VILNIUS - The Baltic states and Poland failed to sign a joint declaration on building a new nuclear power plant after Polish Prime Minister Jaroslaw Kaczynski failed to show up at a crucial meeting in Vilnius on July 6.
Snubbed by their Polish colleague, who cited domestic obligations for the last-minute cancellation, the Baltic prime ministers agreed to give the national utility companies the green light to proceed with negotiations on separate shareholder agreements.
The Baltic heads of government expressed varying degrees of disappointment that the Poles failed to show up but confirmed hope for a final, four-sided deal on building a 4 billion euro nuclear facility.
"It's a pity the Polish prime minister couldn't come, and there is no clear position on the political level of what the Poles think about this project," Latvian Prime Minister Aigars Kalvitis was quoted as saying.
"We'd like to see Poland prepared to make decisions because so far they have only shown the will, but not practical steps," he added.
Estonian Prime Minister Andrus Ansip, speaking to Estonian TV, said, "Of course it would've been better if the Polish prime minister took part in the meeting. We've firmly decided to continue the project."
Many suspect that the Poles are unhappy with the project, particularly after Lithuania's parliament passed a law fixing ownership stakes. Poland's conservative leadership may feel it deserves a larger stake and share of the responsibility in the project, and Polish lawmakers no doubt want to know more about Lithuania's law and each country's liabilities before the government signs any binding declaration.
Then again, it is often difficult to understand what's going on in the minds of Prime Minister Kaczynski and his brother, President Lech Kaczynski. As The Economist wrote in its latest edition, the two brothers "risk making Poland as Greece used to be: unpopular, expensive and, most dangerously, marginal."
The two are renowned for feistiness, and even snapped at the Baltics when they supported Vaira Vike-Freiberga's candidacy for the post of U.N. secretary-general last fall.
Lithuanian Prime Minister Gediminas Kirkilas, who met with Poland's leadership in March in Warsaw to discuss the nuclear project, defended the neighboring country. Kaczynski's no-show "is not an expression of a negative attitude, but was caused by objective reasons within the Polish government," said Kirkilas. "The Polish prime minister has confirmed that they are interested."
He did admit, however, that ownership is a tricky issue with the Poles. "They have raised this matter," Kirkilas admitted. In his opinion, the Poles, who first publicly expressed interest in the project in December, just needed more time to hash over the project, which will transform the Baltic energy market drastically.
A new meeting among the four heads of government has been tentatively scheduled for the fall.
Ansip and Kalvitis said that Estonia and Latvia are not as much concerned about ownership stakes as about the amount of power each country will receive and how the new plant's management board will be structured.
Otherwise, the Baltic leaders, who originally agreed on the project in Trakai at the beginning of 2006, are good to go. "There are no more obstacles for this project," Kalvitis said.
The first reactor of the new power plant is scheduled to be completed around 2015. The project could expand to two reactors, which would give the owners a total 1,600 megawatts to distribute.
In the near future Lithuania is expected to send its partners a formal invitation to participate in the project, as well as a preliminary draft of the shareholders' agreement, Ansip was quoted as telling the Baltic News Service.
He expressed hope that the four countries' power companies would conclude the shareholders' agreement before the end of this year.
Protection of minority shareholders in the project is one of the things which the final agreement must provide for, Ansip said. Also, certain corporate decisions, once the company that will run the plant is established, must be made on a consensual basis.
Asked whether the project would meet its 2015 deadline, Ansip said, "We shouldn't take a very pessimistic attitude right now. Let's hope future developments take place faster."
EBRD ready to finance 'bridge'
The European Bank for Reconstruction and Development said it might contribute finance to construction of the so-called power bridge that will connect Lithuania and Poland's power grids.
The power link is a crucial project for the Baltic states, which are eager to link their electricity systems with those of Europe, as well as for Poland, which needs the link in order to harvest output from the planned nuclear power plant that it will be building together with the three Baltic states.
Peter Reiniger, a EBRD business group director, was quoted as saying that the bank could discuss terms and conditions for financing the project once Lithuania and Poland have established a company for implementing the project.
According to preliminary estimations, the interconnection of power systems might cost approximately 304 million euros.
The European Commission has included the construction of a power bridge among the key energy policy projects of the European Union.
