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Tuesday 20.02.2018 | Name days: Smuidra, Vitauts, Smuidris

«Slesers projects» in Latvian Railway put aside

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Ugis Magonis

Ugis Magonis

Several projects actively forwarded under Ainars Slesers as the Head of the Ministry of Transport are no longer topical for the Latvian Railway (LR), instead the key priorities include other projects worth millions of lats and likely to get EU funds.

It is no longer topical to build a railway linking the airport Riga and the City Center, although the project is still worked on, Latvian Railway Board Chairman Uģis Magonis told in an interview with the business news portal BNN, adding that it is not a priority and will not be carried out due to the lack of finances. Similarly, he doubts further implementation of the project approved at Slesers time  – a terminal and infrastructure construction on the left river bank of Daugava, Krievu island, for the needs of the port. It was planned to transfer coal terminals from Daugava right bank to the left one, thus shifting the burden off the City Center. However, the project has halted. Magonis expresses a cautious forecast EU money meant for this project will be directed to other projects.

He speaks about the LR future and touches upon the topical issue of the Corruption Prevention and Combatting Bureau investigation against the LR Board and Magonis himself. I forecast it will be similar to the case of Latvenergo – a huge fuss with nothing within it. I do not know who is benefiting from that and I perceive it more as politics, Magonis told in the interview.

What was the last year like for the Latvian Railway?

All in all, 2010 was a successful year. Of course, there is 8.4% cargo drop, but we had expected 10%. We are glad we are good at cautious planning, leaving reserves. Consequently, we did not have to change the budget in the middle of the year, on the contrary. I believe the financial performance will be better than forecast, yet it is too early to speak about it – there is still enough time to compile the data.

How is it going with different Latvian Railway infrastructure projects?

Speaking about the most topical projects, we have to finish the already existing ones – signalling modernisation first and second stage and hot-box detection systems. These projects were already initiated in the previous budget period to round up in 2007-2008, however they have prolonged due to technical reasons. We should finish them this year.

The second one is a very serious project on design and construction of the second railway track in section Skriveri – Krustpils, with an agreement concluded last year. This is our top priority.

Kundzinsala will keep developing as a port to form a considerable part of Riga Port in future, from the perspective of logistics. Port has contributed a lot to this project. As to us, we have to ensure a runway. The Port has even undertaken to build a bridge over Sarkandaugava junction. We will work on creating a good throughput there.

What about Daugava left bank project?

This is a problematic issue. Krievu island terminal is meant to shift business from the right bank to the left one. With a friendly business environment there will be more cargo and new investments to develop businesses. However, for the time being, it seems the right bank companies are not willing to move to the left one – it is good for them the way it is and no one is forcing them to leave the center. Such shifts need money and a new modern terminal would require additional funds as well, consequently, the question is how the funds will pay back and why invest where you can as well not do it. I better not forecast the future of this project, as from the part of the LR it is Skirotava station Bolderaja-2, from the part of the port – new investments providing Krievu island with a dock and a railway. I am cautious, so I forecast the EU funds meant for both the port and the railway will be directed to other projects.

What is currently going on with the project providing building a railway line from Riga City to Riga Airport?

Such future projects apply to Riga Airport. Currently there are ongoing studies what to do with the traffic in and around Riga. We must decide whether the airport is linked with the city by a low-floor tram or a railway, however this project is not a priority and will not be carried out in near future, including due to the lack of finances.

Another grand project we have not yet agreed on the direction of which is Rail Baltic and a fast train Riga-Moscow to supplement it, thus marking the project as a transport corridor between EU and Russia, with neither Lithuania, nor Estonia near it. This would give huge passengers turnover, thus adding to the efficiency of Rail Baltic. It is important to know where the money for Rail Baltic and Riga-Moscow projects will be drawn from. These are high-level political projects – serious business projects. If they are carried out, it will mean considerable investments into the Latvian economy, signalling investors for safe environment.

Ports see considerable general cargo and containers growth. Is the tendency similar in the railway?

Actually, yes, we did compensate for the last year’s performance with more fertilizers coming in from Russia and Belarus. New ore and metal cargoes appeared as well, minimal though. This could compensate for at least some of our losses. We expect coal cargo will slightly drop this year as well, because new Russian corridors have been launched and we cannot do anything about that. We have to look for new cargoes to compensate for it.

Cargo containers are topical, reporting a growing flow, however we need much more of them to compensate for bulk cargo. The tendency is positive, the business was launched last year already and is to keep developing this year. We care a great deal for NATO cargoes as well, because the competitors Lithuanians and Estonians are also on watch.

Can we lose these cargoes?

The government, not only the Ministry of Transport, but also the Ministries of Foreign Affairs and Defence are dealing with this issue. Lithuanians say they are also resolved to do it, but I’d rather say there are bluffing. We are not ensuring all the railway line, we are only responsible for the territory of Latvia, tariffs, agenda. But the Russian, Kazakhstan tariffs are important as well.

Media is reporting it is not possible to discharge containers at Ventbunkers terminal, as the supplier Litasco is practically blocking it. What is the current situation and the possible solution?

The Latvian Railway cannot influence the situation at all. Not only tanks, but also other rail-cars are at a standstill there. About ninety trains were at a standstill two years ago, the current number forms about sixty. The situation is unpleasant, creating additional burden and costs, including the guarding of them. Such objective conditions as winter, when it is difficult to discharge cargo that is freezing in the tanks are understandable, but this is not the case – more than 30 train sets are left there only because the owners of the terminal cannot agree between themselves. We are not benefiting from that. We need those rail-cars that are standing there. On the one hand, its additional burden to our infrastructure, on the other hand, new cargoes have halted as well.

Rumour has it a new shipper is developing, capable of attracting a huge part of the cargo flow and regulating the market, similarly as once Venspils Mayor Aivars Lembergs owned LSF Holdings. Would that be good for the market?

I cannot comment upon that for the time being, because I do not see that any of these companies could run for this position. We have a lot of shippers, however if there is one under which there are many of them operating, it is not profitable for us. While it would be good, if the forwarder were capable of attracting additional cargoes. I do not believe our tariff policy would permit one shipper getting special discounts, as they are granted only for additional volumes.

Media reports there is a big chance you could lose your post. Do you feel these problems in daily work? Have any changes taken place?

Subsidiaries and the parent company have changed their Boards – I have already got to know these people and I can only say good about them. They can strengthen the management, I do not see any problems there. They are knowledgeable in the railway sector. I know a case has been initiated against me, but that is not a tragedy. When it reaches the court, they will see there is nothing to find against me. There are also other authorities trying to find something against me and other Board members. However, no one has approached me directly, thus I cannot comment upon that. Of course, this is causing additional pressure on everyone. I forecast this will be similar to the case with Latvenergo with a huge fuss nothing within it. I do not know who is benefiting from that and I perceive it more as political games.

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