Latviski English По-русски
Friday 19.01.2018 | Name days: Alnis, Andulis

Merks Board Chairman: construction the last to exit crisis

(+2 rating, 2 votes)

Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, Ivars Geidāns, Merks

Ivars Geidāns

SIA Merks Board Chairman Ivars Geidāns forecasts 2011 will be one of the toughest for builders, thus he is glad the company did not win the tender on the Castle of Light (Latvian National Library) construction, similarly Geidans does not believe apartment prices are ever to return to the pre-crisis period.

When do your owners forecast construction sector revival in Latvia?

2011 will be one of the toughest. Construction is the last to exit the crisis, as it depends in the processes on the national economy. The construction sector is to recover only when the national economy reaches a certain developmental level, businessmen are connived about tax policy lasting more than a year, financial resources are accumulated and there is a demand for goods and services, propelling private investors interest about Latvia. The following two years will not show growth. Efficient and sensible EU funds investment in the infrastructure, as well as state and municipal facilities will be the key of ensuring future activities of the sector. Consequently, these authorities skills of organizing tenders and managing projects should be improved.

Did you re-evaluate the projects you miscalculated in «the fat years»?

The crisis did not hit us as hard as the whole sector in general, because we took the right decisions very timely – we optimized costs not corresponding to the crisis period. Merks had prepared projects on about 2.5 thousand apartments construction in 2007 and 2008, in accordance with the market characteristics of that time. Currently we are going through them again in line with the current demands and purchasing power. We started to feel the consequences of the crisis in the second half of 2008. However, at the same time, when the construction market halted in late 2008, we concluded two Skanstes virsotnes buildings and we are about to finish the third one this year. To contradict the view that no one is to buy these apartments, I assure we see that apartments in favourable locations and for a reasonable price are always of great interest. Speaking about the company in general, we had a wide portfolio of concluded agreements, ensuring to maintain 40 000 million lats turnover in 2008 and 2009.

Do you regret loosing the public tender on the Castle of Light construction?

On looking back at the development of this project, satisfaction replaces regret. It turns out we were right. We had set a more precise and more beneficial construction price, compared to the competitors’ one. Those who now should regret something are officials and public authorities who opted for building the national library for an unreasonably high price.

What is the actual price of apartments in the so called sleeping districts secondary market?

Demand determines the secondary market prices. Along with a growing demand, prices surge as well, but they are never to return to the pre-crisis level.

What should be done regarding the unsuccessful projects low quality houses that have not been bought – tearing down, waiting or reconstructing?

Time will show. Currently banks have taken over most of these projects. They will sell them for a beneficial price some day. It is clear the price will ensure maximum recovery of the invested funds. Thus one should not hope for new apartments for low prices, the same applies to the so called «unsuccessful» projects. Most likely they will not be sold cheaper than the funds invested. Moreover, it is not profitable to reconstruct and renovate them at the moment. Consequently, some projects are doomed only to serve as an evidence for «the fat years» and the crisis.

Do you hire construction workers only from Latvia or from Estonia as well? What is your attitude to workforce inflow in general?

We collaborate by attracting highly professional managers and engineers with specific skills from all over Europe, because we care for these skills, not the place these persons come from. As for today, we are not hiring foreign builders.

If the Latvian economy start growing at a more rapid pace and we want to develop to recover from the crisis and live better, the whole society, not just builders, will be forced to face workforce inflow issues, because we lack qualified experts already. Moreover, this problem is arising not only in Latvia.

Are you satisfied with 4.55 million lats profit in 2009, when the crisis was still ongoing?

The results of 2009 show the objectives set in the beginning of the year – to maintain the production output in the key sectors of construction and real estate projects development, for example, Merks built apartments sale – were reached. Merks turnover even increased a little in 2009, compared to the previous year, due to agreements concluded before and good results in apartments sale. I am glad about that. We will inform the Tallinn Stock Exchange about the 2010 results in mid-March.

Which 2009/2010 projects you are proud of?

