bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 21.04.2018 | Name days: Marģers, Anastasija
LatviaLatvia

Baltic Express: our children will have to pay for Latvia’s railway electrification project

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«Latvia’s railway electrification project will not only fail to provide any tangible economic returns but will also cost so much that our children and their children after them will have to pay for it. Similar to any investment project, those who wish to use it expect also a return of investments. Unfortunately, we can predict that the cost of using Latvia’s railway infrastructure, which is already the highest in Europe, will only grow as a result of this project. Unjustifiably high costs have never benefited competition,» says AS Baltic Express Train Movement Organization Office manager Linards Gulbis.

«Imagine a store in which prices are so high people simply cannot afford any purchases. The store’s management is well-aware there is no room to increase prices even further, but they still want money. Then they adopt a fee for use of doors, a fee to remain in the store, a fee for the use of heat, etc. How many buyers would such a store have?! None! This is the kind of situation Latvia’s railway industry risks falling into,» says Gulbis.

He reminds that the project’ s representatives all claim that by going through with it Latvia demonstrates its presence in the transit business sphere, and that without it Lithuania, Estonia and other competitors will surely win over clients. «Unfortunately, our competitors will only benefit from this project because with electrification of Latvia’s railway infrastructure we can forget about competitive prices. In addition, the continuous cargo decline will only make this project and economic catastrophe for the country,» Gulbis continues.

«The study performed in 2012 made it clear that electrification would be acceptable only if our railway lines are used to transport a constant volume of cargoes. In 2011 and 2012 the volume of cargoes was 60 million tonnes. Last year, however, cargo volume was only 40 million tonnes. This means the main factor for the project’s viability – volume of cargoes enough to sustain costs – is absent. Ideally speaking, it would be best to postpone the project and reassess it. Another study performed in 2011 warned that benefits from the electrification project will be possible only if electric drive is performed along the entire corridor. If carriers are not permitted to provide transport services and use LDz network and diesel power instead of electric power, it is likely investments will not be returned.

Considering that the electrified railway line is planned to be established only as far as Riga, the project is already doomed to fail. It is but one of many factors,» said Gulbis.

As mentioned by authors of the study, one of the most important aspects is the price change of diesel fuel in relation to the price change applied to electricity. «If the rate at which electricity prices increase is higher than that of diesel fuel prices, the project’s financial longevity may be put at risk,» as mentioned in the study.

«Here I would like to mention one of the loudest scandals in recent months – the one associated with mandatory procurement component. In 2016 alone MPC payment reached EUR 237 million! Every single Latvian resident and businessman paid this money through electricity bills. There are justified reasons to believe that households and businesses will have to pay even more for electricity once the railway electrification project is completed. The average electricity price per kWH (EUR 16.2) is already higher than the one in Estonia (EUR 12.4) and Lithuania (EUR 11.7). What kind of improvement of competition will this project bring?» said Gulbis.

«Because the decision regarding railway electrification has no economic need, and is actually a political ambition, none of the aforementioned risks have been taken into account. Moreover – an enormous and unreasonable burden is put on the shoulders of cargo carriers. Only part of the project’s costs will be covered from finances of the European Union. Replacement of diesel trains with electric models is now a ‘voluntary duty’ of active businessmen. Let’s calculate – one Siemens diesel locomotive costs around EUR 5 million. One electric locomotive will cost at least EUR 8 million. Businessmen have to reform their electric locomotive park, a new repair base, train new specialists and sustain two locomotive parks – cargoes will be carried to Riga using electric trains, and using diesel trains from Riga to Ventspils. Only politically motivated experts see economic benefits from the project. It will not benefit Latvian residents at all,» Gulbis concluded.


Leave a reply

Economy Ministry: producer prices will affect dynamics of raw material prices

Producer prices in industry will grow in 2018 similarly as they had in 2017. Producer price level is largely affected by fluctuations of raw material prices in the world, as noted by Latvia’s Economy Ministry.

PUC: Gaso’s separation from Latvijas Gāze was legal

After examining documents submitted by the transmission system’s operator, the Public Utilities Commission concluded that activities performed by AS Gaso as part of reorganization of Latvijas Gāze were sufficient to ensure compliance with requirements for independence, as reported by PUC representatives.

Industrial producer prices in Latvia up 3.5%

Compared to February, level of producer prices in the Latvian industry rose by 0.2 % in March 2018. Prices of products sold on the domestic market grew by 0.1 %, but prices of exported products went up by 0.4 %.

Municipality: after meeting in summer, British Steel refused to buy KVV Liepājas metalurgs

After the meeting that took place at the end of August 2017, British Steel, which had previously voiced an interest in KVV Liepājas metalurgs, refused to purchase the bankrupt company, says Liepaja City Council chairman’s advisor for public relations matters Andrejs Rjabcevs.

SRS determines Latvian officials with the largest salaries

Thanks to real estate transactions Prison Administration Chief Ilona Spure and Healthcare Minster Anda Čakša had the largest income among state officials in 2017. The holder of the largest wage among state officials remains the governor of the Bank of Latvia Ilmārs Rimšēvičs, according to information compiled by the State Revenue Service.

