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Wednesday 26.04.2017 | Name days: Rūsiņš, Sandris, Alīna
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BATL: intention to electrify railway line is either incompetent or is the scam of the century

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn spite of the industry’s calls over the past two years, Transport Ministry still has not provided a cargo attraction plan, a unified offer for our cooperation partners. Nor do we have a clearly defined transit strategy and development direction, says Baltic Association – Transport and Logistics.

Moreover – lately the transit industry has been experiencing cargo volume decline. To reduce the decline of cargoes, Ventspils port is forced to consider industrialization. Nothing suggests this situation could change in the near future.

It is mentioned that instead of listening to the industry’s opinion and commencing work on stabilization of the transit industry, Transport Ministry demonstrates the desire to realize railway electrification project at any cost. In addition, there is still no clarity in relation to the industry’s future development or predicted cargo volumes. «The ministry intends to spend EUR 690 million to EUR 1.3 billion on this, saying that it would improve ecological situation, refuse the use of diesel trains, increase of overall travel speed and length of trains to accommodate larger volumes of cargoes,» – BATL stated.

It is also emphasized that society is not provided with detailed information regarding the project’s impact on Latvia’s national economy in a long-term perspective. Possible risks are not explained in detail as well.

To recover the finances invested in the project worth EUR 1.3 billion, from which only EUR 347 million will be covered by the European Union, Latvia would have to accept a contract to guarantee transportation of no less than 40 million tons annually 40 years in advance. However, considering the geopolitical situation and the near-sighted decisions made by Latvian officials and declining cargo volumes, Latvia can only dream of such volumes, experts say.

It is reminded that historically Latvijas dzelzceļš and Latvian ports have always relied on Russian cargoes. Russia has begun developing its own ports. This means the country will gradually start diverting more and more of its cargoes to its own ports. As far as it is known at the moment, Russia has no plans to cancel this plan. Instead of searching for new cargo attraction routes, the ministry responsible for the industry claims with not economically rational reasons that electrification will somehow improve the country’s competitiveness.

There are currently no answers to the question regarding the planned electrification volumes:

-Will the electrification process apply to the entire railway network in a gradual manner or is it planned to affect one route at a time? If it is planned to electrify the railway only leading to Riga and Ventspils ports, it should be said that it would be clear to everyone that this project does not cost more than one billion euros.

-Where will Latvia even get the necessary amount of electricity for the railway? How much will this cost? How will this affect the price of electricity?

These are only some of the questions the ministry is not prepared to answer, BATL notes.

«It is clear that someone will have to pay for everything. But who? If cargo volumes continue to decline, which is likely, it will be necessary to recover the billion at the cost of cargoes, which means increasing tariffs. This will likely cause an avalanche affect and reduce the interest of cargo owners to lose interest in Baltic ports, choosing in favour of Russian ports, Klaipeda or Tallinn,» – notes BATL president Inga Antane.

It is also emphasized that such large-scale projects require industry and public support. But instead of allowing society to find out more about grandiose plans for the future, identifying risks and finding opportunities for discussions and coming up with solutions, the ministry has decided to classify the report on this project.

In the end, it is possible Latvia’s population will have to pay for this project, like people were forced to pay for Parex Bank. Transport Ministry’s haste to realize this project and excuses that it is necessary to get the next funding from EU withstands to criticisms, BATL states.

Ref: 103.109.109.6783


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