Estimates on the costs vary. A press release sent to TBT from the World Bank says this entire project will cost $138.1 million. A document from the Riga City Council says the project will cost $79.96 million.
Andris Boze, operations manager at Latvian heating company Rigas Siltums, said the project will receive $5 million from the City Council, $50 million from Rigas Siltums, $26 million from Swedish help organization SIDA, $36.2 from the World Bank and $17 million from a local bank.
"It is not decided yet which local bank it will be," Boze said.
Adding these figures brings the price tag to $134.2 million which is $3.9 million short of the World Bank's estimate. No one in Latvia's WB office has been available for comment.
Maija Rubina, chair of the committee on communal and apartment issues in the Riga City Council, said the whole project will cost $79.96 million.
"Inhabitants will pay for the installation of substations," Rubina said. "Over the coming 10 years $48.2 million will be paid by inhabitants."
According to plans, 7,235 buildings in Riga will get heating substations installed. People living in these buildings will see a raise on their rent by $0.04 per square meter for the next 10 years. Then they will own the substation and rent will go down to where it was before the raise.
"The course of the project is based on the interest of inhabitants in Riga," Rubina said. "We already feel the impact of this project. Social assistance in Riga has been put together with this project."
Changes in the social system say that inhabitants who cannot pay the price for heating will get aid from the City Council.
"This system does not apply to those who refuse to pay," Rubina said. "They will be taken to court."
Heating costs in Riga have remained the same over the last three years, and will, according to a City Council decision, continue to stay where they are for the coming three years as well.
Rubina said keeping the price for heating in Riga is the very essence of the heating project.
"We purchase heat from (Latvian energy company) Latvenergo's heating station," Rubina said. "The price is the same compared to producing it in our local stations," Rubina said.
However, Rubina said the World Bank pointed out, during a meeting earlier this summer in Washington, that Latvenergo's prices are wrong.
"For as long as the city is buying heat from Latvenergo, inhabitants have been paying too much," Rubina said. "We want to bring our heating standards to the same level as in the rest of Europe."
Boze said 49 percent of the joint-stock company Rigas Siltums is owned by the Latvian Privatization Agency, and that it has decided to privatize Rigas Siltums.
"LPA has not decided how to privatize Rigas Siltums. It is very difficult to understand," Andris Boze, operations manager for Rigas Siltums, said. "I think there are three or four different ways to do it."
Andrejs Tiknuss, director of the privatization process department, said Rigas Siltums already is partially a private company. However, since privatization of Latvenergo fell through in Parliament, there are no actual present plans for the heating concern's privatization.
"We will not touch this problem in the nearest future," Tiknuss said.