Vilnius Energy accuses city authorities of obstruction as dispute deepens

Vilniaus Energija, owned by the French group Veolia, has a heating grid lease contract with the municipality of Vilnius that expires next year. It has to hand over the infrastructure to the city by April 2017.

According to the lease contract, the parties must hire a consultant to appraise the facilities in order to arrange the terms of the handover. Vilniaus Energija said the city had made unreasonable last-minute changes to the tender so as to stall the process and has asked for the formation of a dispute mediation commission.

Meanwhile Deputy Mayor of Vilnius Valdas Bekunskas said that the company is merely playing the victim to beef up Veolia’s €100 million arbitration claim against Lithuania.

“I think it has to do with the suit against the state. They are trying to present themselves as victims of the government, the state, the municipality,” Bekunskas has told 15min.lt.

Veolia said last month it was filing a €100 million claim against the Lithuanian state in the Washington-based International Centre for Settlement of Investment Disputes for damages it allegedly sustained due to unfair treatment.

Benkauskas said that Vilniaus Energija had previously agreed that the city take care of organizing the public tender but is now stalling the process.

Some experts estimate that the value of heating infrastructure that Vilniaus Energija leased in 2002 has depreciated more than the company’s investment in it, which means it will have to cover the difference when returning it to the city authorities.