bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 25.06.2017 | Name days: Maiga, Milija
LatviaLatvia

Latvijas Dzelzceļš buys plant the business of which has not been successful in the past

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe head of Latvijas Dzelzceļš has received the government’s approval to expand its business presence. LDz’s subsidiary LDz Rolling Stock Service plans to become the sole owner of Rīgas vagonbūves uzņēmums Baltija and commence manufacture of freight wagons in Daugavpils. The problem, unfortunately, is that the private investor has not been successful with the realization of this plan.

On top of that, there is no demand for freight wagons at the moment.

Four years ago, Ugis Magonis, then the president of Latvijas Dzelzceļš, said that it is planned to invest several million lats into LDz’s subsidiary in Daugavpils in order to establish a wagon manufacturing plant. He mentioned that the plant would be able to produce 1,000 wagons a year and employ 100 people, as reported by De Facto programme of LTV.

Nothing has come out of this initiative yet. RVU Baltija has manufactured a total of two freight half-wagons. Their festive presentation took place one and a half years ago. However, those wagons have yet to be certified, so there is no point in manufacturing more of them.

RVU Baltija currently has two owners. 25% belong to LDz RSS and 75% – to UK citizen Georgiy Chesnokov. Last year, Chesnokov decided to leave this business and extended an offer to LDz Rolling Stock Service – to either divide its assets or buy all of the company’s shares. LDz put some thought into the offer and decided it would be cheaper to take over the company.

In order to acquire influence over RVU Baltija, it was necessary for LDz to get permission from the government. Transport Ministry had submitted the draft of the order at the end of last year. The coordination process was ultimately delayed, but now Transport Minister Uldis Augulis is committed to achieve progress in this matter. It ended up on the government’s table on Tuesday. Unity’s ministers tried to oppose it.

Education and Science Minister Karlis Sadusrkis doubted «as to whether or not the government should take over non-functioning companies just in case something needs to be manufactured». Economy Minister Arvils Aseradents noted that this deal would not affect strategic infrastructure. With that, there should be clear factors as to why the government would go through with this deal. Otherwise, «if we start acting in such a way, we will have enough demand to do the same thing in the future,» – said Aseradens.

Augulis commented that the opinions coming from Unity seemed odd, since the coalition had previously put off the review of the matter for a week, and that Transport Ministry had not received any questions regarding any aspects of the matter in that time.

Ministers of UGF, the Prime Minister and the National Alliance took Augulis’ side on the matter. With votes divided into 7:4, the government gave LDz permission to acquire RVU Baltija. «The question is if nothing is done there in a year, we will have made a horrible mistake,» – Maris Kucinskis added.

Why did a company with premises, technical support and workers provided by LDz Rolling Stock Service and support promised by then the Prime Minister Valdis Dombrovskis failed to restore freight wagon manufacturing in Latvia? Guntis Innuss, the sole board member of RVU Baltija, has his own explanation for this: «We had submitted a request to receive EU funding when we started this project. The Prime Minister had also promised support here in Daugavpils. Unfortunately, the project was declined and we received no support and no financing was provided to us. The private investor, who was one of the founders of RVU Baltija, decided to leave the market entirely. And so the two wagons we have manufactured remain uncertified to this day.»

Innuss says Latvian Agency for Investments and Development had believed more in Russian Uralvagonzavod’s plan to establish a manufacturing plant in Jelgava at the time. That project has not gone anywhere either.

Private co-owner Chesnokov’s representative and former board member of RVU Baltija Dmitro Vakhnin has confirmed this version only partially: «We had hoped for the LIAA programme, but no one had ever believed in it 100%. Our plan was to focus our business project’s first stage on investors’ own resources.»

«At the time, LIAA told us that our request was not supported. That was spring 2014. So we decided to review our plans. Corrections were made not because of LIAA’s refusal, but because of the market conjuncture. The market had radically changed in 2013 and 2014,» – says Chesnokov’s representative Vahnin. He agreed with opinions of other representatives of the industry – while there was a deficit of freight wagons several years ago, there are too many of them now.

