bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 23.01.2017 | Name days: Strauta, Grieta
LatviaLatvia

Economist: Latvia may lose competitiveness as a transit corridor

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«It is no secret that the volume of cargoes carried by rail in Latvia has already dropped by 20% this year. This can be explained with the unfortunate situation with prices of raw materials, coal demand decline in the west and Russia’s political decision to divert large volumes of cargoes to its own ports in the Baltic Sea. We have noticed recently that Russia’s threats tend to become real – state companies have been ordered to divert cargoes through its own ports, around Latvia. Such a decision is not only politically motivated, but also economically motivated – Russia hopes to recover its investments in St Petersburg, Ustyug and Primorsk,» – says Nordea Bank economist Gints Belevics.

«One of the main reasons why railway electrification is necessary lies in current trends in the country’s railway infrastructure. Similar to how we had stopped using steam-powered locomotives, the time of diesel trains has come to an end. They are less effective than electrical trains, they require more maintenance and they pollute the environment with harmful emissions. Electro-magnetic levitation technology is too far-away in the future for us, so we should get by with less futuristic technologies for the time being. It is also worth mentioning that Latvia’s current fleet of locomotives has models that should be put in a museum, not the railway. Railway electrical lines are also outdated; we will have to replace them soon.

Secondly, if we look at our neighbours, we will see that Belarus has begun gradually increasing the proportion of electrified railway lines using Chinese funding. Lithuania also intends to electrify the railway line from Klaipeda to the border with Belarus. This creates concerns that Latvia could lose its competitiveness as a transit corridor, with more cargoes being sent to Klaipeda Port. This especially applies to cargoes from Belarus. Belarus, not China or the Far East, could become a replacement for Russia as a source of cargoes. This is why it is vital that Latvia does not fall behind its transit competitors,» – Belevics said.

«It is estimated that 38% of railway electrification investments could remain in Latvia. I believe this number can be increased to at least 60%, because Latvia has companies engaged in metallurgy and electronics. These companies can secure supplies for the electrification project. Railway electrification would benefit Latgale the most. This project can also have a positive geopolitical impact. The construction process can also provide additional jobs for the population. It is also worth looking into synergy possibilities with Latvenergo for the use of infrastructure to be used for the project’s needs.

With this project, Latvia has an opportunity to use EUR 347 million provided by the European Union for environmental projects. Without performing railway electrification, it would be impossible to recover finances in such an amount in other projects. […] Considering that the electrification project has remained in active discussion for at least a decade, we have come to the conclusion that benefits, expenses, risks and possible execution variants have been researched sufficiently enough to say the project is not too green and not rushed for the sake of getting EU money,» – said the bank’s expert.

According to him, «questions could appear in relation to the chosen railway electrification routes and the order of their introduction. It is likely that electrification should be carried out for the railway routes connecting Riga and Ventspils with industrial ports. This, however, makes this project very expensive. Leaving one of those ports out of the game would be dangerous from a competitive viewpoint. This especially applies to Ventspils, which already loses to Riga because of its longer railway line. If electrification starts with Ventspils, as it is recommended by LDz, it is important to avoid leaving Riga without attention. It is no less important to maintain the cargo proportion between Riga and Ventspils ports equal.»

«There are undoubtedly many risks associated with such a massive infrastructure project. This is why it is vital to reduce them as much as possible in order to ensure more benefits than losses. Without taking timely actions, we will lose our competitiveness on the international stage. Transit industry has always been the backbone of Latvia’s state and territory. The inability to make timely decisions has often been our main problem. This resulted in our competitors getting ahead of us. Reasonable risks should be taken on a state level from time to time,» – Belevics concluded.

Ref: 102.109.109.6801


Leave a reply

Reirs: ME system is good, but only in relation to the people that need it

Estonia’s experience shows that there can be significantly larger minimal wages and significantly lower unemployment level than what is found in Latvia, Diena was told by Welfare Minister Janis Reirs.

LBLA: businesses in Latvia find it difficult to produce biological food

There is still a disproportion between production and processing volumes of biological agriculture products in Latvia. Companies produce more than they process. This is why it is important to develop processing, believes board member of Latvian Biological Agricultural Association and Aloja Starkelsen Janis Garancs.

PHOTO: women’s solidarity march in Riga

On Saturday, 21 January, voluntary women’s solidarity events under a single title – Sister march – were organized around the world. In Riga, the event gathered at least 200 people.

De facto: NA opposes businessmen’s efforts to change requirements for guest workers

Business organizations want the government to review requirements for attraction of guest workers, because it is nearly impossible to find workers in many fields. But the proposal’s viewing in the government has come to a halt because of arguments against it from the National Alliance, as reported by De Factor programme of LTV.

Kudors: Baltics should arm themselves with strategic patience

In relations with Russia, Baltics should arm themselves with strategic patience in the next several years, as stated in Latvia’s Foreign Policy Institute’s compilation on Latvia’s external and security policy.

