Karins sacks director of development agency

  • 2006-03-29
  • Staff and wire reports

TONGUE TIED: Ozols is stuck on what to do with the applications submitted to LIDA and how to explain the situation to those businesses.

RIGA - What began as mere bureaucratic disorder 's the Latvian Investment and Development Agency's almost comically inefficient method of distributing EU structural funds 's this week developed into a minor government crisis as Minister of Economy Krisjanis Karins released LIDA Director Andris Ozols from his duties on March 23.

The decision came after the Economy Ministry received complaints from eight businesses accusing LIDA of manipulating the line-numbers given to individuals who stood outside a government office last week to submit applications for EU funds.
In Karins' words, the businessmen claimed that several applicants entered LIDA's office with a number different from the one attached to their submitted project. Also, there were gripes about LIDA suspending the submission process for an hour.
"These are serious allegations that cast a shadow over the entire procedure," Karins said. "If there were violations in the line procedure, then one could assume there might also be violations in evaluating the projects, too."

An investigation has been launched into the complaints, Karins said, emphasizing that the investigation would be thorough and that information has been turned over to the anti-corruption bureau and law enforcement authorities.On March 17, applicants began lining up outside LIDA's office doors, eager to receive their share of funds from the EU program on support for modernizing an enterprise's infrastructure. The situation soon turned chaotic, and on March 20, police officers were forced to set up barriers around the disgruntled crowd.

Two days after the ordeal, the president voiced sharp words of reprimand: "Economy Minister Karins might as well have driven down K. Valdemars Street, throwing bank notes out the window." Karins, however, was also dismayed by the process, describing it as "unacceptable" and demanding that "the system must be brought to order." In addition to blaming Karins for the imbroglio, Kalvitis criticized LIDA for "unexpectedly halting the acceptance of applications on [March 20]."

Defending LIDA, Ozols said that if applications were still to be accepted after the total amount of funds available was reached, a decree would be necessary from Karins. He added that the ministry was "searching for guilty parties" and unjustly blaming LIDA. When asked who was responsible for the disorder, Ozols said the situation was a result of poor political planning on the part of the ministry. The additional 50 million lats proposed by the government was obviously too small to satisfy business demands, he specified. For the time being, the director is scratching his head over what to do with those projects already submitted, and what to tell applicants.Some 169 projects for infrastructure funds were turned in on March 20, and six more the next day.