Law on nuclear plant down to nitty-gritty

  • 2007-05-30
  • By TBT staff
VILNIUS - Lawyers have warned that a bill on the planned nuclear power plant in Lithuania lacks safeguards to prevent foreign capital of unclear origin or local business tycoons from participating in the project.

Experts from the Lithuanian Institute of Law, after having analyzed the bill, pointed out flaws in the document. Primarily the bill contains nothing to prevent a takeover of the privately-owned power utility VST, the western half of the Baltic state's power grid that was privatized in 2004 and that, by virtue of its integral position in the industry, will have a stake in the new plant.
"The bill does not set out any restrictions as to the above situation, that is, gives no control over a sale of the shares," the experts wrote in the report.

The report was sent to the parliament's legal affairs and economics committees.
Deloitte Lietuva, a business consultancy, is currently performing an independent expert evaluation of the bill.
The Special Investigation Service and the European law department under the Justice Ministry will also conduct an assessment of the bill and report their conclusions to Parliament.
VSE is majority owned by NDX Energija, a private company that is mainly controlled by shareholders of VP Market.
Currently the ownership model of the new nuclear plant does not exclude the possibility of non-Lithuanian capital or entrepreneur taking control of NDEX Energija in the future, according to the report.
The bill, which needs to be signed into law in order to begin financial and construction operations, envisages that Lithuania will own a 34 percent stake in a joint venture that will operate the plant. The other three partners'sLatvia, Estonia and Poland'swould hold 22 percent each.

Lithuania plans to merge three energy companies 's Lietuvos Energija (Lithuanian Energy), Rytu Skirstomieji Tinklai (RST) and VST 's and create a single mega-utility that would act as a national investor in the project. Lietuvos Energija and RST are controlled by the state. The state would hold at least 51 percent interest in the merged entity.
Recently Lithuanian officials said that Poland was stalling on the inter-state power link since the neighboring country first wants guarantees that the nuclear power plant will be built. For Poland, there is no sense in connecting the two countries' grids if there is no opportunity to import Lithuanian kilowatts in the foreseeable future.