Little precipitation is expected in Latvia this week; frost expected

On Monday, 23 January, weather in Latvia will be dictated by a small low atmospheric pressure area. With that, some precipitation is expected in many parts of Latvia: mostly rain and wet snow. Wind will draw in from the south-west and air temperature will stay within 0° C… +4° C, as reported by Environmental, Geology and Meteorology Centre.

Week in Lithuania. CIA declassifies document on Lithuania’s post-WWII guerrillas

A report about guerrilla fighting against the Soviet occupation after World War II is among hundreds of thousands of declassified documents published online by the United States Central Intelligence Agency.

People no longer believe in their own country, because they associate it with people who make decisions

The biggest threat to Latvia is the fact that society, including state officials, is afraid. People are afraid of change, afraid of voicing their thoughts (thoughts that often do not comply with the politically correct stance), afraid of being misunderstood. Fear makes it harder to develop. It limits people’s internal freedom. Such is the opinion Inga Antane, president of Baltic Association – Transport and Logistics and sworn attorney of Triniti law firm, explained in her interview to Atbalsts.

Expert: «Lithuania’s renewed National Security Strategy is a «hodgepodge»

This week, the Lithuanian Parliament has overwhelmingly approved a renewed National Security Strategy, laying out 14 major hazards and risk factors to national security.

Industry: advertisements contribute the entire economy of the European Union

Every euro invested in advertisement has seven times the influence on a country’s GDP. Every one euro brings seven euros in return to the country’s GDP, as emphasized by Latvian Advertising Association, noting that advertisement sector contributes to employment in all of the European Union.

Six deputies applied with administrative penalties in Saeima’s autumn session

According to information provided to the parliament, six deputies were applied with administrative penalties during Saeima’s autumn session.

Slower economic growth for Estonia forecast – at 2.2% - for 2017

The economic growth of Estonia in 2017 will be slower than previously expected, Swedbank economists have announced lowering their previous economic forecast for the Baltic country by 0.2% to 2.2%.

Latvian and Lithuanian authorities dismantle two criminal groups

Latvian State Revenue Service’s Finance Police has successfully apprehended two organized crime groups that caused significant damage to the state budget in 2015 and 2016 by realizing different VAT fraud schemes.

Estonia to drop special pensions, push forward sweeping pension reforms

The Estonian government has decided to drop special pensions and to push forward with plans regarding other significant changes in the pension system, including tying the retirement age to the average life expectancy.

KNAB performs inspection about Jakrins’ approval in the board of Rīgas satiksme

Corruption Prevention and Combating Bureau intends to inspect if the approval of acting head of Riga City Council’s Transport Department Emils Jakrins in the management board of Rīgas satiksme had any signs of breach of good management principles.

Chinese GDP up 6.7% in 2016

World’s second largest economy has seen a 6.7% growth in 2016, Chinese official data show, which indicate that the gross-domestic-product increase has been slower than the 6.9% seen in 2015 and the slowest since 1990.

Dozens buried in Italy’s avalanche-stricken hotel

Italy has been shaken by a number of earthquakes this week, one of which has triggered an avalanche burying a mountain hotel, where at least two people have been found dead and dozens more a searched for through rubble and snow.

Weekends to experience frost and thaw; drivers urged to be careful

Weather in Latvia will not be stable in the next couple of days – cloudy weather with some precipitation will be mixed with periods of clear sky, according to State Environmental, Geology and Meteorology Centre.

Logistics Industry Council assesses results of 16+1 summit

Experts say container cargoes have the potential to bring major contribution to the logistics sector. With that, LDz Logistics intends to continue organizing the next container train from China, as well as cooperate with partners from Belarus and China in the context of the Great Stone industrial park, as BNN was informed by Transport Ministry’s representative Ilze Greiskalna.

Parliament supports amendments to avoid expensive land-measuring actions

It will no longer be necessary to prepare land border plan for entry of land units in the Land Book. It will help save budget funds, as it will not be necessary to perform land-measuring actions, as reported by Saeima press-service.

CP supervisors concerned about Latvijas Gāze’s contract terms

The Competition Council is concerned about Latvijas Gāze’s behaviour in the process of liberalization of the country’s gas market. Economy Ministry has submitted a draft of the Gas Trade and Use Rules to the Cabinet of Ministers Committee for review.

Germany seeks clarity from Trump’s government, to boost military spending

Berlin has emphasised plans to increase defence spending after facing criticism from upcoming U.S. President Donald Trump on NATO countries not meeting their spending commitments.

Saeima re-elects Elita Krumina as State Auditor

On Thursday, 19 January, the Saeima re-elected Elita Krumina in the post of State Auditor.

Saeima supports formation of aircraft passenger data registry to combat terrorism

On Thursday, 19 January, Latvia’s Saeima approved the Aircraft Passenger Data Processing Law in the final reading. This will form the passenger data registry.

Milk retail price in Estonia reaches 55 cents per litre after to price hikes

After a long period of low milk purchase prices in Estonia, milk retail prices in the Baltic country have increased twice, reaching the point where famers receive just enough to cover milk production costs.

Newest comments