Power station privatization hits snag

  • 2000-03-30
TALLINN (BNS) - Opposition parties in Estonian parliament are trying to interfere in the privatization of the country's large electric power stations through attempts to impose its own conditions and require discussion of the sell-off deal in Parliament.

The People's Union, Center Party, Coalition Party and Estonian United People's Party factions on March 23 made a proposal to discuss the planned privatization of the Narva Elektrijaamad company in Parliament as a matter of national importance.

The bill, carrying the signatures of 33 MPs, says the terms and conditions of the privatization of Narva Elektrijaamad must be included in the Parliament's agenda.

According to the bill, the price at which a 49 percent stake in Narva Elektrijaamad will be sold to an outside investor must make up at least 98 percent of the real value of Narva Elektrijaamad, a company which runs Estonia's two largest electric power stations situated close to the northeastern city of Narva.

The sell-off threatens to lead to a substantial rise in the price of electric energy, which would substantially diminish the competitive ability of Estonia's economy and speed up the impoverishment of the population, the covering letter to the opposition's bill says.

The opposition is contesting the need to sell the power stations into private hands, saying that additional revenue earned after the series of price hikes that will take place anyhow would be enough to provide money for badly-needed investments.

The Estonian government has held talks on the privatization of Narva Elektrijaamad for several years. Although the three-party coalition which took over after general elections last spring did not regard it as right that the power stations would be sold to the U.S. company NRG Energy without an open tender, the government of Prime Minister Mart Laar decided not to stage a new competition of interested buyers and hopes to reach an agreement with NRG on the terms of the deal by the end of April.