Vilnius mayor defends decision to end Energesman contracts

Vilnius Mayor Valdas Benkunskas has defended the municipality’s decision to terminate contracts with financially troubled waste treatment plant operator Energesman, saying the move was justified and timely, LRT reported.

“I think the decisions were both justified and timely. This is ultimately confirmed by court decisions, which so far have consistently favoured the public administration,” Benkunskas told journalists on Wednesday.

He compared the situation to a marriage, saying contracts were not terminated after the first dispute because the parties initially tried to preserve their relationship.

LRT’s investigative unit reported that the Vilnius municipality already knew in the spring about Energesman’s financial difficulties and the risk that the company might be unable to meet its contractual obligations. After a waste crisis emerged in the region in July, the contracts were terminated.

Benkunskas said the information was not new or surprising. He noted that Energesman had repeatedly stated that it had the financial capacity and determination to rebuild the waste treatment plant, which had been damaged by fire.

“But signing a contract and undertaking obligations on paper is one thing; implementing them in reality is another,” the mayor said. He added that the company had failed to fulfil its commitments, while its financial problems and the accumulation of waste created environmental and fire risks.

In May, the Vilnius region and Energesman signed a settlement under which the company agreed to rebuild the waste sorting and treatment plant at its own expense. The facility had been damaged by a fire in April last year.

According to Adomas Bužinskas, the municipality’s administration director, it could have ended Energesman’s services immediately but instead chose to give the company the opportunity to rebuild the plant.

The contracts were terminated on July 10. As Energesman is no longer able to meet its obligations, the Vilnius region may have to cover the cost of rebuilding the damaged plant. LRT’s investigative unit reported that the work could cost at least several million euros, with a contractor tender planned for October.

The fire at the plant on Jočionių Street in Vilnius took about a day to extinguish and destroyed around 7,500 square metres of the building. It disrupted Energesman’s operations and contributed to the waste crisis in Vilnius this summer.

The Vilnius Regional Waste Management Centre has now taken over the plant. Legal disputes between the centre and Energesman are continuing.