Vilnius authorities approve heating sector overhaul tender

VILNIUS (BNS) - Vilnius authorities have given the green light for a tender to work out a project to modernize and attract investments of centralized heating and hot water supply system in the Lithuanian capital city.

A key condition is that the modernization project should not

involve heating price hikes.

The board will decide what method of attracting investments should be applied. One option is privatization of heating company Vilniaus Silumos Tinklai, but the municipal company has many debtors and its management needs to be revamped to bring it into line with EU standards.

Specialists at the municipal Energy and Economy Department say, however, the privatization will only bring a short-term benefit, if any, as the city cannot expect a high price for the company, while heating tariffs will inevitably rise. They propose that the city choose an operator for the heating sector, and retain the right of ownership.

The World Bank together with Swedish consultants have offered to invest $60 million in the heating system of Vilnius within three to five years.

The municipality is yet to decide whether to take the loan, repayable by the year 2017.