Minister opposes city heating 'privatization'

  • 2010-03-04
  • From wire reports

RIGA - Minister of Economy Artis Kampars (New Era) says that he could turn to law enforcement authorities over the Riga City Council officials’ activities aimed at taking over the state/municipal Riga heating supply company Rigas siltums (RS), reports Kampars finds it unacceptable that the Riga City Council officials are pushing for RS takeover by establishing a joint venture with the company Dalkia, which is to be headed by a Dalkia representative, says the minister’s press secretary Sandris Sabajevs. If this scheme goes through, Kampars threatens that he will consider turning to the authorities.

Kampars points out that the scheme is a ‘back door’ way for Dalkia to privatize RS, leaving the government without any right to influence operations at Latvia’s largest heating supply company. “Why would the Riga City Council own just 51 percent, or even 49 percent in the joint venture [with Dalkia]? Does this mean that the remaining shares would belong to Dalkia, and the company’s influence at RS would increase significantly?” said Kampars. “We have to remember that currently, Dalkia owns just 2 percent of RS.” If the scheme proposed by the Riga City Council and Dalkia is successful, it will create a modern-day precedent of ‘back door’ privatization under everyone’s nose,” he warned.

The Riga City Council is to receive 14 million lats (20 million euros) for establishing the joint venture with Dalkia, which also strongly suggests that a ‘back door privatization attempt’ is pending, worries Kampars. He continues that there were no arguments proving that increasing Dalkia’s influence within RS would be in Rigans’  best interest.

Dalkia has stated publicly that, after its influence increases at RS, it would invest 100 million lats into the development of the individual heating supply system in Riga. But the question then is why has Dalkia not done this in Cesis or Valmiera, where it already is a key shareholder in the local heating supply companies, stressed Kampars.
At the moment, Riga City Council has a 49 percent stake in RS, Dalkia City Heat (Dalkia), 2 percent, the state of Latvia has 48.995 percent, and the state-owned power utility Latvenergo controls 0.005 percent.

The Riga City Council’s Housing and Environment Committee recently said that the Riga City Council and Dalkia would set up a joint venture to take control of RS. The Riga City Council would own 49 percent, or 51 percent, of the to-be joint venture, and it would be headed by a representative of Dalkia.