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It has been for more than one year that a billion-worth construction project of a new cogeneration power plant has been in process in Kaunas, yet it is beyond any concerns of the head of the city.

Every month there are around 3.2 thousand people to loose their job in Kaunas city and district, whereas the overall number of the unemployed already makes up 38 thousand. As far as the energy project is concerned, which would be of great benefit both to the city and the whole country, Kaunas city mayor Andrius Kupčinskas had expressed his opinion that the issue was the matter of private investors. Mr Kupčinskas explained that implementation of the project was for the benefit of businessmen, as well as their risk and responsibility, which was not to be undertaken by the municipality or affected in whatsoever manner.

Though a billion-worth project of the new combined heat and power plant in Kaunas is implemented at the expense of investors only, heads of the city, according to the project managers, instead of helping, impede the process by making statements far from any economic logics.

Ungrounded Mayor’s Intimidation

Energy specialists were shrugging their shoulders after Mr Kupčinskas’s statement that KHPP, which is receiving the operator’s services from “Energijos sistemų servisas” (“Energy Systems Service”), possibly unilaterally was bringing to a halt any further investment into the power plant and posed a risk of city freezing during the heating season. “Statement is beyond the reality and is completely incomprehensible. It resembles empty politicking. KHPP is ready both to invest and to ensure reliable provision of heat to the city consumers. There are no assumptions that during the heating season the city would get frozen due to our fault, as the mayor states”, the Director General of KHPP Antanas Pranculis comforted Kaunas residents.

 

 

Despite the obstruction to sign KHPP investment agreement with Kauno energija concerning the construction of a new cogeneration power plant for two years, the project is gaining momentum: the selected consultant and technical supervisor Finnish company “Pöyry Energy” has already assessed the power plant conception and presented the report.

At the end of summer, a call for the competition of a general contractor for the construction of the power plant will be announced. Currently, the procedures of a detailed planning of the land plot, where the power plant is to be constructed, are taking place. Geotechnical survey works have already been completed at the construction site. Moreover, negotiations with the project financing institutions are in process.

Kaunas Power Plant will come into operation in 2013. Electricity, produced in this plant, would definitely lead to cheaper heat for Kaunas inhabitants. Technology of combined cycle gas turbines is highly valued all over the world due to their low environmental pollution level and high energy generation efficiency. A number of such kind of power plants has been constructed not only in the Western Europe but also in the neighbouring Sweden and Latvia. The first power plant of such type has already been built in Lithuania, namely Panevėžys.

Similar project is currently in progress in Elektrėnai, where the 9^th block of the Lithuanian Power Plant is under construction. Construction of this block is one of the most expensive projects in Lithuania over the last years. Construction works are carried out by more than a hundred Lithuanian companies. There are 300 people employed at the construction site and the number is likely to increase twice shortly.

 

 

Construction works of Kaunas cogeneration power plant would also attract the Lithuanian construction and equipment supply companies and would employ a similar number of specialists. Creation of new vacancies would bear a positive effect both to the labour market situation in Kaunas city and the entire Lithuania.

According to Arvidas Ladyga, the project manager of Kaunas Power Plant, charges for the future power plant during its operation would amount to 280 million litas. Taxes and charges during the construction period would make up 25 million litas.

Eugenijus Ušpuras, the Director of the Lithuanian Energy Institute, is surprised at the passive position of the head of Kaunas city as regards a rather important investment project: “Appearance of energy objects is impossible without the support of the government. EU directives include the promotion of development of efficient cogeneration power plants. This is also defined in the Lithuanian National Energy Strategy, adopted by the Seimas. However, given the economic situation electricity consumption in Lithuania and the whole Europe has decreased and this may predetermine the decision of private investors regarding the capacities of Kaunas power plant.”

Moreover, Mr Ušpuras emphasised that the statements of Kaunas politicians regarding the freezing of Kaunas were overblown: “Kaunas will not freeze definitely. Liability should fall not only on the shoulders of heat generator KHPP, but also on the shoulders on the heat supplier “Kauno energija”, which controls heat supply networks”.

 

 

Social democrats, which cancelled support to Kaunas Coalition of Success, intend to start interpellation of Kaunas mayor Mr Kupčinskas, who visited USA. One of the reasons of such discredit, according to the Social democrats, lies in the fact that the mayor failed to do anything to a substantial extent to prevent from the increase in unemployment and poverty rate in Kaunas.

The leader of Kaunas Social democrats Orinta Leiputė resents the fact that the head of the city had never expressed his position in terms of unemployment reduction in Kaunas city. A number of businessmen are even likely to transfer their business to other counties. The governing officials refrain from any attempts leading to job creation.

During the entire term of office of the current mayor there has been only one joint meeting, where an entrepreneur was invited.

According to Ms Leiputė, everything is based on nepotism in Kaunas without observing any long-term aims.

“General distrust in the members of the Political Group Coalition of Success grows also into distrust in the overall Council of Kaunas city, which in turn bears effect on new investment and business”, stressed the politician.

According to her, Kaunas should learn from Druskininkai, where a number of constructions and investment projects are underway.

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