The decision was made by the LPA council at the meeting Feb. 11 during which the agency's board reported on compliance with the privatization terms.
Representatives from Ominasis Italia, the company that had bought the Kemeri health resort, advised the LPA that $3.6 million had been invested in the facility so far. Thus, the investment requirements under the privatization agreement have been met, they claimed.
No official documents, confirming such investments in the development of the health resort, have been submitted, said the LPA.
The LPA board members told the council that Ominasis Italia management intended to visit Latvia March 10. Therefore it will be better to wait with the agreement termination until early March to ascertain whether the required invesments had been made or not.
LPA control department director Arvis Freibergs said that Ominasis Latvia in its letter complained of the red tape in Latvia that resulted in material delays in settlement of various formalities related to renovation of the buildings.
Feb. 19 is the deadline by which Ominasis Italia has to invest first 2 million lats from the required toal investment of 10 million lats to be contributed to the health resorts' development over five years.
Several experts from Ominasis Latvia, the company founded by Ominasis Italia in Latvia to acquire Kemeri, as well as Ominasis Italia owner Omar Saleh Al-Hamdy are expected to come to Latvia in early March.
During this visit the final decision will be made about the winner of the tender for renovation of the health resort and the beginning of restoration works. Thirteen Latvian construction firms and a security systems company have submitted their proposals to the tender.
When the state-owned Kemeri was put up for the auction, Ominasis Italia company was the only bidder and on Aug. 25, 1998, signed an agreement with the LPA about the health resort's privatization.
Kemeri was sold for 900,000 lats ($1.525 million) to be paid 20 percent in lats and 80 percent in privatization vouchers over a period of three years.
Ominasis Latvia is required to invest in Kemeri development 10 million lats within five years, starting February 1999.