Orpo stands firm on state offer for Palokki dam

Prime Minister Petteri Orpo has defended the Finnish state’s 40 million euro offer to buy the Palokki dam and power plant in Heinävesi, Yle reports. The owner, Pohjois-Karjalan Sähkö, considers the offer far too low.

Orpo said on Friday that the state would not change its offer. He described 40 million euros as a starting point, with the final price to be determined through a process agreed with the owners.

“The electricity company now needs to understand that a market-based price will be paid, and it would be worth being part of this,” Orpo said at an invitation-only event in Palokki organised by the East Finland Union and the municipality of Heinävesi.

Representatives of the municipalities that own Pohjois-Karjalan Sähkö were invited to the event, but representatives of the company itself were not present.

The state wants to buy the dam and power plant so that the Palokki rapids can be restored as spawning and juvenile habitats for endangered landlocked salmon and brown trout.

Negotiations have made no progress

Pohjois-Karjalan Sähkö considers the power plant important to its operations and estimates its value at 80 million euros, twice the state’s offer. The dividends paid by the company are also an important source of income for its owner municipalities.

Orpo said the 40 million euros paid by the state would give the company an opportunity to invest in other profitable activities.

“They could run an even better electricity company in the future and secure dividends through that as well,” he said.

According to Orpo, negotiations with Pohjois-Karjalan Sähkö are continuing, but no progress has been made.

Orpo also said that restoring the rapids would make North Karelia more attractive as a tourism destination.

Further seminar planned for September

Representatives of Joensuu, Heinävesi and Kuopio said at the event that they supported selling the dam and power plant to the state. Kitee, Liperi, Nurmes, Kontiolahti and Outokumpu have not yet formed a position. Some of their representatives suggested that the matter could be put to a vote.

Juuka, Ilomantsi and Polvijärvi did not send representatives to the event.

Orpo said another seminar would be held in mid-September, where the state would explain its offer and how the price had been determined.

“The aim is to find answers to all the questions and thereby make it possible for all the municipalities to reach a positive decision,” Orpo said.

Donations to be collected in fund

The event was also told that a fund would be established to support the restoration of the Palokki rapids. All donations will be collected by the Vapaa Palokki fund.

The Holdfast Collective fund, which operates behind clothing company Patagonia, has previously pledged two million dollars, or 1.7 million euros. The European Open Rivers Programme organisation has also pledged 1.9 million euros for the restoration.

Harri Broman, who spoke at the event, said Broman Group would pay for the restoration of one of the Palokki rapids. He estimated the cost at about 500,000 euros.

Broman Group bought a 1.7 percent stake in Pohjois-Karjalan Sähkö from the municipality of Kaavi earlier this year.

Broman said he was dissatisfied with the company’s management over the Palokki issue and called on its board to reconsider its decision to reject the state’s offer.

The Palokki rapids were dammed in 1961.