bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 28.07.2017 | Name days: Cecīlija, Cilda
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 Railway electrical lines are also outdated; we will have to replace them soon.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

Bookmakers: the new party has good chances of entering the Saeima

The new liberal party «Par!», whose leaders include former Economy Minister Daniels Pavluts and Saeima deputy Ilze Vinkele will likely pass the 5% barrier in the next Saeima elections, according to Betsafe bookmakers.

Latvia’s retail trade turnover increased 3.1% in June

Compared to June 2016, total retail trade turnover rose by 3.1 % in June 2017. Turnover of retail trade for food products increased by 1.0 % and turnover of non-food products grew by 4.7 %.

Association: alcohol market will decline and people will lose jobs in the industry

The planned introduction of increased excise tax rates within the context of Finance Ministry’s tax reform could cause the alcohol market in Latvia to decline by approximately 7% next year, says CEO of Latvian Alcohol Industry Association Davis Vitols.

Survey: Latvian residents prefer to perform home repairs on their own

According to results of a recent survey, 63% of Latvian respondents have spent this year’s summer season performing home repairs. 59% of respondents always pick summer to perform repairs.

Martins Bondars confident he should «step aside»

Martins Bondars has decided to step down as chairman of Latvian Association of Regions. According him, recent decisions made by members of LAR have not been ones he would personally support.

Unity: electing Sudraba to the committee causes trust in politicians to go down more

Inguna Sudraba’s approval for the oligarch talks parliamentary investigative committee’s board would the equivalent of the parliament deciding not to permit searches in Slesers’ home, Unity members say.

Kalnmeiers still has no time; ‘Send a letter to prosecutor general!’ campaign begins

«Progresīvie» political party has launched a special campaign called «Send a letter to prosecutor general!», in which the party asks Latvian prosecutor general Eriks Kalnmeiers to step down.

End of July and beginning of August promise warm but rainy weather

The last days of July will be largely sunny. Some rain will be present here and there, however. Air temperature will remain within a range of +20° C… +25° C, as reported by State Environment, Geology and Meteorology Centre.

Juncker to held stop food discrimination of EU's eastern members

Reacting to criticism from Slovakia, Bulgaria and other European Union member states on differences in food product quality in Eastern Europe, the head of the EU's executive body, Jean-Claude Juncker, has pledged to help end the «totally unacceptable» practice.

Property purchase and rent trends are similar among Baltic States

Currently the proportion of standard apartments in Riga in comparison with new projects is rather significant – while the number of standard apartments in the capital is 3,200, new projects are limited to only 300 buildings, according to information compiled DNB Bank and Ober-Haus on apartment demand in Latvia and Baltics.

Construction costs in Latvia up 0.2%

Compared to May, the level of construction costs in Latvia increased by 0.2 % in June 2017.

Beer brewers: many will lose jobs because of increased excise tax on beer

If the Saeima supports the initiative on increasing excise tax on beer by 50% this Thursday, 27 July, the number of people employed in the beer industry will decrease 30%, which will especially impact residents of Latvia’s regions, according to Latvian Breweries Union.

Helsinki-Riga route to be tested by Tallink

Estonian ferry and cruise company Tallink is testing this week the interest of passengers to take a cruise trip from Helsinki to Riga.

Where is the piece of land Duklavs’ associates wanted 15 million for?

Ir magazine has surveyed several hectares of land on Daugava River’s left bank, specifically within the territory of Riga Freeport, to find the piece of land that was mentioned by Agriculture Minister Janis Duklavs during his conversation with other politicians in Ridzene hotel.

Opinion: candidates of the last presidency have all been intellectually weak

One of this summer’s hottest and most discussed piece of news was the proposal to allow residents to elect the country’s president. Latvian President Raimonds Vejonis’ 22 June speech to the parliament, in which he proposed allowing the people to elect the president in 2019, caused even more discussions.

Flat rental fraud increases in Estonia

Police in Estonia have observed a increase in fraud complaints in the area of rental flats as fraudsters typically ask for prepayments and deposits for listed flats they do not own.

Latvian troops to participate in Northern Strike exercises in USA

Throughout 27 July – 14 August, more than 70 troops of Latvian Armed Forces will be taking part in Northern Strike 2017 joint land and air exercises organized by Michigan National Guard in USA.

Delna: if the prime minister chooses to stifle emotions, the president should step up

On Wednesday, 26 July, Delna received a response letter from Prime Minister Maris Kucinskis to Delna’s previous letter, in which the organization requested the dismissal of Agriculture Minister Janis Duklavs.

Saeima supports tax reform laws in final reading

Saeima’s Budget and Finance Committee has concluded work on tax reform laws, supporting them in the final reading. Part of the proposals on additional benefits and multiple other matters will be put off for a later date.

Latvian Shipping Company sells its office building on Elizabetes Street 1

On Tuesday, 25 July, Latvian Shipping Company signed an agreement on the sale of its current office building. The buyer and the next owner of the house will be the United Arab Emirates, who purchased the six-story building on Elizabetes Street 1 in Riga for the needs of the embassy, as confirmed by the company.

Farmers Saeima: beef industry in Latvia is not sufficiently developed

Farmers Saeima believes Latvia’s beef industry is not sufficiently developed, and existing farms have not sufficiently stabilized – many farms have major debt. Because of that any kind of support for the industry is welcome.

Puce: Latvia should ratify Istanbul Convention without reservations

For Latvia’s Development political party has turned to Welfare Ministry with a request to ratify Istanbul Convention without any corrections as soon as possible, BNN was informed by the party’s representatives.

More than half of Latvian businessmen work on weekend; study shows

Businessmen normally spend eight hours and five minutes on work every day. More than 58% of Latvian businessmen also work on weekends, according to data from the latest Citadele Index study.

Farmers: crop yield this year will be positive thanks to weather

In Zemgale, crop harvest began a week ago. Harvest of winter crops is almost over. Harvests elsewhere in Latvia will commence no sooner than August, farmers say.

Murniece offers UGF to consider replacing Duklavs

«The policy is that, considering Duklavs’ involvement in Ridzene talks, the Union of Greens and Farmers should consider ways of resolving the situation,» says Saeima speaker Inara Murniece.