Finally, a breakthrough in Lithuania

  • 2008-02-06
  • By TBT staff

VILNIUS - Lithuania's maligned nu-clear power project underwent several major breakthroughs over the past week, particularly after a divided Parliament managed to pass a series of amendments to the nuclear power law that allows for private capital to participate in the project.
The amendments were crucial since the original law, passed in June last year, called for the state to be the exclusive owner and operator of the new plant, which will cost billions of euros and could take a decade to build.

Still, the move kick-started the nuclear power project, which was first announced exactly two years ago and is months behind schedule.
On Feb. 4, three days after Parliament adopted the amendments, the nation's utility company announced a Finnish-Lithuanian team that will conduct the environmental impact study, a six-month long investigation that will essentially determine what kind of reactor and output capacity the new plant will have.
And on the same day the economy ministers from the four countries participating in the project 's the Baltic states and Poland 's agreed to speed up the project's implementation. Though largely symbolic, the agreement was key since for months Estonia, Latvia and Poland have stood by and watched as the project became mired in political and legal wrangling in Vilnius.

The amendments, passed Feb. 1, call for the government and NDX Energija, a private firm, to complete talks on forming the "national investor company" 's or Leo LT.
The national investor company will be responsible for implementation of not only the nuclear power plant but key infrastructure projects such as grid connections with the European energy system, without which a new plant would not make sense.
Previously the government and NDX Energija, which fully owns the western half of Lithuania's power grid, agreed that the state would control 61.7 percent of Leo LT, while NDX Energija, created by the owners of VP Market, the largest retailer in the Baltics, would own the remaining 38.3 percent.

Although the government will own a majority stake in Leo LT, it will not have the requisite two-thirds necessary to pass major decisions within the company. This gives NDX Energija additional leverage, a point that stuck in the craw of many Lithuanian MPs and sparked ferocious criticism of the project both from the opposition and within the tenuous ruling coalition.
Sixty-three MPs voted in favor of the amendments, 11 against and three abstained.
Voting was boycotted by the opposition Liberal Democrats, the Liberal Movement, Liberal Centrist Party and the Conservatives.

The negotiations were repeatedly criticized for lack of transparency by politicians and experts in the area.
"I would like to criticize the very principle that, unfortunately, negotiations with only one private investor were launched, although it was clear that other private investors are also interested," Gitanas Nauseda, SEB Vilnius bank deputy president, told the Delfi news portal.
Some observers claimed the law does not provide sufficient guarantees that the national investor really will build the new power plant or that private investors do not abandon the project prematurely.
"One of the biggest mistakes is the lack of guarantees that most important strategic projects will be implemented," Conservative leader Andrius Kubilius said Jan. 28.
He suggested postponing parliamentary deliberations, returning to negotiations and changing the weak points in contracts.

But Parliament was under intense pressure to act. Prime Minister Gediminas Kirkilas had cancelled a planned trip to Afghanistan to ensure that lawmakers tackled the amendments. Those who were perceived stonewalling the process were reportedly attacked.
One coalition MP, Algimantas Matulevicius, head of the parliamentary National Defense and Security Committee, became so frustrated with the mounting pressure that he resigned on Jan. 29, saying the nuclear law was one of his motives.
"I will be able to talk about bad things openly from now on," noted the Civil Democrat head of the Committee.
Parliament initially refused to accept his resignation, and Matulevicius agreed to remain in his post on the next day, Jan. 30.

Kubilius and other MPs urged President Valdas Adamkus to veto the amendments.
"The negotiations were not transparent, and the government has failed to defend public interests," he told a press briefing on Feb. 4.
Kubilius noted that if Adamkus does not veto the amendments, this will be a signal to entrepreneurs that they can get away with anything and the public will see the state as "an obedient servant of private capital."
The president has ten days to sign or veto the law after it was presented to him Feb. 4.
Social Democrats, who are an arch-enemy of Kubilius, threatened the Conservative leader with interpellation for allegedly dragging out deliberations on the nuclear plant law on Jan. 31 during a parliamentary meeting that he had chaired. 

A few NGOs filed a petition calling for a referendum on the nuclear power plant law. The petition was signed by over 6,000 residents.
Meanwhile, the Social Democrats fended off the criticism by saying that the project was behind schedule and foreign partners were growing impatient.
The topic of a new nuclear plant also came up at a Feb. 4 meeting of Baltic and Polish economy ministers in Vilnius. The ministers issued a joint statement reaffirming the importance of the Ignalina nuclear facility in supplying the region with energy and their countries' interest in implementing the project.
The ministers also expressed hope that the amendments would speed up project development.
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