GAS HIKE: The Estonian gas utility Eesti Gaas will adopt from the start of next year a consumption-based price system that will increase gas prices 14.2 percent on average. For large consumers, a drop of 11 percent is expected. CEO Aarne Saar said on June 28 that prices for small consumers using up to 200 cubic meters of gas a year will rise by almost 20 percent. One cubic meter of gas will cost 4.70 kroons ($0.25). For consumers using more than 200 and up to 3,000 cubic meters of gas, the new price per cubic meter will be 3.50 kroons. For consumers using 3,001-5,000 cubic meters a year, 2.60 kroons. The price for gas-fueled heating plants will not change because it rose at the start of this year. Saar said, however, that prices for heating plants will likely increase by 2003. Beginning next year Eesti Gaas will have to pay 10 percent more for the gas it buys from Russia.
DEAL SAILS: The Danish company DFDS Tor Line on June 27 transferred $47.6 million to the Bank of Lithuania's account with the Federal Reserve Bank of New York as payment for 76.36 percent of shares in the Lithuanian Shipping Company. Shareholders of LISCO Baltic Service and Lietuvos Juru Laivininkyste, two companies that resulted from the sale, held statutory meetings on June 28. Around 81.5 percent of all LISCO's shareholders with voting rights participated in the meetings. Some 98.6 percent of them voted in favor of setting up LJL and LBS, Arunas Pemkus, head of the public relations company Hill&Knowlton, told BNS. Four representatives of the Lithuanian State Property Fund, the largest shareholder of LJL, and one representative of the shipping company's minority shareholders will sit on the supervisory council of LJL.
RAIL CUTS: The council of the Estonian railway Eesti Raudtee endorsed June 28 changes in the firm's investment budget, cutting investments planned for the current year by 198.4 million kroons ($10.74 million) to 393.9 million kroons. Aap Tanav, a member of the council and spokesman for the Transportation and Communications Ministry, told BNS that the cuts were made because the board's plan to take a loan to cover investments fell through because of its controversial privatization. Tanav said the rail company will try to complete all the investments that have already gotten off the ground, while investments that haven't yet started have been suspended. In addition to trimming the 592.3 million kroon investment budget, the council endorsed several agreements which normally are the board of directors' duties but have been delegated to the council because of the privatization process.
PORT WOES: A new port in the Russian city of Primorsk on the Gulf of Finland could seriously affect oil flowing through the Latvian port of Ventspils, according to the international shipping newspaper Lloyd's List. The oil terminal in Primorsk will be connected through new pipelines to oil fields throughout Russia in an attempt to lessen the country's dependence on Baltic ports. Ventspils Nafta, the oil company in the port city, could see a decrease of up to 50 percent in oil transit business from Russia, company President Igors Skoks told the newspaper.
A SHOPFUL: Baltic Shopping Centers, a Lithuanian subsidiary of the German construction, investment and management company Objekt-Entwicklung, will cooperate with ICA-Ahold, the leading Nordic retailing group, in building shopping centers in Lithuania. According to a statement issued this week, BSC and ICA-Ahold are planning to construct buildings with a total shopping area of about 45,000 square meters and a parking area for 2,400 cars in Vilnius' North Town, a former Russian military base. ICA-Ahold has already begun the construction of a 20,000-square-meter shopping building with a parking lot for 1,400 cars in North Town. Close to the ICA-Ahold construction site, BSC will initially construct a 25,000-square-meter shopping complex with 15 to 20 large shops and a parking area for 1,000 cars. In Kaunas, Lithuania's second-largest city, BSC is planning to construct a shopping center housing around 100 shops. The shopping complex in Vilnius is planned to be opened in the autumn of 2002, while the Kaunas shopping center is to be completed by the spring of 2003.
CABLE MAKER: Amphenol Eesti OU, a subsidiary of the U.S. company Amphenol, one of the largest makers of interconnect products in the world, is building a cable assembly plant in Estonia that will provide 360 people jobs upon its completion at the end of this year. The plant in Tallinn's eastern suburb of Lasnamae, built by Skanska EMV AS, will have a floor area of 7,000 square meters. The parties have agreed to keep the price of the building confidential. The Amphenol subsidiary in Estonia mostly exports its products to Sweden, France, Holland and Finland. Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, coaxial and flat-ribbon cable, and interconnect systems.
VACANCY: Six new hotels opened in Vilnius since the beginning of the year, and the number of hotel rooms in the Lithuanian capital has increased by 12.4 percent. Currently, there are 2,225 hotel rooms in Vilnius, compared to 1,980 early in the year, according to the Vilnius municipality. The city predicts the number of hotel rooms will continue to grow through the year. The construction of the hotel Holiday Inn Vilnius has already started; the hotel Zaliasis Vilnius is undergoing reconstruction; this autumn will see the start of the renovation of the Hotel Lietuva, owned by the Norwegian real estate company Linstow International. Following reconstruction, the Lietuva will become a member of the Reval Hotel Group, a chain of hotels operating in the Baltic states.
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