Opposition failed to impeach energy minister

  • 2011-03-16
  • By Rokas M. Tracevskis

MIRAGE: Perspective of the new nuclear plant’s construction near the Lithuanian town of Ignalina, to replace this already non-functioning nuclear plant, is still rather misty.

VILNIUS - On March 10, the Lithuanian parliament opposition’s attempt to impeach Energy Minister Arvydas Sekmokas failed. The result, after the parliament’s discussions with the participation of Sekmokas, was as follows: 66 MPs voted stating that they are satisfied with Sekmokas’ answers, while 53 MPs expressed their non-confidence in the minister and nine MPs abstained. Before the discussion, Prime Minister Andrius Kubilius stated that it is symbolic that on the eve of the national holiday of March 11, marking re-establishment of Lithuania’s independence in 1990, a battle is held in the parliament for the country’s energy independence. Sekmokas is presented by Kubilius as an active fighter against Russia’s domination on the local energy market.

On March 10, visiting Trakai, President Dalia Grybauskaite also expressed her support for Sekmokas and his work for the energy independence cause. Grybauskaite also said that she supports Kubilius, although, according to LNK TV, she had talks with Kestutis Masiulis, MP of the ruling Homeland Union – Lithuanian Christian Democrats, asking him if he would agree to take the post of prime minister. Masiulis has the fame of being honest and non-corrupt. He neither denied, nor confirmed the LNK information.

The main accusations in the parliament against Sekmokas were related to the failure of the competition over construction of the new Ignalina nuclear plant and his battles against Russia’s Gazprom, which has caused the highest price for gas for Lithuania among all the EU states. Sekmokas is also accused of not paying enough attention to green energy resources, such as wind energy and biomass. According to Raimondas Kuodis, director of the department of economics at the Lithuanian Central Bank, Lithuania could almost completely refuse to use natural gas, replacing it with biomass, but the big cities’ municipalities, made up of all political colors, prefer to use gas for central heating, which is more expensive for residents, probably due to the gas-related companies’ lobby. During the debate over impeachment in the parliament, Sekmokas said that Lithuania will hold to its obligation to the European Commission, i.e. 23 percent of all energy production from renewable sources by 2020. However, he was not talkative about this in the parliament – the nuclear and gas lobby is much stronger than the lobby for alternative energy sources in Lithuania.

At the end of last year, the South Korean company KEPCO withdrew its bid from the competition in Lithuania. KEPCO was expected to become a strategic investor in the nuclear plant construction, which is a joint Lithuanian-Latvian-Estonian-Polish project where Lithuania will have a 34 percent share and the strategic investor, which still has not been found, probably over 50 percent. While Lithuania was slow in acting, plans for new nuclear plants were announced by Belarus and Russia. The latter, contrary to just talk by Belarus, has already started some infrastructure work for the nuclear plant construction in the Kaliningrad district. Poland also announced plans to build its plants, but this is not viewed seriously in Lithuania because Poland has neither infrastructure, nor experienced specialists capable of working in nuclear plants.

Now Lithuania’s Energy Ministry claims to have direct talks with unnamed potential strategic investors, possibly with KEPCO as well. There were some suggestions from the Lithuanian government about possible negotiations with Japan’s nuclear plant construction companies – it remains to be seen how the recent nuclear accidents in Japan will influence the further activity of these companies. During the impeachment attempt in the parliament the opposition showed its incompetence on this issue - Vidmantas Ziemelis, head of the Christian Party faction, even talked about KEPCO as a “North Korean company.”

A week before the impeachment attempt in the parliament, Sekmokas issued an ultimatum to Gazprom: he gave the Russian gas giant 60 days to equalize the gas price for Lithuania with Russian gas supplies for Estonia and Latvia, which are 15 percent cheaper. If Gazprom will not start negotiating with Lithuania in Brussels over a fair price, Lithuania will appeal to the Arbitration Institute of the Stockholm Chamber of Commerce seeking to annul the results of privatization of the company Lietuvos Dujos, Sekmokas said. Lietuvos Dujos operates transmission and distribution pipelines.

The company was privatized in two stages. Through public tenders major international energy companies became its shareholders: in 2002, the consortium of Ruhrgas AG and E.ON Energie AG (Germany) acquired a 34 percent stake in Lietuvos Dujos (presently the shares are held by E.ON Ruhrgas International GmbH) and in 2004, the Russian natural gas supplier Gazprom acquired a 34 percent stake in the company. Sekmokas says that Gazprom buying shares created an obligation to supply gas at a “fair price.”

The Lithuanian government plans to renationalize Lietuvos Dujos anyway, implementing the EU’s Third Energy Package, which requires a separation between the operations of gas transmission networks from supply. Lithuania is the first EU country to renationalize Gazprom’s property – Finland, Estonia and Latvia asked the European Commission for permission to postpone implementation of the package’s requirements and, therefore, became well-behaving countries in the eyes of the Kremlin, which sells them gas cheaper than to Lithuania because of it.

During the impeachment attempt, the Lithuanian opposition MPs were stating that implementation of the Third Package could be postponed until Lithuania got an alternative supply via a newly built liquefied natural gas terminal on the Baltic shores.
“Latvians, Estonians and Finns got permission for postponement. We did not ask for it. I was told in Brussels that even now we can get such a postponement,” Labor MP Kestutis Dauksys said, attacking Sekmokas.

“The negotiations are necessary, not war against Germany and Russia,” shouted Social Democrat MP Birute Veisaite. She described Sekmokas’ actions as “expropriation of the property of E.ON and Gazprom,” thus literally echoing the words of Russian Prime Minister Vladimir Putin on his recent visits in Germany and Brussels. She also urged the replacement of Sekmokas with his party colleague, Agriculture Minister Kazimieras Starkevicius, who, according to Veisaite, has more diplomatic skills in dealing with Russia. Ironically, during the recent scandal over the illegal influences on public procurement, Starkevicius of the Homeland Union – Lithuanian Christian Democrats, was also mentioned in the media among wrongdoers, together with representatives from the Social Democrats, Order and Justice Party as well as the National Resurrection Party.

Unfortunately, Sekmokas’ name is also mentioned in the media in cases of suspicious public procurement. According to diena.lt, during the last two years, i.e. when Sekmokas already was a minister in Kubilius’ government, the computer programming company Labbis, where Sekmokas has a two percent stake, won public procurement competitions worth five million litas (1.4 million euros) and Labbis even had no competitors in most of these competitions.