Lithuanian state auditors block sale of Belarus debt again

VILNIUS - Shareholders of the Lithuanian state-run power utility Lietuvos Energija on April 26 failed to approve the results of a tender to transfer the right to claim payment of Belarus' debt for Lithuanian energy supplies, as well as the company's financial statements for 2000.

A representative of the Economy Ministry, which holds 86 percent of shares in Lietuvos Energija, voted against discussing the issues.

On April 24, the Lithuanian State Audit Office recommended that the Economy Ministry vote against a motion to name the Russian company Vangvard the winner in the tender to transfer the right to claim payment of $50 million in debt from Belarus' state energy company Belenergo. Five companies participated in the tender, which was announced last December.

According to the state auditors' report, the contract with Vangvard would exceed production and that the economic risks would jeopardize the interests of the state. The auditors also said that Vangvard's offer to recover Belarus' debt in 10 years would cause problems to Lietuvos Energija and Belenergo, which are slated for restructuring.

The state audit office also criticized the tender commission for inefficient work. During a commission meeting in early February, it was discovered that Vangvard's original bid did not meet some tender requirements, as the Russian company failed to present information about its experience and capabilities of performing financial and commercial operations in Belarus.

Lithuanian Prime Minister Rolandas Paksas on April 26 instructed the Economy Ministry to look into the state auditors' report about the tender. Earlier last week, Paksas asked Economy Minister Eugenijus Gentvilas to explain by May 5 what criteria the Economy Ministry applied while choosing Vangvard as the winning bidder.

According to press reports, Aviko Ross, another Russian company, submitted better offers than those offered by Vangvard.

This is Lietuvos Energija's second attempt to transfer the right to claim payment of Belarus' debt for electricity supplies dating to 1998-1999. The first attempt fell through last May after the state audit office did not back the utility's intentions to accept a bid worth as little as 40 percent of the total value of the debt.

The next meeting of Lietuvos Energija' s shareholders is scheduled for May 11.