Kemeri spa privatization stays in force

RIGA (BNS) - The Latvian Privatization Agency council on March 10 decided for the time being not to terminate an agreement with Ominasis Italia about privatization of the Kemeri health resort located not far from Riga.

The LPA council made this decision after a report from Ominasis Italia management on actions taken to renovate and reopen the spa.

It was noted that the Italian company had failed to meet some of the terms under the privatization agreement, including the required investments.

Therefore the LPA board was ordered to monitor further performance of the privatization agreement and report to the council on monthly basis.

LPA council chairman and Economics Minister Vladimirs Makarovs warned that the agreement will be terminated in case of non-compliance with the investment requirements.

The LPA director general Janis Naglis said he will propose to amend the agreement by including more strict provisions on investments.

If the Italian company rejects the proposal, the LPA board will feel compelled to ask the council to terminate the agreement, Naglis added.

At the meeting March 10, Ominasis Italia said they had spent more than $3 million on survey and design development as well as marketing, although the money had not been invested in the renovation of the health resort.

They said another two or three months were required to complete the technical documentation and obtain the required approvals.

The Italian businessmen said that Italian construction designers had spent eight months working on the Kemeri project, but then it turned out that the project required approvals by competent Latvian authorities.

Kemeri was sold for 900,000 lats ($1.53 million) to be paid 20 percent in lats and 80 percent in privatization vouchers over a period of three years.