Five years ago – in 2012 – Financial Times named Ventspils Freeport as the second best port area in the world. Ten years ago – in 2007 – Ventspils Freeport’s total volume of transhipped cargoes had exceeded that of Riga Freeport – 31 million tonnes to 25.9 million tonnes, respectively. Last year, however, Ventspils Freeport’s cargo turnover was only 18,8 million tonnes, whereas Riga Freeport’s volume was 37 million tonnes.
What can be done to help Ventspils retain its advantages was mentioned by President of Baltic Association – Transports and Logistics Inga Antane in an interview to Ventspilnieks.lv.
It is emphasized that non-freezing waters and great geographical locations were the factors that helped Ventspils Freeport achieve its results in the past.
Your association represents the largest businesses working at Ventspils Freeport and the largest taxpayers the city has. But if the cargo volume continues to drop, not only will those companies suffer losses, but also the city’s budget will lose valuable revenue. What can be done to ensure cargoes continue being carried by rail towards Ventspils and Liepaja?
First of all I would like to add to what you just said that Ventspils is the northern most non-freezing port situated on the eastern coast of the Baltic State. Secondly, Ventspils Freeport is the deepest port of the Baltic Sea. These are two of most important advantages Ventspils Freeport has over other competing ports.
Indications of cargo volumes declining in Ventspils’ direction have been visible over the past several years. I have said it many times – if we lose Ventspils, Latvia’s national economy will suffer greatly. We cannot allow Ventspils, Riga and Liepaja to compete with one another. All of those ports, as well as the railway, are connected and united in Latvia’s best interest. They belong to the nation. They are our country’s national treasures. But because of the unresolved matter with unified tariffs, Ventspils and Liepaja ports are put at a disadvantage when compared with Riga. The road to Ventspils and Liepaja costs cargo owners two to four euros more per each ton. It is worth keeping in mind that cargo owners will always pick the most economically beneficial offers. If they do not find Riga attractive, they will divert their cargoes to Tallinn and Klaipeda. Every lost ton means loss for the state budget. Introduction of a unified tariff would resolve this situation – if it cost the same to carry cargoes from Zilupe to Ventspils or Liepaja as it is to Riga, the volume of cargoes regularly carried in Latvia would increase and everyone would benefit from it – the country, port cities and Latvia’s railway.
Secondly, as I have said it many times, we need to work more intensively on the development of a single national transit corridor. We have invested enormous financial resources to create an attractive railway and port infrastructure, but we have not been able to offer its as single offer from Latvia. We’re working to fix that.
Thirdly, we need to modernize the national railway network to make sure trains are able to carry more cargoes. This would help reduce transport costs and improve the quality of the surrounding environment. For reasons unknown to me, this has not yet been done.
Perhaps we should just accept that the role the port plays in the lives of Ventspils residents continues to decline and we should instead focus on the city’s industrialization?
The transport industry – transit and storage are and will remain on the main national industries for Ventspils and the country as a whole.
Development of activities in the city and port have always been closely tied to transit cargo flow. With that, any changes in this industry will directly affect the city’s growth.
Ventspils residents have unique infrastructure in their hands. It has enormous potential for creating jobs and attracting investments. The port’s function has a direct effect on the city’s economy and employment level. Therefore it is highly important to continue developing Ventspils port and services associated with it. We have to do everything we can so that the city and its residents gain maximum benefit from the port.
What can be done to ensure that businesses working at the port become some of the best employers in the city? According to information from the city council’s website, average wage in companies licensed to work at Ventspils Freeport was EUR 1,018 in 2015, which is not a small amount.
First of all, it should be said that Ventspils Freeport already works a lot to improve infrastructure, which is commendable. Nevertheless, it should be added that infrastructure alone is not enough – a lot depends on the capabilities of stevedores to attract cargoes. But in order for businessmen to attract said cargoes, they require specific tools. It is not enough to say we have a good port and well-ordered infrastructure, because the first thing cargo owners ask is: how much will it cost me? If our price is not competitive enough and higher than the price offered by Riga or Klaipeda port, we lose. Nevertheless, there are matters in which the municipality could have gotten involved in a long time ago. This includes, for example, technical improvements of the railway in Ventspils’ direction. Establishing so-called pockets that would allow the railway to carry longer trains and reduce costs, fuel consumption and negative impact on environment. Modernization of the railway line is the responsibility of LDz. However, Ventspils City Council is influential enough to initiate the resolution of this matter on Transport Ministry’s level. Why this matter has not yet been resolved, I do not know. You can say that modernization of the railway line would require significant financial resources, but I believe it would be easy to attract finances from EU funds for such a project.
BATL has urged the government to review tariffs for Ventspils and Liepaja directions since 2014. It is clear that equalizing tariffs would benefit Ventspils and its residents. However, one of the most influential municipalities in Latvia pretends as though there is no problem. Even prior to 16+1 summit I wrote to the government about the need to create a unified transit corridor and tariff. I did receive a response expressing support for this idea from Liepaja. Ventspils said no.
Of course, the municipal government cannot affect the freeport’s work directly. But the city’s administration can contribute to the freeport’s and infrastructure’s development. There are representatives of the municipality in the freeport’s authority. Their decisions can affect infrastructure quality and accessibility, as well as port development matters. The municipality should not create any obstacles to impede the work of companies at the port. There has to be balance between interests of the city and the freeport.
Perhaps the city’s industrialization is more important than the port’s development? New factories, new jobs and new investments…
I do not agree that Ventspils will successfully replace transit with industrialization. Before it is possible to bet everything on industrialization, there has to be a very accurate long-term calculation of costs and benefits. Ventspils already has multiple factories. The question is – how much to they contribute to the budget? Factories can be and should be developed. But we do need to decide first what we want to produce and what will be the added value of those products. I have only one question – how will Ventspils’ residents and the region benefit from it?