This makes one skeptically view Transport Ministry’s annotation in regards to RVU Baltija’s future directions, including the plans for the needs of LDz. Anrijs Matiss, former Transport Minister of Latvia, is among the sceptics. «Now that the market is overflowing with empty freight wagons, there is no problem with their availability. In addition, LDz is not exactly in a financially successful state at the moment. I think such a step is completely pointless.»

Transport Minister Augulis emphasizes that the main objective of RVU Baltija will be to provide transport of Abrams tanks: «This company will work to manufacture NATO platforms for the alliance’s needs, so that NATO forces can travel safely using platforms meant for heavy vehicle transports. LDz does not have those at the moment».

Ref: 102.109.109.9521


Leave a reply

Real estate purchase «pain threshold» in Latvia – EUR 100,000

In relation to the possibility of purchasing a new home, Latvian residents view EUR 100,000 as the «pain threshold». The critical border for new project apartments is 1,300 EUR/m2. For standard apartments it is 1,000 EUR/m2. For private homes it is 1,600 EUR/m2, according to results of a study by PrivatBank.

Lembergs & Co. gathered to discuss «problems» of the high and mighty

Political businessman Ainars Slesers held a friendly discussion with his associates – Aivars Lembergs, Andris Ameriks, Janis Urbanovics, Janis Duklavs and Valerijs Kargins – at Ridzene Hotel. The group discussed toppling Valdis Dombrovskis’ government, replacement of multiple high-ranking officials and the possible sale of pieces of land within Riga Freeport’s territory, according to transcripts from the conversation published by Ir magazine and provided by anonymous sources.

Lithuania set to limit cash payments to 3,000 euros

The Farmers and Peasants-led Lithuanian Cabinet has approved a draft bill envisioning restrictions on use of cash, limiting the kind of settlements up to 3,000 euro.

Saeima establishes indexation increase for pensioners with high seniority

On Thursday, 22 June, Latvia’s Saeima approved Social and Employment Matters Committee’s prepared amendments to the Pension Law in two readings, ensuring greater pension indexation for multiple pensioner groups next year.

Romanian Parliament ousts Grindeanu government

The Romanian government of Prime Minister Sorin Grindeanu has not survived a no-confidence vote and has fallen after less than six months in power.

Rail Baltica agreement will allow trains to travel at 240 km/h

Saeima of the Republic of Latvia will soon ratify Rail Baltica agreement, which is expected to allow passenger trains to travel at a speed of 240 km/h instead of 120 km/h. Higher travel speed will also ensure cargoes from Tallinn reach Poland within two days.

Mamikins: Latvia is becoming a landfill for rich European countries

A very large fire took place at an illegal landfill in Jurmala this week. According to information from the State Environmental Protection service, the fire had engulfed 23 tonnes of waste, mainly plastic waste, says Latvian MEP Andrejs Mamikins.

Latvian businessmen use e-commerce opportunities for business development

With e-commerce volumes growing around the world, Latvian businessmen use it more and more often for business development, including exports of goods and services. As noted by DPD, the number of packages sent to foreign countries grew 22% last year.

Latvia wishes to change its state president’s election process

Reviewing proposals to change the state president’s election process, Saeima’s Legal Affairs Committee decided to submit proposals developed by the work group to different Saeima factions for review, as BNN was informed by Saeima’s press-service.

Coalition parties close to making final decision with tax reform; no more obstacles

Coalition parties no longer have any more differences of opinions in regards to tax reform principles. Parties are close to making the final decision, said Economy Minister Arvils Aseradens after the meeting with Finance Minister Dana Reizniece-Ozola.

Saeima plans to introduce personalized voter cards

For next year’s Saeima elections, voters who only have an ID card and no valid passport are planned to be provided with personalized voter cards.

