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Tuesday 25.10.2016 | Name days: Beāte, Beatrise

Experts estimate losses from Russia’s refusal to use services of Latvian ports

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia will suffer losses worth EUR 200-250 million every year if Russia refuses to use Latvia’s transit corridor, as announced by Transport Ministry’s parliamentary secretary Edgars Tavars.

«Latvia’s logistics sector reaches 10% of GDP and provides jobs to approximately 100,000 people. If we look at domestic cargoes, 50% of transit consists of Russian cargoes. Loss of those cargoes would cost the state budget EUR 200-250 million every year. That could impact 20,000-30,000 workers. There could be considerable losses,» – Tavars warns.

According to him, attraction of cargoes from Belarus and China will only partially compensate the loss of Russian cargoes. Decades could be necessary to recover from that loss, Focus reports with reference to the official’s words.

The study performed by EY one year ago, shows that full halt of railway transport connectivity with Russia would reduce Latvia’s GDP by 1.7% and increase unemployment by 1.1%.

As it is known, Russia plans to divert its cargoes from Latvia to its own ports.

President of Baltic Association – Transport and Logistics, Inga Antane emphasized that unlike Lithuania and Estonia, there are three large ports in Latvia, and all three of them cannot be ignored. This is because they have a direct influence on all sectors of Latvia’s national economy. She added that it is vital to establish a clear and unified tariff for all three ports to have an effect on Latvia’s competitiveness in the world, not continue mutual competition among those ports in Latvia.

Lithuania and Belarus have successfully achieved growth for their ports. Latvia, on the other hand, has difficulties with coming up with a single development strategy for its ports to enhance Latvia’s attractiveness on a global scale. Instead, Latvian ports merely compete with one another.

«Latvia does not have one port. Major investments have been put into Ventpils and Liepaja ports. Cargo volumes continue to decline. Even if everything is alright in Riga, it does not mean the national economy does not suffer,» – notes Inga Antane.

Sandra Sondore, advisor to Latvia’s Foreign Affairs Minister, also noted that talks about a common strategy are especially important in the time when the 16+1 summit is drawing closer and closer. The summit is not only one of the biggest breakthroughs for Latvia’s economy, but also one of our country’s biggest hopes.

«And now when China and Russia both have to choose about investments in the New Silk Road and where these investments will go, which railway routes will carry cargoes and which transit corridors will be used for cargoes to and from Europe, you have to agree – it is a golden opportunity. The road could end in Klaipeda, Tallinn, Poland or Germany. There will be a big fight for the destination. […] I’m sorry, but everything will be decided by our ability to react to this situation,» – Sondore said.

Antane added: «This is why an open letter has been written – representatives of the industry – us, the ones who handle cargoes and who should be prepared – are kept in the dark. And it is pathetic».

BNN had previously reported that the current situation in Latvia’s transit industry is dramatic, especially considering that this industry is the second largest in the country and earns the economy a billion euros. Officials claim something is being done, that tariffs are being prepared. But no one has told us that anyone intends to create a single offer for all and provide a more competitive tariff.

«We need a new LDz infrastructure development plan, but there is no document that would help us understand what is important and how we should develop further. We need a single offer to be compiled before the Chinese summit, which will be taking place from 4th to 7th November. During this summit, Latvia will be visited by the prime minister of the world’s largest economy. It is now the second half of September. I have yet to see any offers be put up for review. It is impossible to come up with such an offer without the involvement of businessmen and stevedores. Even if there is such an offer, we have yet to see and discuss it. November is the last chance we will have to present it,» – Antane said in an interview to Rīta panorama programme.


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