CER | Latvia: Ship sale heads south

Italian firm eyes shipping deal

While the government postponed a decision on how to handle the stalled privatization of a 68 percent stake in Latvian Shipping Company (LASCO), an Italian company said it was still interested.

The company, d'Amico Societa di Navigazione, revealed it had been one of the unnamed bidders and said it was still considering buying LASCO, despite pulling out of a failed privatization tender last month.

Trigon Capital, advisers to d'Amico, said the Italian firm, which has a 25-strong tanker fleet, saw 49-vessel LASCO as a good fit for its operations, as both were leaders in oil product tankers and their geographical coverage was highly complementary.

d'Amico said it decided not to pay the required bid bond of LVL (Latvian lats) 3.1 million (USD five million), because it felt the money was not adequately protected. The deposit was to have been transferred to the government via Latvian savings bank Krājbanka, which is not rated by an international credit rating agency.

If the government wants to go on with privatization, it must now decide whether to extend the current tender by prolonging the payment deadline for the two current bidders or to relax the rules and open a fresh tender. Economy Minister Aigars Kalvītis said the privatization would definitely be continued, but said there was a need for a joint decision by the ruling coalition parties.

Halonen softens tone on NATO enlargement

Finnish President Tarja Halonen said during her visit to Riga that she supported Latvia's drive to join NATO, thus taking a somewhat different opinion from what she expressed in an earlier interview with German magazine Der Spiegel.

Latvian President Vaira Vīķe-Freiberga, in her turn, told the Finnish paper Helsingin Sanomat prior to Halonen's visit that she would like to hear Halonen explain what she actually meant when saying that Finland cannot support the Baltic interest in NATO in the same way as their EU integration.

Halonen dismissed the Latvian concerns as a misunderstanding. "We have always said that, according to the OSCE (Organization for Security and Cooperation in Europe) principles and also in our own opinions, every sovereign state has the right to choose its own security arrangements, and we do support Latvia and the others," Halonen said.

President urges ratification

President Vaira Vīķe-Freiberga, during her meeting with Latvia's Way Saeima (Parliament) faction, voiced her concerns about the need to ratify the Latvian-Australian extradition agreement as soon as possible.

Vīķe-Freiberga said that, while in the United States, she had received "serious signals" that Latvia should finally decide on the pact.

"The signals from abroad are extremely serious and unmistakable. Therefore, the President urges the Parliament to make a decision, saying at the same time that this decision will have political resonance," said faction leader Kristiāna Lībane.

The Latvian-Australian extradition agreement, which would allow putting Australian-Latvian Konrads Kalējs on trial in Latvia, has been stuck in Parliament since the end of last year. Meanwhile, Australian courts are getting ready for a hearing of Kalējs's case on 14 May.

Latvia has accused Kalējs of war crimes committed at Salaspils concentration camp during the Second World War.

Project to encourage integration

Latvian government agencies and international NGOs have made a pact to advance integration of non-citizens by providing them more information on naturalization and citizenship.

The Naturalization Administration, United Nations Development Program (UNDP), the Latvian mission of Organization for Security and Development (OSCE), and the Justice Ministry agreed on a project to include pamphlets, meetings, discussions and other events aimed at encouraging non-citizens to choose Latvian citizenship.

The cost of the six-month project, which begins in July, is projected at about USD 20,000 (LVL 12,600). Expenses will be covered by the cooperation partners, which are likely to be joined by the embassies of the United States, Britain, Canada and Sweden.

CE praises Latvia's presidency

Council of Europe (CE) Secretary General Walter Schwimmer praised Latvia's six-month presidency last week.

Schwimmer mentioned the admission of Azerbaijan and Armenia to the Council, assistance to former Yugoslavia and Bosnia-Hercegovina in meeting membership criteria and efforts to improve the situation in Chechnya as particular achievements during the Latvian presidency.

At the same time, Schwimmer recommended that Latvia consider granting non-citizens the right to vote, taking into account the European standard that non-citizens who have a long residency and are working and paying taxes have the right to vote in local elections. He stressed that societal integration, however, is a more immediate priority.

Latvian authorities have argued that granting the right to vote lessens the motivation to seek citizenship.

The Council's Committee of Ministers praised Latvia's initiatives to strengthen the Council's cultural dimension and cooperation among local authorities.

Russia increases security

The Russian Ministry of Foreign Affairs expressed regret over "delinquent actions" against the Latvian Embassy in Moscow after hooligans smeared the building with paint for a second time last week.

The Latvian Foreign Ministry handed another protest note to Russia and told the Russian ambassador to Latvia, Igor Studennikov, of Latvia's dissatisfaction with the lack of security measures around the embassy.

Russia stepped up security at the embassy building and launched an investigation into the vandalism.

Commander Graube likely to retain post

Special Duty Forces have dismissed several superior officers following an investigation into the death of a conscript during a brutal initiation ritual.

National Armed Forces Commander Raimonds Graube and Minister of Defense Ģirts Valdis Kristovskis, however, are likely to remain in their posts, as the Saeima Defense and Internal Affairs Commission did not support their resignation.

Meanwhile, the Defense Ministry is set to draw up amendments to the military service law to prevent drafting conscripts with criminal records or histories of drug-abuse. About 17 percent of current conscripts have criminal pasts, according to Graube.

And in other news...

The weakening world economy will lead to slightly slower growth in Latvia in 2001, Baltic brokerage Suprema Securities stated in a research report last week. Suprema said the Latvian gross domestic product (GDP) growth in 2001 will also fall to 5.2 percent from 6.6 percent last year, and predicted an upward turn to 5.4 percent in 2002.
Latvia's privatization agency postponed a decision on how to sell the state's remaining eight percent stake in utility Latvian Gas. The agency was mulling a proposal to divide sale of the stake between Russian and German strategic investors, giving one half to Russian Gazprom and distributing the other half between German firms Ruhrgas and E.ON Energie.
Ministry of Economy reported that about 91 million or 82 percent of privatization vouchers had been used in Latvia by 1 April. About 31 million vouchers were invested in apartments and other housing, 41 million—in capital shares of companies, 6.9 million—in the purchase of companies and other properties, 11.5 million in land purchases.
Ventspils free port will join the Trans-Siberian Association, board chairman Aivars Lembergs announced after the port board meeting last week. Ventspils's membership in the Trans-Siberian Association, which comprises railway companies and some ports, is likely to increase the cargo transit through Ventspils.

Ieva Raubiško, 11 May 2001

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