We concluded many projects in Riga and Latvia in general in 2010, the reviews of customers and local municipalities officials were positive. I am proud of both the projects and Merks employees who ran to construction work. DnB NORD Bank’s new office building with joint features of sophisticated architecture and energy saving is one of the most technologically advanced building in Riga. I would also like to single out Tallink Hotel Riga on Elizabete Street, which maintains the historical facade, also Strenči Mental hospital construction and renovation, as well as water and sewage treatment plants in Jaunpiebalga and Aloja, built with the EU co-financing.

Leave a reply

  1. One says:

    Hope this sector also learns something from the crisis.

    Thumb up 0 Thumb down 0

  2. bogaloek says:


    Thumb up 0 Thumb down 0

  3. hidudekdu says:


    Thumb up 0 Thumb down 0

Economist: the most important reform has to happen in people’s heads

«Of all the clever things taught to us in school about psychology, one thing that has stuck with me over the years is the idea of internal/external control point. There are people who believe they make their own fate. There are also people who believe our fate depends on external powers. I suspect people in Latvia explain successes and failures with external factors much more than people in Switzerland or any other country that has enjoyed its freedom longer than Latvia,» comments Luminor Bank’s economist Pēteris Strautiņš.

Minister promises bigger wages for working people and support for country’s industry

«Latvian Economy Ministry’s priorities for 2018 include increasing wages for working people and providing support to the country’s industry. For Latvia’s centenary year, every resident should have the right to experience the increase of the personal and state welfare,» promises Economy Minister Arvils Ašeradens.

Latvenergo: electricity price has declined 30% in the past three years

Average electricity price in Latvia has declined in recent years. The average price of electricity has declined by 30% at Nord Pool exchange between 2014 and 2017, allowing end user costs to decline, says Latvenergo.

Alcohol sellers in Estonia to be checked by little «police»

To find shop assistants illegally selling alcohol or tobacco to minors, Estonian police introduces the method of sending minors as police aides to retail shops to try to purchase the products banned to them.

EY study: cyber security has become a priority to banks this year

Over the course of the year, priorities of banks around the world have switched from reputation and risk management to data security matters, as concluded in the latest EY Global Banking Outlook 2018.

Political association: UGF and Harmony are covering up state capture

«Parliamentary investigation of Oligarchs case has shown what is what in the Saeima of the Republic of Latvia. Green farmers are in full harmony, covering up Aivars Lembergs and the fact of state capture. They and Inguna Sudraba have made the parliamentary investigation into a farce. Unfortunately, the power in those people’s hands is no farce – rather misfortune for all of Latvia. I hope citizens will take all that into account when they go voting,» says leader of Kustība Par! Daniels Pavļuts.

Tallinn-Helsinki tunnel plan lacks ambition, says «Angry Birds» game maker

While Finland and Estonia work on plans of an under-sea tunnel from Tallinn to Helsinki, the construction of which could start in the 2030s, a Finnish businessman, previously involved in development of Angy Birds video game, has presented plans to finish the massive construction project in 2024 already.

Experts: healthcare financing law will deny healthcare to the least protected

In a discussion regarding healthcare, experts said that Latvian President Raimonds Vējoņis’ proposed Healthcare Financing Law is economically unjustified and ineffective. The document lacks principles of a socially responsible state, because healthcare is becoming less accessible, which will likely worsen public health indexes, says Kustība Par! political party.

Branded «aggressor state», Russia says Ukraine buries Minsk peace agreements

As the Donbas War continues, the parliament of Ukraine has passed the so-called Donbas reintegration bill after three days of debates defining territories controlled by pro-Russian separatists in the east of the country as temporarily occupied by Russia.

Weather to remain winter-like in Latvia during the weekend and next week

On Friday and Saturday, no major increase of snow is expected. Air temperature will increase slightly, but colder masses of air will slow into the country on Sunday, as reported by Latvian State Environment, Geology and Meteorology Centre.

Winter storm in Netherlands and Germany turns tragic

A powerful winter storm in western and central Europe has claimed the lives of eight people.

