 15-year contract to operate the capital city’s heating grid in 2002 and had to turn the heating grid over to the government in April 2017.

Veolia claims it has allotted more than 200 million euros for the upgrade of Lithuania’s heating systems, making it the largest French investor in Lithuania, and it has increased use of cheap biofuels. The company insists the modernisation allows Vilnius’ combined heat and power plants to run more efficiently and suffer from malfunctioning less.

Lithuania‘s Investigation Service of Financial Crimes, FNTT, also launched criminal proceedings against former chiefs of Vilniaus Energija, alleging that unlawful manipulation of gas acquisition prices led to almost 3 million euros in damage for Vilniaus Energija, Litesko and heating consumers. Vilniaus Energija maintains the proceedings are based on misleading data and fiction.

With the local municipalities taking over heating from private suppliers, Veolia has had some major upsets in Lithuania lately, which reflect on the company’s economic indicators.

Last year, Vilniaus Energija (Vilnius Energy) saw its annual revenue fall to 151.058 million euros, down 11.5 percent from 170.746 million euros in 2015.

The company, whose 15-year lease on the Lithuanian capital’s heating system ended in April 2017, posted a net loss of 568,000 euros for 2016, compared with a net profit of 363,000 euros in 2015, according to its 2016 annual report filed with the Centre of Registers.

Veolia‘s another affiliates in Lithuania have also been struggling recently and go to court to defend their interests.

Amid an ongoing court dispute over an early cancellation of its lease of Alytus’ district heating system, Litesko, a subsidiary of France’s Veolia, plans to propose to transfer the assets back to the southern Lithuanian town in the spring of 2018, but it will demand 9 million euros in compensation for its investments.

Litesko and the Alytus local authority signed a 15-year contract on the lease of the town’s heating grid back in 2001. In 2005, the contract was extended for another ten years, from 2016 to 2026. Certain terms of the contract were revised two years later.

The Lithuanian Competition Council ruled in September of 2016 that the 10-year extension was unlawful. The Alytus administration then turned to court for an early termination of the contract and filed a claim for damages, worth 14.227 million euros, against Litesko for expensive heating supplies and for unused and sold emission allowances.

Ref: 020/

Leave a reply

  1. Zerry says:

    Energy business in Lithuania and Latvia is filled with bribery, corruption and envelopes. Seems that in Lithuania it’s gonna be a huge mess. Also taking into account that Lithuania is certainly not a friendly place for foreign business.

    Thumb up 0 Thumb down 0

FM mentions progress in combating grey economy; prime minister expects more

Latvia will continue combating grey economy in construction field and fight envelope wages, said Latvian Finance Minister Dana Reizniece-Ozola during the ministry’s Taxpayer Forum 2017 organized by the ministry on Wednesday, 13 December.

EP agrees to EU moving on to phase II of Brexit talks

Members of the European Parliament have overwhelmingly supported what has been negotiated upon in the joint EU-UK progress report in Brexit talks and have recommended Brussels to move on to phase two negotiations on the future relations of the parties.

Businessmen share stories: ‘surviving’ and taking risks in Latvia when starting a business

The silent period – the time for Christmas wishes – has begun. Snow covers Tukums, and the city slowly becomes white. Everything is quiet at Pils ielā. The phone rings, interrupting a quiet moment of watching snowflakes fall under the light of a lantern. «You’re here for us, aren’t you?» BNN goes to interview manager of Merci Cafe Anija Rabkeviča (23) and cafe’s founder Rinalds Pluģis (22). They tell about their experience of ‘surviving’ in Latvia.

BATL: Transport Ministry plans to increase burden on taxpayers’ shoulders

Latvian Transport Ministry’s developed development plan for the transit industry, which was presented to Saeima’s National Economy Committee this week, states that raising competitiveness in the country requires subsidizing railway cargo transports.

Croat soldier dies in Lithuania barracks

A soldier from the Croat contingent in Lithuania, who served in the Rukla military town as part of NATO international forces, has passed away.

LMP President: proposal for LMT and Lattelecom merge was only politically discussed

Only political discussions were held proposal on the merge between Latvijas Mobilais Telefons and Lattelecom, and it is good that this matter has been taken off the agenda, said LMT President Juris Binde in an interview to Rīta Panorāma programme of LNT.

Survey: 55% of employed people are not paid for overtime

More than half of employed people work overtime. On top of that, 55% of them are not paid for working overtime and 45% are paid, according to results of a survey performed by CV Market.

Estonian military receives anti-tank missiles, bought with U.S. funding

The Estonian military has acquired another lot of missiles for the American-made man-portable Javelin antitank system bought with U.S. money allocated for supporting European defence measures.

Tallinners can claim millions for overpriced water, says competition watchdog

In the Estonian capital, the result of a legal dispute between water utility company Tallinna Vesi and the Estonian Competition Authority is that consumers are considered to be able to claim tens of millions of euros in compensation for overcharged water tariffs that have been in place for a number of years.

