RIGA - Riga Port has filed a claim against two leading gasoline retailers for poor management of a local oil terminal.
Scandinavian-owned Neste Latvija and Latvija Statoil fuel companies were both surprised when Riga Port chose not to launch any negotiations before filing a claim worth 1.1 million lats (1.8 million euros) on July 17 against Neste Latvija at the Riga International Court of Arbitration as compensation for the poor operation of the Neste oil terminal.
The port wants to have terminated a 30-year lease, signed in 1996, for the land on which the terminal is situated.
Riga Port claimed that losses have been caused as a result of Neste not carrying out various clauses in previous management/investment agreements.
The port's claim states that in 1996 both parties signed a land lease agreement by which a plot at the Riga port was handed over for use by Neste for building an oil product terminal. The agreement also outlined minimum and maximum amounts of oil products that could flow through the terminal, as well as a deadline for completion of the terminal's construction.
Riga Port claims that construction was completed nine months behind schedule and that Neste Latvija has not yet registered a limitation on property rights at the state land register.
The port also argues that between 1999 and 2002 the amount of oil products handled at the terminal did not exceed 51 percent of the minimum amount required by the agreement.
Neste Latvija and Latvija Statoil defended their handling of the terminal in response to the new claim.
Statoil and Neste responded by saying that with 23 million lats (40 million euros) of investments for constructing the terminal, the companies are amongst the biggest investors at the port, but past experience shows that the port is not a "good environment for investments."
Both companies have "always carried out all the conditions of agreements signed with the Port of Riga," according to a joint announcement made by Neste Latvija director Panu Kopra and Latvija Statoil executive director Baiba Rubesa.
Management of both companies insist that they have been trying to solve a series of issues at the Riga port for years while constantly facing obstacles raised by the port administration.
"We have long tried to promote a constructive dialogue but have come across open ignorance and, it seems, counteractions. Since 1996 we have been forced to overcome various barriers related to the pier we are renting at the Riga port and oil terminal expansion issues, as well as construction of railway tracks from the terminal to the Ziemelblazma railway station, thus slowing the business of both companies," Kopra and Rubesa stated.
The two businesspersons said that they now carry out all communication with Riga Port through letters or legal procedures, as attempts at solving problems through negotiations with the port administration have not helped solve the "mess" there that continues to trouble business.