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LTV's De Facto looks at house insulation projects in Latvia

Despite the fact that energy saving is becoming more and more topical, dozens of apartment building insulation projects with co-financing from European Union (EU) funds have stopped or are about to stop, Latvian Television's De Facto broadcast reported April 24. 

According to data provided by the financial institution “Altum”, during the first three months of this year alone, the process of contract for insulation has stopped for 28 houses at the last moment. In 19 cases, the reason was the refusal of the construction company to enter into the contract, but in seven cases the population voted to suspend.

New cases will add to these statistics soon. In the past weeks, 13 multi-apartment houses in Liepaja, operated by the Liepaja House Manager (LNA), have rejected the projects. Another 13 buildings in Rīga are considered to be at high risk for refusal.

The main reasons are the extremely fast-growing construction prices, the unavailability of materials on the market and, consequently, the increase in project prices or the loss of interest of builders in these types of projects. The solvency of citizens, cooperation with banks, lending are also increasingly difficult.

According to the data provided by “Altum”, in the projects that manage to be completed, the average heat consumption for is reduced by 59% or by 82 kWh per square meter per year.

A house on Daugavas Street in Liepāja will be one of the 13 buildings where projects have been prepared in a coordinated way, even procurements have been announced, but the renovation will not take place.

"The reasons, as I mentioned, are two: there is either the [price] offered by the builder a moment ago, when there was still hope that the renovation would take place, but it has changed considerably now, by 30-40%, and consequently, either the builder refuses to enter into a contract [..] or the residents [..] say - sorry, but we will not be able to pay it," says  Ita Cērmane, representative of LNA.

During this planning period of the European Union funds, co-financing was available for the renovation of multi-apartment houses with a total of €169 million. The money is administered by the financial institution “Altum” and 62% has been disbursed.

In addition to the 13 houses mentioned in Liepāja, Rīga has submitted 115 projects for Altum grants. 19 houses have already refused. Eight have been warmed, but there are still 66 houses in the process, 13 of which are at high risk of not finishing the project. In reality, this number can prove to be even twice as high, predicts the company.

At the moment, it takes about two years from the idea and the first population survey to the contract, even if everything goes very smoothly. Construction prices are now changing so rapidly that the contract proposed in the procurement is no longer up to date. However, when changing this, the citizens' consent must be re-obtained. The Ministry of Economics, as one of the solutions, has been offering home residents time to agree on a possible price adjustment of up to 15 per cent.

“I also hear these suggestions from the media, but where were these suggestions quicker? We cannot now change the terms of the tenders already announced. This is not allowed by law. So we have to start all over again anyway,” said head of Rīga House Manager Rolands Neimanis.

The second recommendation from the Economics Ministry is to wait until the situation stabilizes. However time is limited, since the work should be completed by the end of next year to be able to use the EU funds.

 

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