Calls grow for shipping to stay local

  • 2001-03-08
  • Rokas M. Tracevskis
VILNIUS - Algirdas Brazauskas, chairman of the opposition Social Democratic Party, called for further consideration of local interests during a discussion on the pending privatization of the Lithuanian Shipping Company on Feb. 27 that included many of the country's leading businessmen.

The Lithuanian government wants to sell Lithuanian shipping to the Danish shipping firm DFDS Tor Line, which has drawn criticism from some local businessman and politicians.

On March 1 the heads of the Lithuanian national road carriers' association Linava said that they would like to buy the company.

"There is no doubt that the Lithuanian Shipping Company should be privatized. Just as important is that our road carriers association Linava and Lietuvos Gelezinkeliai Lithuanian railways should be taken into account," Brazauskas said.

However, he did not comment on the negotiations between the Lithuanian State Property Fund and DFDS Tor Line.

Linava representatives said that the sea route to the West is very important to them.

Bronislovas Lubys, president of the Lithuanian Industrialists' Confederation, said that there are no alternatives to the privatization of the Lithuanian Shipping Company. At the same time he said that Lithuanian officials have courted foreign investors too heavily during the privatization of large companies in Lithuania.

Estonia should serve as an example because it gave more preference to local business during the privatization process, according to Lubys.

"Of course, a foreign partner is also necessary, because the shipping company is interested in foreign markets," he said.

Lithuanian businessmen's calls to take part in the privatization of the Lithuanian Shipping Company did not sway Ona Jukneviciene, the adviser on privatization issues to Prime Minister Rolandas Paksas.

"Of course, Lithuanian businessmen have money for privatization of the company, but we need an experienced strategic partner who knows foreign markets," Jukneviciene said, defending her position to choose DFDS Tor Line as the strategic partner.

The government says that its shipping company will be privatized by May.

If Linava's' request is rejected, the association would like the government to announce a new tender for the company's privatization. Linava has about 80 percent of all vehicles licensed for international freight transportation in Lithuania.

Egidijus Kairys, managing director of Linavos Servisas, a Linava subsidiary, said Linava is ready to offer to pay the state no less than the price offered by the DFDS Tor Line and invest more than the Danish firm.

The Lithuanian State Property Fund wants to sell 76 percent of the Lithuanian Shipping Company's shares, which should cost about 200 million litas ($50 million), according to Linava secretary general Valdas Gylys.

About 20 percent of the company belongs to small shareholders.

Algimantas Kondrusevicius, vice president of Linava, doubts the legality of the negotiations between the State Property Fund and DFDS Tor Line.

He said that the consortium B.B. Bredo B.V. won the tender to privatize the shipping company but failed to meet financial obligations and was forced to withdraw. DFDS Tor Line was one of the members of the B.B. Bredo B.V. consortium.

Kondrusevicius said that a new tender would help alleviate any controversy.

He also said that Linava would not object if the government decided to sell its shares in the Lithuanian Shipping Company as separate blocks to DFDS Tor Line, Linava and other Lithuanian companies interested in the sell-off process.

Linava's representatives said their sole interest was the Lithuanian company's ferry business. The ferry lines guarantee Linava an alternative route to Western Europe besides the land route through Poland.

Poland issues too few licenses to international freight carriers, according to Linava representatives.

"Now some 70 percent of all income of the shipping company's ferries comes from Linava's TIRs," Kondrusevicius said.

He added that Lithuania has had bad experiences with Western "strategic partners," referring to privatization in oil and telecoms.

On March 1, President Valdas Adamkus met with representatives of all the parliamentary factions.

"The president urged the preparation of laws to stop any Lithuanian or foreign investor from dominating the strategically significant economy sectors," said Adamkus spokesman Violeta Gaizauskaite.

On March 1, the parliamentary faction of the Social Democratic Coalition wrote an open letter to Adamkus, Paksas and Parliament Chairman Arturas Paulauskas calling for more openness in the privatization of the Lithuanian Shipping Company and requesting that Linava's interests be taken into account.