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Over the last five years Kaunas residents were receiving heat from the producer Kaunas Heat and Power Plant (KHPP) at a much cheaper rate than the residents of other larger Lithuanian cities.

 

The coming heating season shows no good signs; situation should change radically. Increasing prices may lead to twice as thinner purses of inhabitants as compared to last winter. For more on this issue please read the interview with Antanas Pranculis, the Director General of KHPP.

 

- You made an appeal to the court against the NCCPE for the failure to observe the law. Why do you believe that investment agreement prevails over the law?

 

- I am convinced that laws must be observed. However, they cannot be subject to retroactive application and reject agreements and commitments, in force for several years already. Contract between the heat producer Kaunas Heat and Power Plant and the heat distributor KAUNO ENERGIJA was signed in 2003 for the period of fifteen years. For five years our enterprise was strictly meeting this agreement, despite the fact that it was not beneficial for us from the economic point of view and was even detrimental. We want the agreement to be observed by our partners as well, namely by KAUNO ENERGIJA and the City Municipality, which controls the former and which accepted agreements of 2003.

 

- Are you ready for compromises in negotiating with the enterprise KAUNO ENERGIJA and City Municipality?

 

- Our company strives for the heat energy production price in Kaunas stay at the lowest rate possible among all the largest cities in Lithuania. We will do our best to make the long-term contract for the purchase of heat be observed, otherwise Kaunas and all Lithuania would appear strange before the eyes of foreign investors; rules of the game unilaterally change after the project has already gained momentum. Such behaviour is far from being encouraging for investment in Lithuania, which is being the target of loud talks on raised platforms. Of course, we understand the worries of the heads of Kaunas City as regards the predicted increase in the heat price. This issue is of high sensitivity and relevance to all the Lithuanian population. Thus, KHPP owners are ready to look for compromising decisions, acceptable to both of the parties, instead of simply raising the heat prices. Following the formula established under the contract, it is possible to apply a discount, which should be the target of deliberation. We are prepared to continue business cooperation. These are not mere words, proved by the fact that over five years Kaunas city inhabitants have saved roughly 200 million LTL. To my mind, this is appreciated also by KAUNO ENERGIJA and municipality, its administrator, and, moreover, consumers of heat, supplied to the city. Elimination of petroleum products, emitted to Neris last week, cost approximately 35-40 thousand LTL.

 

- You have announced your plans to build a new power plant in the city. What benefit would it bring to the city?

 

- It would be one of the most modern thermal power stations in the eastern and central Europe. According to the project, the capacity of the new power plant would reach 350 megawatts. Power plant would produce heat to the consumers of Kaunas city, whereas electricity would be supplied for the satisfaction of the needs of whole Lithuania. The new power plant would become a reliable electricity supplier next year after the termination of operation of Ignalina Nuclear Power Plant. As the project develops, Kaunas will be offered a great number of new jobs, building materials will be purchased and taxes will be paid. Considering that, Kaunas residents should not only have their own heat and power resource, but also a larger budget of the city. In my opinion, the funds, attracted to the region, would improve the life also of all the residents of Kaunas. As compared to the current power plant, the new modern power station, which meets up-to-date requirements, would require significantly less natural gas for the production of heat. The given would be also directly felt among the inhabitants of Kaunas city, as they would receive smaller heating bills.

 

- Investment of what extent would reach Kaunas City?

 

- It would be the largest investment in Kaunas. It would amount to around 1 billion LTL. However, I must repeat myself: every investor wants transparency and aims at being assured that his long-term investment is secure and investor’s plans or agreements are not unilaterally amended by politicians or other authorities every several years.

 

- Would the planned investment be affected by the decision on the current situation in Kaunas?

 

- I fear that it might happen like that. Please give a thought yourselves, when our country fails to meet the undertaken obligations under one project, could investor believe that the state and its institutions would meet their commitments in other projects? Russian gas concern GAZPROM, the owner of KHPP, makes a hint concerning the possible standby of the project, as the owners of the power plant fear that the Lithuanian government could again change the rules of the game to investor at any time.

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