Siemens receives $4 million for cost override

  • 2000-01-27
RIGA (LETA) – The Ministry of Internal Affairs transferred $4 million to the German concern Siemens for setting up communication facilities on the eastern border of Latvia, Finance Ministry's spokeswoman Baiba Melnace said.

The money was transferred at the end of 1999, without waiting for the state control offices report on how the decision would comply with the interests of the state.

On Jan. 1, state control announced that it had not yet started to check on the feasibility of the deal.

Inga Baltina, advisor to the state controller, said then that taking into account that Internal Affairs Minister Mareks Seglins' request had been received at the end of the last year, the check could not be included in state control's calendar. State control also decided that "the ministry can settle the issue itself."

Earlier it was expected that state control would carry out the check in about one month.

Seglins' request was aimed at checking various rumors and possible speculation on the money transfer.

Siemens already completed the work noted in the first agreement, and had received payment. The second agreement was signed in May of 1999, and the work is under way. No payment had yet been transferred by December.

The ministry believes that transferring $4 million to Siemens is not crediting, and that the payment complies with state interests.

On Dec. 15, amendments to the second agreement with Siemens were approved, stipulating that the agreement's amount be raised to $5.3 million. This was explained by an increase in the work load.