Latvian Association of Regions decides against working with For Latvia’s Development political party

It was decided at a meeting of representatives of Latvian Association of Regions (LAR) that the party will not work with For Latvia’s Development. The party has also decided to start in 13th Saeima elections with its own list of candidates.

Italy in state of emergency after fire at Austria gas hub

Italy has declared a state of emergency in its natural gas sector as a large explosion at a major natural gas hub in Austria killed one person, injured at least 18 and is prone to affect supplies in central Europe.

LEC: more expensive MPC is a serious burden for international competition

«To maintain GDP growth rate, the government should address priority matters like prevention of mandatory procurement component costs and electricity price rise to reduce costs for both businesses and residents. It is very important for employers to have the energy policy closely tied with production, because processing industry is the main driving force behind development of Latvia’s national economy,» says Latvian Employers’ Confederation (LEC) Director General Līga Meņģelsone.

Pilots of Ryanair expected to strike prior to Christmas

The clients of Irish low-fare airline Ryanair will face inconvenience before Christmas as pilots and crew announced industrial action seeking to achieve union recognition and better conditions in the company, which is criticised by unions that it fails to offer pilots the same pay and conditions as its rivals.

Corruption in public sector remains a major problem in Latvia

Money laundering activities and grey economy are in decline in Latvia. However, corruption in the country’s public sector and smuggling activities remain serious problems for the national economy, as noted in the report on unaudited economy, corruption in the public sector and money laundering activities in Latvia published by Latvian Chamber for Commerce and Industry on Tuesday, 12 December.

Saakashvili released from detention in Ukraine

Former Georgian President, now opposition activist in Ukraine, Mikheil Saakashvili, has been released from arrest by a judge, who denied a request from prosecutors to subject him to house arrest, but the case against him continues.

Justice Minister: Latvia will continue supporting Macedonia’s judicial sector

Latvia’s Justice Minister Dzintars Rasnačs has met with his Macedonian colleague Bilen Saliji, who arrived in Latvia to sign the Memorandum for Cooperation between Latvian Justice Ministry and Macedonian Justice Ministry.

Survey: 65% of Latvian travellers avoid regions at risk of terrorist attacks

The majority or 65% of Latvian respondents mentioned that whenever they make travel arrangements, they try to avoid regions in which there is a high probability of terrorist attacks or natural catastrophes, according to the latest Latvia Tours Travel Index.

Ex-Interior Ministry’s state secretary offered becoming a candidate to manage Eastern Hospital

The only offer extended to the now former state secretary of Latvia’s Interior Affairs Ministry Ilze Pētersone-Godmane to help her stay in state administration was the offer to become a candidate for the most of head of Riga Eastern Clinical University Hospital, as reported by Latvijas Avīze.

Ministry’s parliamentary secretary emphasizes EU’s unity in the Middle East process

«Latvia continues supporting the solution that can be achieved through direct talks between Israel and Palestine with compliance of interests of both sides and making Jerusalem the capital of both countries. The European Union has to remain a reliable partner for Israel and Palestine. We have to continue the open dialogue with both sides and ensure EU’s unity in the Middle East peace process,» says Latvian Foreign Affairs Ministry’s parliamentary secretary Zanda Kalniņa-Lukaševica.

Estonian entrepreneur in Russia convicted to 12 years in prison

A court in Russia has convicted an Estonian aviation technology entrepreneur to a 12-year prison term in a high-security prison, Russian media report.

Countryside tourism may be threatened by unfair competition

Countryside tourism businesses are threatened by unfair competition and growing bureaucracy, as emphasized by Latvian Countryside Tourism Association Lauku ceļotājs after discussing this season’s results at four regional business seminars.

Estonia fights marginalisation pushing for relocation of 13 institutions to regions

As Estonia seeks to relocate part of government agencies out of the capital Tallinn, Estonian government ministers have been reminded that by the middle of January an action plan is required from them on the relocation of the central offices of 13 Estonian state institutions.

Finance Ministry: exports of goods reached a new record in October

The volume of exports continued growing in November, reaching EUR 1,070,600 at the end of the month and setting a new record for exports for one month’s time. This export index is the highest in the history of statistical records in Latvia, Finance Ministry stated in its report, commenting on data from the Central Statistical Bureau.

Heavy snow in Western Europe causes transport troubles

Heavy snow in Benelux countries, as well as in Germany and the UK has prompted hundreds of flight cancellations, while car accidents have caused traffic jams on roads.

Amnesty International: EU governments know about migrant torture in Libya

Governments of European Union member states are aware of torture and abuse of refugees and migrants in Libya, Amnesty International has stated, insisting that trying to reduce migration, the EU is actively financially supporting a «system of abuse and exploitation» on the Mediterranean coast of Libya.

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: