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Wednesday, Jun 07, 2023

Sky-high summit costs raise questions in Lithuania

Sky-high summit costs raise questions in Lithuania

Authorities in the Baltic country insist procurement for the upcoming summit was transparent, but costs have spiralled with Biden and Zelensky expected to attend.
The cost of hosting an upcoming NATO summit in Lithuania are causing concern.

Representatives from the 31-state military alliance will gather in the capital Vilnius in July, with US President Joe Biden and his Ukrainian counterpart Volodymyr Zelensky both expected to attend.

But the amount Lithuanian authorities are spending on the major meeting has prompted a rash of newspaper headlines as journalists probe the costs involved, forcing the government to hit back against allegations procurement lacks transparency.

Last week, public broadcaster LRT reported Lithuania's Foreign Ministry, which is organizing the talks, will spend €6.48 million renting more than 500 - mostly brand new - cars.

The luxury vehicles will be bought from a local company that's had its financing from the bank doubled to €20 million, just to afford to pay for the NATO summit cars and minibuses.

Meanwhile, Lithuanian journalist Andrius Tapinas questioned the price of services purchased for the meeting in April, detailing multi-million euro bills for video conferencing and lighting equipment.

All costs will be fronted by Lithuania, where an economic recession and skyrocketing food prices have helped push one in five into poverty.

Observers have questioned whether purchases by authorities were transparent, with some contracts being awarded through undisclosed negotiations, according to the Baltic News Service media outlet.

Officials say they were, claiming prices were influenced by the urgency of the process.

The conference has long been in the offing, with the Foreign Ministry estimating last July the summit would cost €30 million.

NATO summits inevitably require large sums of money for security, transportation and other hosting costs, especially when high-profile guests are in attendance.

Vilnius locals will face a number of disruptions, with roadblocks, cancelled flights and cuts to public transport.

One company Up Records, which will rent sound equipment for €553,000, had an annual income of €120,000 and made a loss of €50,000 in 2021," Tapinas wrote on Facebook.

Videoconferencing equipment will be rented for €1.6 million by Screen Service - double its annual income for the deal; while lighting will be supplied by Muzikos Ekspresas for €1.5 million. This is also twice its annual income, with the company making a loss of €250,000 last year, he added.

Telia, a telecoms company, was awarded a contract worth €2.70 million last year, through "undisclosed negotiations", LRT reported.

In April, Lithuania's Public Procurement Service said it was monitoring the situation and carrying out an assessment of what had been brought.

It noted "the risk of overpaying is higher" depending on the contract's timeframe, number of suppliers and buyer's negotiation skills, but maintained transparent conditions had been met.

Speaking in July, the Lithuanian Foreign Ministry said the country was capable of organizing and hosting the event, but unstable geopolitical and economic conditions could pose challenges.

Then the conference was expected for June, but it has since been pushed back.

Neither the Lithuanian government or NATO responded to requests for comment.
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