VILNIUS - The first series of negotiations on a new nuclear power plant started this week in Warsaw in a strained atmosphere as officials from Lithuania stated that the Baltic state should be granted a larger equity stake in the project.
Previously the four sides to the $2.5 - $4 billion plant 's Estonia, Latvia, Lithuania and Poland 's agreed to share equal stakes, but now Lithuanian energy officials and politicians are of the opinion that Lithuania, where the new plant will be built, deserves a larger stake due to the extra responsibilities it will shoulder 's safety, waste storage and infrastructure maintenance.
Lithuania's Baltic neighbors reacted skeptically to the idea.
Latvian Foreign Minister Artis Pabriks said on Jan. 5 that all three countries should have equal stakes in the new nuclear power plant. However, he did not rule out a change of position based on Latvenergo's analysis of the many proposals surrounding the project.
Latvenergo, Latvia's energy utility, is one of the four power companies that have agreed to implement the massive engineering project. The others are Estonian Energy, Lithuanian Energy, and Polish Power Grid (PSE).
Estonians also criticized the notion of a larger Lithuanian stake. An Eesti Energia (Estonian Energy) official told the Lietuvos Zinios paper that such talk was destabilizing and that Lithuanian politicians should not interfere in the project.
At the same time, Urmas Soorumaa, chairman of the company's supervisory board, said on Jan. 3 that the Lithuanians' wish was understandable, but their timing questionable. "It is strange of them to wake up midway in the game," he told the Baltic News Service.
Soorumaa added that Lithuanians' behavior was not surprising in that they "have made decisions in the past not keeping with good business practices."
The chairman seemed to allude to an incident several years ago when Estonian Energy's participation in the privatization of part of Lithuania's power grid was suddenly cancelled despite a favorable bid.
At the time, the then Prime Minister Algirdas Brazauskas said that lack of clarity surrounding Estonian Energy's "future ownership structure" disqualified it from the high-profile privatization, though the Lithuanians failed to tell the Estonians this from the get-go. As a result, Estonian Energy lost tens of thousands of dollars participating in the sell-off, and a firm related to Lithuania's VP Market went on to acquire the electricity grid.
Speaking on the eve of the talks in Warsaw, Lithuanian Prime Minister Gediminas Kirkilas defended the proposal and warned that negotiations would be tough.
"It is natural that specialists and politicians raise the issue of a larger share for Lithuania," he told Ziniu Radio on Jan. 4.
"It will be a subject of negotiations, which, I believe, will not be easy," Kirkilas said, adding that the inclusion of Poland in the project was in itself a major hurdle in negotiations.
Originally the three Baltic states agreed last year in Trakai, Lithuania, to build a new atomic power plant that would replace Ignalina Nuclear Power Plant when the latter's second reactor is shut down in 2009. Each country would have a one-third stake in the venture.
But once Poland hopped on board in December, the four sides came to a preliminary agreement for an equal, four-way split.
The Baltic region relies heavily on Lithuanian-produced power, and when Ignalina is dismantled the country will have to import kilowatts. And with EU member countries increasingly jittery about continued dependence on Russian energy, there is a movement to build up production capabilities.
Already the Estlink power cable that connects Finland and Estonia under the Gulf of Finland has been set up and is now online, and Poland and Lithuania have agreed to connect their energy grids over the next few years.
But while distribution is key, production is crucial. The Baltic states are confident that they could handle financing of a single new reactor, but with Poland on board, there is now talk of building a two reactor, 1,600 megawatt facility for approximately $4 billion.
Construction will take at least seven years.
