Riga City Council’s leadership appears unconcerned by potential conflicts of interest surrounding the procurement process for its planned ESCO-based public street lighting modernisation project. The initiative, aimed at improving the city’s energy efficiency, is expected to have a total budget of around €10 million. However, concerns have emerged from the outset after it became known that the project’s technical documentation was prepared by an engineer who had long worked for a company that could potentially participate in—and ultimately win—the procurement.

Whether the specialist has in fact left his former employer remains impossible for journalists to verify due to GDPR restrictions on employment records. Riga City Council, meanwhile, has shown little interest in clarifying the matter.

Although the issue could still be addressed, the Riga City Council’s Transport and Traffic Committee did not consider it at its 29 June meeting. No committee meetings are scheduled for July, with the next opportunity expected only in August.

Several Latvian media outlets previously reported that a coalition of industry associations representing more than 30 companies and experts had formally urged both Riga City Council and the Procurement Monitoring Bureau to review the ESCO procurement and consider terminating the tender. Before examining the controversy itself, however, it is important to understand what an ESCO project actually is.

What is an ESCO project?

ESCO is not the name of a specific project but rather a business model for delivering energy efficiency services. Energy Service Companies (ESCOs) implement energy-saving projects under performance-based contracts, covering measures such as energy efficiency improvements, energy supply optimisation and other energy management solutions across sectors including industry, agriculture and public infrastructure.

Unlike traditional procurement for construction works or equipment supply, ESCO contracts contain a number of specific provisions requiring measurable energy performance before and after project implementation. As a result, every ESCO project requires detailed technical audits both prior to implementation and after completion.

According to the Latvian Energy and Environment Agency, only four ESCO companies currently operate in Latvia.

One of them is RCG Lighthouse, whose (former) Technical Director Vilnis Strazds is currently preparing the technical documentation for Riga’s procurement while simultaneously participating in the tender through another company that he owns, Livarts. This has prompted industry concerns over a potential conflict of interest.

Questions over independence and capacity

No one disputes Strazds’ technical expertise in street lighting. The concerns instead relate to whether a single individual can independently:

• audit approximately 36,000 lighting fixtures;
• prepare technical documentation for a procurement of this scale;
• draft tender specifications; and
• participate in evaluating procurement bids.

Questions have also arisen after Strazds removed much of his employment history from his LinkedIn profile.

His current profile suggests he worked for RCG Lighthouse only as a freelance contractor until 2020. However, archived versions of the company’s website available through the Wayback Machine show that as recently as 22 January this year he was still listed as Technical Director. Furthermore, information submitted to Latvia’s Central Election Commission during last year’s municipal elections also identified him as Technical Director at Lighthouse ESCO.

As journalists cannot legally access employment records protected under GDPR, it is impossible to establish which version is accurate. Nevertheless, the publicly available information appears contradictory.

Can one person deliver the project?

Industry representatives have also questioned whether Livarts possesses sufficient capacity.

According to publicly available company information, Livarts employs only one person — Vilnis Strazds himself — and reported annual turnover of just €55,000 last year.

Given the scale of the assignment, critics argue that it is difficult to see how a single specialist could complete all required field inspections within the contractual timeframe.

Dr. Kristīna Bērziņa, Head of the Specialised Certification Centre of the Latvian Association of Electrical Engineers and Energy Builders, explains that while modern designers have access to sophisticated digital tools such as Google Street View, GeoRīga and orthophoto maps, these resources cannot fully replace physical site inspections.

“The accuracy of lighting calculations depends directly on the quality of the input data. If the initial data are incomplete or inaccurate, even the most advanced calculation software cannot produce reliable results.”

She notes that satellite imagery and street-level photography may be outdated and cannot reliably determine crucial technical parameters such as:

• pole height;
• bracket length and angle;
• precise distances between poles;
• road geometry;
• actual luminaire specifications;
• LED module power;
• optical configuration.

According to Bērziņa, physically inspecting a single lighting pole typically requires between five and fifteen minutes, depending on the level of detail required.

By contrast, reviewing one pole remotely may also take several minutes, yet many critical parameters remain impossible to verify digitally.

Even once all field data have been collected, preparing lighting calculations using software such as DIALux can require several hours for a single street section.

A simple calculation

Based on Bērziņa’s estimate of five minutes per lighting pole, inspecting all 36,000 poles would require approximately:

• 180,000 minutes
• 3,000 working hours
• roughly 19 months of full-time work (assuming 160 working hours per month).

Yet Strazds’ contract reportedly allows only six months for completion.

This has led industry representatives to question whether the project can realistically be completed by one individual.

Previous cooperation with RCG Lighthouse

Procurement data also indicate previous cooperation between Livarts and RCG Lighthouse.

For example, in 2025 Livarts carried out an outdoor lighting audit for Talsi Municipality while Strazds was still employed by RCG Lighthouse. Approximately one month later, RCG Lighthouse won several lighting procurement contracts issued by the same municipality.

Critics argue that this sequence creates the appearance of one company preparing technical documentation while another benefits from subsequent procurement.

Similar patterns have reportedly occurred in other municipalities, including Tukums.

No response from Riga’s political leadership

At the beginning of July, Inc. magazine sent questions to Riga Mayor Viesturs Kleinbergs and Marta Kotello, Chair of the City Council’s Transport and Traffic Committee, asking how such procurement arrangements align with promises of transparent and fair procurement made when the current governing coalition was formed.

Neither official responded.

Comparisons with a previous state project

Observers have also drawn parallels with a previous ESCO street lighting project implemented by Latvian State Roads under the supervision of the Ministry of Transport.

According to publicly available information, that project achieved electricity savings of approximately 40%, although industry specialists have stated that comparable LED modernisation projects typically deliver 70–80% energy savings.

Questions have also been raised publicly regarding procurement prices, with reports suggesting that certain lighting fixtures were purchased at prices approximately six times higher than publicly available retail prices for identical models.

RCG Lighthouse was also the successful bidder in that procurement.

Source: inc-baltics.com