Lithuanian privatization sets coalition at odds

  • 2001-06-21
  • Virgilijus Savickas
VILNIUS - The pending privatization of the Lithuanian gas monopoly Lietuvos Dujos and other state-owned energy enterprises is splitting a shaky coalition of Liberals and Social Liberals, as coalition partners last week could not agree on the fundaments of privatization.

A working group assigned to overcome differences inside the coalition last week failed to reach an agreement on several issues, including the privatization of Lietuvos Dujos .

The government, represented mostly by Liberals, now controls 92 percent of the gas company's stock and intends to sell 34 percent of it to a strategic investor, preferably a Western gas company. Russia's Gazprom and its intermediary companies would not be granted control of the Lithuanian gas sector under the plan.

The Social Liberals would like to see Gazprom and its Lithuanian affiliate companies in on the deal.

The Western Lithuanian Industry and Finance Corporation, Achema and Gazprom are going to set up a merger with some Western enterprises in order to take part in the privatization of Lietuvos Dujos, according to a recent announcement.

Prime Minister Rolandas Paksas recently met Gas de France representatives to discuss strategic investment. The German gas companies Ruhrgas and RWE were also interested, according to reports.

"Involvement of Lithuanian capital will ensure that the national gas supply is not monopolized by Gazprom or any Western company that wants to treat the small Lithuanian market as a springboard to Russia. Political games with Lietuvos Dujos are dangerous as it may lead to an uncontrolled rise in prices for gas and other commodities," Antanas Bosas, head of the Western Lithuanian Industry and Finance Corporation, told the Baltic News Service agency.

Lithuania and Latvia now buy gas from Gazprom at $79 per 1,000 cubic meters. Estonia pays $80. The average price for the same quantity in Western Europe is $132.

Lietuvos Dujos' privatization now awaits parliamentary consent of the government's sell-off plan.