Producer price level in industry up 0.4% in Latvia

Compared to April, the level of producer prices in Latvian industry grew by 0.4 % in May 2017. The prices of products sold on the domestic market increased by 0.3 %, whereas the prices of exported products grew by 0.5 %. The prices of products exported to euro area countries grew by 0.8 % and of products exported to non-euro area countries – by 0.4 %.

Opinion: local media in Daugavpils are corrupt

«Now that we constantly face new and more elaborate security risks, concerns tend to increase about the fight for people’s minds in the information space. This is why the bar for professional journalists should be held high. Baltic Centre for Media Excellence plays an important role in all this,» said chairman of Saeima’s Foreign Affairs Committee Ojars Eriks Kalnins after the meeting.

Life in Riga remains more expensive than life in Vilnius and Tallinn

Riga is recognized as 126th most expensive city in the world. Life in the Latvian capital is considerably more expensive than it is in Vilnius or Tallinn, according to a study published by *Mercer Human Resource Consulting.

Most universities in Estonia to cut number of new students this year

Three of the four universities working in Estonia have expressed plans to bring down the number of admissions in the coming academic year.

Foreign investors do not support amendments proposed for Financial Instruments Market

The Foreign Investors Council in Latvia does not support proposals for protection of rights of minority shareholders, which are include and proposed in amendments to the Law on the Financial Instruments Market.

Ligo celebration causes condom sales to go up in Latvia

Nearly 39% Latvian residents plan to spend around 21 to 40 euros on Ligo, according to results of a survey performed by Maxima. 22% of respondents plan to spend around 20 euros on the celebration. 22% of residents plan to spend 41 to 60 euros, and 17% - more than 61 euros.

Latvian government asked to compensate profits lost from rejecting Nord Stream 2

Considering the stance of the Latvian Republic in relation to Nord Stream 2 project, in which the Cabinet of Ministers decided not to permit the participation of Ventspils Freeport, Noord Natie Ventspils Terminal and Baltic Express have decided to ask the government to compensate lost profits. An official request has been submitted to the prime ministers.

Hospital: countryside residents with no easy access to a urologist are at risk

For the third consecutive year urologists from Riga Eastern Clinical University Hospital’s travel to Latvia’s far-away regions to provide men there with free health check-ups and consultations. This year urologists decided to visit Dobele, Cesis, Rezekne and Jekabpils.

Stoltenberg visits Iron Wolf exercises in Lithuania

NATO Secretary General Jens Stoltenberg has visited Lithuania on Tuesday, June 20, to see international military drill Iron Wolf 2017 and has noted that the involved countries are protecting each other.

German Chancellor could support introducing eurozone budget for sensible purposes

Angela Merkel, the Chancellor of Germany, has stated that she could support the introduction of a separate eurozone budget and a position of an eurozone finance minister, in case of right circumstances and sensible aims.

Prosecutor decides to end criminal case against former KNAB officer Juris Jurass

In spite of the decision by Security Police to present charges, the prosecutor responsible for the case has decided to end the criminal process commenced against the now former official of Corruption Prevention and Combating Bureau Juris Jurass for intentional disclosure of official secrets.

Latvia wants to introduce electronic working time tracking in construction

Saeima’s Budget and Finance Commission has expressed unanimous conceptual support for amendments to the Law on Taxes and Duties. These amendments provide for the introduction of electronic working time tracking system in construction, as BNN was informed by Saeima’s press-service.

Alleged bomber shot in Brussels central station

In the central station of Brussels, Belgium, soldiers have shot a man suspected he was to detonate explosives, local authorities have stated. The man was shot and later died after reportedly setting off a small explosion on Tuesday, June 20, and no-one else is believed to have been injured.

Expert: pension capital grows, but the Latvia still has a ways to go

«Latvia’s pension system has been named one of the best in the world multiple times. Pension capital in it has grown rapidly over the years. The volume of savings gathered on the 2nd level pension system by the end of Q1 2017 came close to EUR 3 billion. The volume saved on the 3rd level pension system was close to EUR 4 billion,» explains Nordea Pensions Latvia board member Ilja Arefjevs.

Newest comments