The company has managed Riga heating systems for the last 20 years uncontested. It serves more than 2,800 houses, supplying heat and maintaining heating systems.
Several years ago, the State Audit Office ruled that Rigas Namu Parvaldnieks (RNP), the municipal housing manager, has to select its heating manager via a public procurement.
After a failed first attempt, a procurement was launched late last year, with a team-up of four local firms chosen to supply many Rigans with heat in a 5-year deal worth €21m. Rigas siltums' application was found not to comply with the regulations of RNP.
One of the firms, Lep Energy, was set up just in June last year shortly before the procurement was launched with Aleksandrs Popovs and Pāvels Popovs registered as its owners. Aleksandrs donated €2,500 to the Harmony party, which leads the Riga City Council, early this year.
The remaining companies include Adapteris, Aplex and SB. Of these, Alpex also has deals with other municipal companies.
The companies' collective turnover is around €15m.
"The most suitable entrant was chosen and it won the public procurement. It was not, in this case, Rigas siltums, which RNP thought did not comply with the rules of the procurement," said RNP representative Santa Vaļuma.
The results of the contest to supply Rigans with heat have been accepted by a monitoring body, the Procurement Monitoring Bureau. Nevertheless Rigas siltums has turned to an administrative court to contest the ruling.
Half of Rigas siltums is owned by the state and half by the Riga municipality.