RIGA - A final agreement on creating a new national utility company that would operate the proposed nuclear power plant has hit another enigmatic stumbling block, and the key private investor in the deal has threatened to pull out altogether.
An April 9 meeting of the supervisory council of the utility, Leo LT, was canceled at the last minute "due to the large volume of paperwork involved," according to Nemira Pumprickaite, an aide to Prime Minister Gediminas Kirkilas, who chairs the council.
She said council members needed more time to review the 100 or so pages in the draft and that the meeting would likely take place this week.
The Economy Ministry submitted draft agreements between the government and private-equity NDX Energija to the Cabinet on April 4.
However, Ignas Staskevicius, chairman of NDX Energija, said he believes that the government was procrastinating due to reported opposition to the deal within the Economy Ministry.
Under the draft agreements, the government would hold 61.7 percent of shares in Leo LT, while NDX Energija would own 38.3 percent. The state would contribute its shares in Lietuvos Energia, Lithuania's national power company, and RST, a grid operator to the deal, while NDX Energija would bring VST, the second of the country's two grid operators.
The new company will serve as an investment vehicle for Lithuania's ambitious nuclear energy project 's a 3,200 megawatt plant to be built near the existing reactor in Ignalina 's and planned links to grids with Poland and Sweden.
However, the creation of Leo LT is wildly behind schedule 's by a year, some say. NDX Energija, a firm controlled by owners of the retail giant Vilniaus Prekyba, the largest retailer in the Baltics, has even said that its agreement with the government may have to be renegotiated.
The company does not rule out pulling out of the Leo LT project altogether, according to the Delfi news portal.
"Preparations for this transaction have been underway for almost a year now. Time is dictating certain circumstances that could force us to exit the project or to return [to the negotiating table]," Delfi quoted Staskevicius as saying.
He noted that Leo LT should have been established by the start of the year.
"We see that the process is running behind schedule. VST has been increasing its value since all three companies [Lietuvos Energia, RST, VST 's ed.] were appraised," he said.
"As to the other two companies, there are certain questions, but we may not have all the information. If it takes too much time, the question will naturally arise if we can base our transaction on those values," Staskevicious said.
He added that the Poles, Latvians and Estonians have all commented on how the delays have hamstrung the project.
One of the biggest delays is politics as usual. In Staskevicius' words, the recent no-confidence motion against Prime Minister Gediminas Kirkilas, which failed, was another reason for the delay in finalizing the establishment of Leo LT.
The government indeed seems to have botched much in the process. Kirkilas, for instance, was quoted as saying on April 7 that the council meeting would take place. Yet when push came to shove, the prime minister blamed the opposition for the delays.
"If everything was being done according to proposals made by the government, and there were no delays by the Seimas [parliament] and opposition, involving its entire arsenal of public relations and such, the decision would have been made a long time ago," Kirkilas told journalists April 7.
He even said that the opposition discussed the deal with "foreign agents" first.
"This arsenal was not put to rest for a single day, and even foreign agents were addressed, as is typical of our opposition," Kirkilas said.
Earlier on April 1 the prime minister admitted that the charter documents for Leo LT might require additional amendments.
"The supervisory committee will have to make sure that all agreements between the state and the private investor [Leo LT] have been initialed properly and authorize the Economy Ministry to sign the documents or make additional amendments thereto 's the decision should be like that," Kirkilas was quoted as saying.
Meanwhile, more commotion involving Leo LT arose in late March after a report in the Economist Intelligence Unit, the influential weekly magazine, throwing doubt over the company's usefulness. The report claimed the creation of such a company was costly and ineffective.
Even more damning, EIU claimed the government silenced critics of the deal, a tactic reminiscent of the Soviet days.
Coming from such a prestigious publisher, the claims hit Lithuania like a small bomb and put the government on the defensive. Kirkilas had to appear before Parliament to offer explanations. The media took to investigating who the EIU analyst had contacted in government to find out about Leo LT.
Staskevicius said that if Leo LT got off the ground it would be short of funds since all three subsidiaries are unlikely to pay it any dividends, which at present is the only source of funding available to the company.