Lithuanian bishops: skipping fasting on February 16 this year is not a sin

In an unprecedented move, the Conference of Lithuanian Bishops, the governing body of the Lithuanian Catholic Church, said that meat dishes okay for the people of faith on February 16, which marks the 100-year anniversary of Lithuania's statehood and the Lent Friday, which is traditionally a day of fasting for religious Catholic people.

Coincidence? Votes from Harmony and UGF ensure Sudraba remains the head of Oligarchs case committee

On Thursday, 18 January, the majority of Saeima members voted against the proposal to dismiss Inguna Sudraba from the post of the head of parliamentary investigative committee in charge of the review of the infamous Oligarchs case.

Kaljulaid criticised over involvement of acclaimed, but unrestrained director in centennial reception

As Estonia readies for the presidential reception to honour the 100th anniversary of Estonia, its President Kersti Kaljulaid is being criticised in an open letter for trusting Tallinn’s NO99 theatre, whose director physically assaulted a female colleague.

22.1% of Latvia’s residents subjected to risk of poverty

In 2017, 425 thousand persons or 22.1 % of Latvia population were at risk of poverty in 2016 – 0.3 percentage points less than in 2015. Equivalent income of this part of the population were below 330 euros monthly.

LAAC: Latvia’s milk market can be sorted out by joining forces in exports

Latvian Association of Agricultural Cooperatives (LAAC) has received support and praise for the public discussion regarding rapid milk procurement price changes, which is something that has recently affected the majority of agricultural cooperatives. This has helped cooperatives band together in order to sort out the milk market. This idea came from the example set by grain producer cooperatives, which did the same thing fifteen years ago, as reported by the association’s representatives.

Forevers announces its decision to exit from Latvian Federation of Food Companies

Forevers meat processing company has decided to exit from Latvian Federation of Food Companies (LFFC). The contract between two parties will be terminated in January.

Saeima’s Oligarchs case investigative committee hastily approves final report

In spite of objections, grammatical errors, criticisms about lacking effort, as well as Inguna Sudraba’s unfit status to lead the committee, members decided to move the meeting from 11:00 to 08:00 and approve the final report in a rushed vote.

Removal of 1 and 2 euro cent coins from circulation suggested by Bank of Estonia

Estonian central bank is willing to follow the eurozone trend of limiting the circulation of euro 1-cent and 2-cent coins and in time to remove them entirely from circulation in the Baltic country. attacks on e-health system and LETA were likely ordered

Attacks on e-health system and LETA agency were likely ordered, said deputy manager Varis Teivāns in an interview to Rīta Panorāma programme of LTV.

As Catalan parliament reconvenes, it elects pro-independence speaker

The Catalan regional parliament has in its first sitting since its ousting and snap December election elected a separatist-minded politician as its Chairman, which indicates that the attempts to break the region away from Spain would continue.

Latvia’s National Armed forces receive new Harris tactical radio equipment

In 2017, Latvia received tactical military radios worth USD 10.5 million from American Harris Corporation. Procurement of radio equipment will further improve command function and help develop a lasting communication system with other NATO member states, as reported by Latvian Defence Ministry.

MEP: Europe continues strengthening its energy independence

«The European Parliament has voiced strong support towards Europe’s energy independence and moving its energy policy away from Russia’s monopoly by investing in energy efficiency and renewable energy resources,» said MEP Krišjānis Kariņš after the vote on Clean Energy Act’s first reading in Strasbourg.

Apple expected to pay additional 38 billion USD in taxes for money kept abroad

Motivated by the U.S. tax reform, Apple will pay about 38 billion U.S. dollars (31 billion euros) in tax on the roughly 250 billion dollars (204 billion euros) the computer technology firm keeps outside of its country of origin as it plans to focus more on its contribution to the American economy.

Latvian police commenced three criminal processes for contraband of drugs this year

In the first two weeks of 2018, State Revenue Service’s Customs Police commenced three criminal processes in regards to illegal drugs contraband in postal packages from Lithuania to Latvia.

Most read

Most commented

Would you be ready to boycott something in your life?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: