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Tuesday 17.07.2018 | Name days: Aleksejs, Aleksis

Heating bills – consequences of certain residents' “feasts”

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“It is claimed that the Germans are to blame for the failure of the massive Ventspils TEC project, while the poor city council has managed to save the situation and even earn some money. However, a different, silenced story, is closer to the truth,” – reveals former Ventspils City Council official Aivis Landmanis.

He notes that the city council had begun the massive TEC project in the beginning of this century. “By making the decision about the construction of the TEC, it was also clear that there will be no new investments in the current heating system, because the newly built TEC will need to replace the old system. This decision even then provided that the heating energy consumers will need to pay for the possible failure of the project,” – Landmanis says.

What happened then?

In the beginning of 2005, the municipality founded SIA Ventspils ENERGO for the realization of the TEC project. In August of the same year, the municipality had given away its ownership rights over SIA Ventspils ENERGO to a different company – SIA Ventspils TERMO (also owned by the municipality).

“Following the support of this initiative by the lead officials of the municipality, this scheme of the project was completely hidden from the eyes and ears of other officials and society and “feasts” began. Our city’s government began searching for a wealthy and unanimous investor,” – says Landmanis.

He notes that a German investor was found in 2007. This investor had given an impressive amount of money to SIA Ventspils ENERGO, while the municipal representative performed performed material contributions to revalue assets (artificially increasing their value) in the form of city land and questionable equipment.

“Some well-known Ventspils gardener had participated in the “blowing” of the city’s investment value. Under this person’s management, the value of “scrap” had gone up dozens of times. The investor was thereby confused by the defrauded balance of SIA Ventspils ENERGO and then SIA Ventpils Siltums, which is a punishable offence in its own right,” – reveals the former official.

Everything went as planned in the beginning. Germans were ready, because they had no idea they had been given a cat in the bag. “Unfortunately, the possible scheme of the municipality continued in the beginning of 2009, when the base capital of SIA Ventspils ENERGO was increased and shareholders were required to invest additional funds. Germans once again provided monetary investments, which was a total of 3 million LVL by then. The municipality’s representative invested one more piece of land, buildings and equipment, the value of which SIA Ventspils ENERGO reduced significantly in the next several months, writing off approximately 1.3 million LVL from the municipality to then the investors of slightly more than 3 million LVL,” – notes Landmanis.

According to Landmanis, it did not end there. “Chimneys” were written off for 1.2 million LVL more, assets created using German money (documentation, etc.), which now has the worth of wastepaper. After this move of the municipality, Germans understood that they were, possibly, robbed and that the project is doomed to fail utterly.

The mayor of the city indirectly confirmed some of the aforementioned facts in one of his interviews, mentioning that “the municipality had invested in some old boilers”, and lost nearly 50 million EUR of Europe’s allocated funding by failing the TEC project.

A full interview with the mayor can be found here (starts from 09:50).

The fact that the investor was chosen without the mayor’s consent could have played an important role in the project’s failure, because it is traditionally accepted that an investors should be in “friendly and mutually beneficial” relationships with the master of the city.

Then, in order to hide the consequences of the project’s failure, SIA Ventspils Siltums was forced to buy the failed project and somehow integrate SIA Ventspils ENERGO with all its worthless “old boilers” into SIA Ventspils Siltums, notes Landmanis.

“We are being told that the municipality never lost a thing, that it even managed to make a profit. Someone probably profited from this, yes. But we, the heating consumers, are the losers here. We still pay for the expensive crude powered heating energy, while the more farseeing municipalities have long since adopted cheaper heating resources. Right now, the remaining woodchip fuelled boiler construction project is being realized in order to avoid the collapse of the heating system. We are paying for the failed TEC and lost Europe’s millions, without receiving cheaper heating energy in return.

We are also paying for the “scrap” from the TEC, which was integrated into SIA Ventspils Siltums by the “professional” managers of our city by automatically including it in the tariffs. The price of the worthless “scrap” left from the TEC was to be written off. Again, we are the ones to pay. We are required to pay for the consequences of the massive robbery of SIA Ventspils Siltums (more than 400 000 LVL),” – says Landmanis.

According to him, it be safely assumed that the European million will surely be lost. Heating energy consumers will continue to pay for the failed modernization of boiler heated houses, the failed TEC project, the worthless super expensive assets of SIA Ventspils Siltums and other consequences of poor municipal management.

“The fact that everything could have been different is shown by the letters that were sent to the officials of the city council by energy specialists some years ago. It was stated in these letters that heating tariffs would be required to be increased if nothing is done to change the heating system. Unfortunately, our ruling politicians act as though they are deaf,” – concludes Landmanis.

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