OFF THE WIRE

FERRY ARRESTED: Rough seas on Christmas day and complaints by shaken passengers have led to an investigation of the Sea Symphony, which sails from Riga to Lubeck, Germany. The ferry, operated by Latlines, has been detained in Lubeck, and was found to be with an out-of-date safety certificate. The Latvian daily Diena reported that after the trip passengers complained to the ferry's captain and operator about safety deficiencies putting the ship in danger. Passengers said they were not warned about a coming storm, trucks in the ferry were not secured properly and passenger cars were battered during the trip. "We're lucky to be alive," a passenger commented via telephone from Berlin. That passenger has decided to lodge a complaint not only to regain material loses, but also to "never let the ferry go anywhere ever again." Latlines has refused to answer questions pending an expert conclusion. Twenty-two passengers, 33 crew members and 31 trucks were aboard the Sea Symphony. The ferry reached the port of Lubeck with an 18-hour delay and was tilting to one side. Local authorities in Lubeck have detained the ship until the end of the investigation. Initial calculations show that damages will amount to at least 1 million Deutsche marks ($457,000). The Latlines-operated ferry was built in 1974 and was initially intended for traveling the Mediterranean. The Sea Symphony started sailing between Riga and Lubeck in May last year.

SWEDES SUE LATVIA: Windau, a power company based in the southern Latvian town of Bauska, has filed a claim with Stockholm Chamber of Commerce Institute of Arbitration against the Latvian state over non-payment of double tariff for energy. Sweden's firm Nykomb Synergetics Technology AB, the owner of Windau, filed the 8.22 million lat ($13.04 million) claim against the Latvian state after the settlement talks ended to no avail, the Economy Ministry reported. The settlement talks ended in failure as the Swedish party was not ready to reduce the initial amount of the claim whereas Latvia did not have grounds to offer a higher energy purchase price to Windau. The merit of the claim stems from the Latvian legislation which stipulates that the state-owned utility company Latvenergo buys energy from alternative and small energy producers for double tariff. The contract between Windau and Latvenergo was closed in 1997, during a period of several months when this legislative provision was not in effect. As a result Latvenergo didn't buy energy from Windau for double tariff and the amount of the claim is the difference between the payment the company has received and the amount it could have received. The Latvian part believes the claim by Windau is not legal because of the timing when the contract was closed. But the Swedish part states Latvenergo had been purchasing energy from other co-generation stations for double tariff therefore the action toward Windau and its owners should be seen as dishonest.

SUCCESSFUL COMPETITION: Last year's developments have showed that the opening of the telephone service market to competition succeeded and customers' interest surpassed expectations, said the new chairman of the board of Swedish-owned Tele2 Eesti, Ullar Jaaksoo. "The opening of the market to competition went well thanks to two strong newcomers - Uninet and Tele2," Jaaksoo said. "If only it could also be changed into a profitable business through growing volumes and the establishment of fair interconnection charges." Jaaksoo said a hike in monthly fees of the former fixed-line monopoly Eesti Telefon would apparently spark a general wave of resentment against the conventional phone service, but on the other hand it would give a boost to Tele2's mobile telephone business. "Our goal was to become one of the top players on the fixed-line phone market and provide the biggest alternative to Eesti Telefon, and we've succeeded in this," he said. "In terms of both the number of subscribers and traffic volume in minutes, we hold the second place among the operators."

LOWER DUTY: The European Union is to lower the duty on fish imports from Lithuania this year and scrap the tax altogether in two years, local officials said on Jan. 4. These measures are provided for under a supplementary protocol setting the procedure for trade in fish and fish products that Belgian and Lithuanian officials signed in Brussels in late December. Vytautas Vaitiekunas, director of the fishery department under the Lithuanian Agriculture Ministry, said that Lithuanian fish producers had not been satisfied with EU quotas for imports subject to reduced duties. An agreement has been reached with EU officials, therefore, that it is better to gradually lift the duties rather than raising quotas, he said. The Agriculture Ministry said in a statement that Lithuanian fish processors were capable of exporting around 20,000 tons of high quality fish products per year. The agreement is yet to be ratified by the Lithuanian Parliament. However, the government will be asked to approve this procedure on a temporary basis so that the agreement may take effect in early February.

CRABS ATTACK RUSSIA: Lithuania's Viciunai, the leading producer of crab-meat sticks in Europe, is set to invest some 20 million litas ($5 million) in a fish processing plant in Russia's Kaliningrad region, which is expected to launch production in July of this year, the business paper Verslo Zinios reported Jan. 7. Visvaldas Matijosaitis, director of Viciunai, was quoted as saying that the plant under construction in Sovetsk would comply with all EU standards. Its annual output will amount to over 15,000 tons of fish products. According to the report, Viciunai became Europe's leading producer of crab-meat sticks thanks to its investment and flexible marketing policies last year. In 2001, the group invested 23 million litas in the reconstruction of Paljassaare Kalatoostus, Estonia's biggest crab-meat stick production company it had acquired, with a view to completing the project by April 2002. Viciunai has plans to start the construction of another fish processing plant in a neighboring country this year. The group has set up a number of secondary companies for sales in the Baltic states, Europe and Russia. In Russia its products are sold under the brand names of ESVA and VICI. In Lithuania, the Viciunai Group also owns mill and bakery operations in Plunge, in the western part of the country, and runs a chain of cafes and shopping centers in other major cities and towns.