VILNIUS - The Lithuanian government last week finalized its decision not to accept Eesti Energia's bid for Rytu Skirstomieji Tinklai, the power grid in eastern Lithuania, drawing criticism from both the company and Estonian officials.
Eesti Energia, Estonia's monopoly utility company, had bid 520 million litas (150 million euros, or some 27 million euros over the starting price) for a 71.35 stake in the company, though Lithuania rejected it on the grounds that Eesti Energia was still state-owned, leading to doubts as to when it would be privatized and who might buy the Estonian company.
Lithuanian officials also stressed that Eesti Energia did not meet EU requirements on industry liberalization.
"Lithuania is prepared for a liberalized energy market in the European Union, and Estonia was given a transitional period up to 2008," Economy Minister Petras Cesna said.
But Eesti Energia officials and local analysts claim that the government decided to cancel the tender after Germany's E.ON Energie backed out at the last minute.
"The decision of the Lithuanian government is unjustified, and naturally we are disappointed. We can only conjecture why such a decision was made," Eesti Energia CFO Sandor Liive was reported as saying.
Public officials were more frank in their assessment of the rejected bid.
"This is a black day for Baltic economic cooperation," Marko Mihkelson, chairman of the Estonian Parliament's foreign affairs committee, said. "It's a pity that the Lithuanian government put emotions first in making its decision and disregarded the capability and substantive proposals of Eesti Energia."
For years now Estonia has been hoping to establish a strategic power concept for all three Baltic states that would ensure their kilowatt-independence from Russia and allow them to export power to the lucrative Scandina-vian markets.
"If we fail to work together in such a strategic issue as energy security, it's hard to count on successful Baltic cooperation in other spheres, too," Mihkelson added in this context.
Still, despite the setback, Eesti Energia remains committed to strategic cooperation.
"We assume that we could form an integrated energy system in the Baltic region in close cooperation with Lithuania and Latvia," Liive said. "The key objective, however, is to achieve successful competition of small firms - such as us - with Russian and European Union power companies."
Only by working in close cooperation can the three Baltic states reduce their growing dependence on Russia in energy, Eesti Energia officials stressed.
Eesti Energia, which posted sales of 366 million euros for the year ending March 2003, said it would seek compensation for taking part in the tender.