Total tax debts in Latvia – EUR 1.255 billion

At the beginning of April total tax debts in Latvia, including outstanding, halted and payment extensions, was EUR 1.255 billion, which is 3.2% lower than the previous month.

Eight-year-long Latvian-Russian state border demarcation process concludes

Latvian-Russian state border demarcation documents have come to force. 21 April 2018 marked the conclusion of the two countries’ joint border demarcation process that lasted eight years, as reported by Latvia’s Foreign Affairs Ministry’s press-centre.

Prosecutor general turns to Constitutional Court against MPC regulations

Latvia’s Prosecutor General Ēriks Kalnmeiers has submitted a case to the Constitutional Court about the non-compliance of the mandatory procurement component with the country’s Constitution.

Unity may become New Unity; Kariņš may become prime minister candidate

Unity may start in upcoming Saeima elections with a new name – New Unity. The party may pick MEP Krišjānis Kariņš as its prime minister candidate, as reported by Panorāma programme of LTV.

France to fine for naming veggie foods in meat terms

In France, vegetable-based products such as soya steaks or vegetarian sausages marketed as meat substitutes are to be banned in France for misleading consumers as it will be prohibited for food producers to use any meat terms to label products that do not contain meat.

Breach intensity on a rise near Latvia’s state border

Two groups of Vietnamese citizens were caught in an illegal attempt to cross Latvia’s border and multiple cigarette-smuggling attempts were thwarted by authorities in April, as reported by Latvia’s State Border Guard.

Latvia downgraded in openness of civic space rating

Citing Latvian laws as showing less respect fundamental freedoms since 2017, CIVICUS, the international organisation promoting and monitoring civil society and citizen participation in democracies, has downgraded the rating of the openness of the civic space in Latvia from «Open» to «Narrowed».

Authorities to check Riga City Council member Frolovs’ possibly fictive employment in Getliņi Eko

Corruption Prevention and Combating Bureau has commenced an inspection following Riga City Council deputy Juta Strīķe. In it, she detailed concerns about the possible fictive employment of city council deputy Vladimirs Frolovs in Getliņi Eko.

Jekabpils Council divides a pie, not duties; will the management change?

Disputes have commenced amidst the ranks of members of Jekabpils City Council – coalition member Kristīne Ozola from the National Alliance says behaviour of the city council’s management made her change her mind in regards to supporting the ruling coalition.

U.S. urges Moscow to address election, chemical weapons' and Ukraine issues

The United States government has asked the Kremlin to act on U.S. concerns on election meddling, the Salisbury chemical attack in UK, as well as the military developments in Ukraine and Syria.

Latvijas Krājbanka’s administrator recovered EUR 114,800 in March

The administrator of the liquidated Latvijas Krājbanka EUR 114,823 in March, which is 16.9% less than a month ago, according to the report published in Latvian Herald.

Basque militants ETA apologise to killed and injured readying for dissolution

ETA, the Basque military organisation that has fought for the establishment of an independent country in northern Spain and south-western France for 50 years, has apologised for causing harm to victims of its campaign.

Every second resident in Latvia has a loan, and every third – a missed payment

Last year, the number of private person loans had increased nearly 10%, according to the Credit Information Bureau’s data exchange system. Currently this institution’s data archive contains entries for 899 thousand assets in private persons’ contracts. 290 thousand private persons have missed some of their payments.

State Secretary: Latvia and China share good economic cooperation perspectives

To present topical issues of Latvian-Chinese economic cooperation to businessmen, as well as contribute to formation of new business contacts, officials have launched the Latvia-Ningbo Economic & Trade Cooperation Symposium, as reported by Foreign Affairs Ministry.

Wet summer boosted air travel via Tallinn Airport

In Estonian passenger aviation, a considerable 19% growth has been observed by the Tallinn Airport in 2017, which has explained the increase in passenger numbers partly with unusually bad weather conditions.

ABLV Bank urges FinCEN to withdraw «exaggerated accusations»

Lawyers of ABLV Bank, which is currently in the process of self-liquidating, urge US Department of Treasury’s Financial Crimes Enforcement Network to withdraw its published proposal, which details how ABLV Bank’s management had allegedly used bribes to influence Latvian officials and breach sanctions against North Korea.

Stoltenberg: NATO has no plans to boost military presence in Baltic States

NATO does not plan to increase its presence in Baltic States, which have requested additional aid against Russia’s potential aggression, as announced by the alliance’s Secretary General Jens Stoltenberg.

Mass evacuation in Berlin to defuse 500 kg bomb

In Berlin, after an unexploded bomb weighing 500 kg has been discovered, part of the German capital is being evacuated on Friday, April 20, in order to defuse the World War II weapon.

Friday will be warm and sunny in Latvia; weather to become cold and rainy later

Friday will be warm in Latvia, but weather will change on Saturday and Sunday – wind speed will increase and air temperature will drop. A wide low atmospheric pressure area above Northern Europe will be dictating weather next week. This means there will be more rain in Latvia, as reported by State Environment, Geology and Meteorology Centre.

New Cuba's President sees no room for capitalists in country

In Cuba, its First Vice-president Miguel Díaz-Canel has become the first President of the communist Carribean country ending the rule of Castro brothers.