• 2002-04-11
GAS DEAL MOVES: The Lithuanian Privatization Commission on April 5 approved the bid of a consortium formed by German energy companies E.ON Energie and Ruhrgas for a 34 percent stake in Lithuania's state-owned natural gas utility Lietuvos Dujos. Commission Chairman Eduardas Vilkas would not disclose the stake's price tag and denied press reports that it was 150 million litas ($37.5 million). Vilkas said the consortium's bid complied with the recommendations of the French bank Paribas, the company's privatization adviser. Lietuvos Rytas reported the consortium may be asked to improve its bid. The newspaper calculated that it offered to pay about 1.30 litas per share, far lower than the company's listed price on the stock exchange of just over 1.80 litas. An agreement on the sale of the 34 percent stake as well as a shareholder agreement is likely to be signed in early May, after approval by the government. A second tender will be announced after the current deal is completed to sell another 34 percent of shares to a Russian natural gas supplier, probably Gazprom. The government currently owns 92.36 percent of Lietuvos Dujos and will retain a 24 percent stake, which could later be sold through the stock exchange. (Baltic News Service)

SHADOW ECONOMY: About 16 percent of Estonia's work force has been paid undeclared wages and black market goods account for roughly 12 percent of the population's total spending, according to a recent study by the Estonian Institute of Economic Research. Marje Josing, the institute's director, said the number of employees receiving undeclared wages has been relatively stable in the last few years. At the end of 2001, 84 percent of survey respondents said they did not support the payment of undeclared wages, a 27 percent increase on the 57 percent who said they did not support payment of undeclared wages in late 2000. Josing attributed the change to an increased awareness that recipients of undeclared wages receive no state social guarantees. Respondents' attitudes to black market goods and services have also changed. According to the survey, 23 percent of respondents preferred lower-priced goods whether they were legal or not, compared to 37 percent a year earlier. The black market economy is most prevalent in northeastern Estonia, where it accounts for 17 percent of the population's total purchases, according to the study. (BNS)

GAZPROM GEARING UP: The Russian government last week approved the country's natural gas investment plan for this year. The program, valued at 157 billion rubles ($5.3 billion), includes some 140 billion rubles in investments by gas giant Gazprom, according to the Bank of Finland's Institute for Economies in Transition. Gazprom said in a statement that even with the investment program it still faces a 15 billion ruble shortfall due to Russia's currently low domestic natural gas prices. The company has asked for an increase in domestic rates beginning in early July. According to the plan, Gazprom's main investment targets this year are its gas pipeline from Zapolyarnoe to Urengoi, construction work on its main pipeline to Torzhok in order to bypass Ukraine, increasing the capacity of the Yamal-to-Europe pipeline and construction of the Blue Steam pipeline, which will run from Russia to Turkey. (Baltic Business News)

POWER PLAY: Estonia's Cabinet has sacked five members of Eesti Energia's eight-member supervisory council and replaced them with people close to the new government, which was formed in January. Estonian Economic Affairs Minister Liina Tonisson signed an order replacing four council members on April 5 and Finance Minister Harri Ounapuu then ordered that a fifth person be replaced. The new members are: Janno Reiljan from the People's Union Party; businessman Urmas Soorumaa; Center Party member Kaia Jappinen; Aadu Paist, an engineering professor at Tallinn Technical University and Alo Kelder, who is an adviser to Ounapuu. Those dispensed with are businessman Juri Kao, Moderate party member Erich Teigamagi, Economy Ministry adviser Maria Alajoe, Tallinn Technical University professor Olev Liik, and Veiko Tali, who is head of the Finance Ministry's financial services department. (BNS)

SHIPPING NEWS: The head of the Latvian Shipping Company, Andris Klavins, will likely be replaced before the company is privatized, according to an April 8 analysis in the business newspaper Bizness &Baltija. Klavins has been lauded for keeping the company afloat in recent years, but, surmised the newspaper, "It is no secret that the odds of ... Klavins keeping his position after new shareholders join is extremely small." One possible replacement is Reds Krusts, director of the company's tanker fleet, said the newspaper. The Riga Stock Exchange this week auctioned 32 percent of LASCO shares through a public offering against payment in privatization vouchers. After that public offering an auction will be held to sell 51 percent of the company against payment in cash. (BNS)

E-COPS: Planned legislation in Finland will open e-mail and other wireless accounts to police surveillance, according to the newspaper Helsigin Sanomat. According to the newspaper, the legislation will amend the Coercive Means of Criminal Investigation Act to allow the police, if authorized by a court, to receive information on the sender and recipient of an e-mail, as well as on the contents of the message. The law will also apply to personal logins and Internet addresses, as well as mobile telephones. Police could also receive information on the location of a specific mobile phone at a given moment. Under current law, only telephone numbers can be monitored. The legislation will allow police to more easily investigate the growing use of the Internet and mobile telephones for criminal activities, according to law enforcement officials. Police would be authorized to receive information on wireless accounts only for serious crimes punishable by at least four years imprisonment. Law enforcement authorities say even with the amendments that the law is still not broad enough.