Latviski English По-русски
Friday 18.08.2017 | Name days: Liene, Helēna, Elena, Ellena, Liena

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

Latvia’s export growth was moderately rapid in the first six months of 2017

Compared with the same period of 2016, Latvia experienced a moderately rapid export growth in the first six months of 2017, according to data published by Eurostat on Thursday, 17 August.

Latvia’s annual inflation in July was one of the highest in Europe

Inflation indexes in Latvia and the UK both reached 2.6% in July, which is one of the highest indexes in the European Union, according to data published by Eurostat on Thursday, 17 August.

Kirsis withdraws his candidacy in favour of Aseradens

Riga City Council member Vilnis Kirsis has decided to withdraw his candidacy from the race to become chairman of Unity in favour of a different candidate – Economy Minister Arvils Aseradens.

Rinkevics expresses Latvia’s interest in maintaining political consultations with Palestine

On Thursday, 17 August, Latvia’s Foreign Affairs Minister Edgars Rinkevics met with the leader of Palestine’s diplomatic mission in Latvia, ambassador Taissir Al Adjouri, to discuss mutual relations between Latvia and Palestine and the peace process in the Middle East.

Putin grins to the world’s seven billionth baby, Lithuania wary of border incidents

Russian President Vladimir Putin paid a visit this Wednesday to Kaliningrad, the westernmost point of Russia, but the reports about his trip in the Russian enclave and over the border in Lithuania were strikingly different.

Survey: red considered the safest colour for a car

Most Latvian drivers consider red to be the safest colour for a car. The most popular, however, is black, according to results of a survey by Virši-A fuel trader.

airBaltic’s number of carried passengers reaches a record in second consecutive month

Latvian airBaltic airline carried 393,312 passengers in July 2017, which is 21% more than the same period last year. The number of passengers carried by airBaltic remains the highest it has ever been in the airline’s history, BNN was informed by the company.

Brivais vilnis: nearly all fish processing companies are experiencing losses

Currently nearly all fish processing companies in Latvia are experiencing major or minor losses, says Brivais vilnis chairman Arnols Babris.

American helicopters to perform low-altitude flights within Latvia’s airspace

U.S. Air Force Brigade’s Task Force Phoenix helicopters, which are stationed in Latvia as part of Atlantic Resolve operation, will be performing low-altitude flights from 16:00 to 18:00 from Lielvarde to Dobele on Friday, 18 August.

Healthcare Ministry’s state secretary Karlis Ketners may be replaced

Latvian Healthcare Ministry may replace its state secretary Karlis Ketners. It is possible he will be transferred to work at Finance Ministry, as reported by LTV.

Suspects in Europe's insecticide egg scandal before Dutch court

In the Netherlands, two men have been in court in relation to the scandal of eggs containing banned insecticide that has caused an EU-wide health scare and cost millions of euros of damages.

Indian national with fake documents apprehended on Latvian border

An Indian citizen travelling from Moscow on a bus was caught at Terehovo border control point in Latvia for presenting officers a fake EU family member’s resident card. No criminal process was launched. The person returned to the country he was travelling from.

Latvijas dzelzceļš will not have to pay dividends from last year’s profits

The government decided on Wednesday, 16 August, that Latvijas dzelzceļš will not have to pay dividends from last year’s profits, which were EUR 880,998.

Latvian citizenship provided to 103 people

The Cabinet of Ministers has issued an order to provide Latvian citizenship to 103 people through naturalization.

Estonian Inbank's profits reach EUR 5.7 million in six months

Estonian financial services' provided Inbank made a profit of 5.7 million euros in the first half of 2017, which is a 429.4% increase compared to the respective period in 2016.

Agriculture Ministry invites residents to sign up for measures to support fisheries

From 21 August onward, Rural Support Service plans to start accepting applications for projects to receive support from European Maritime and Fisheries Fund’s action plan for development of fisheries in 2014-2020 as part of projects Innovation, Productive Investments in Aquaculture and Fishing and Aquaculture project processing.

Estonia seeks to improve reputation of state as employer

As the Estonian Ministry of Finance wishes to boost the reputation and brand of the Baltic country's public sector, it has announced a procurement tender aimed at preparing an action plan for reaching these goals.

Warning: there may be short-term problems with Swedbank internet banking functionality

Because of Swedbank’s planned IT modernization work scheduled for the night to Thursday, 17 August, there may be short term problems with payment card and internet banking functionality, the bank warns.

Aseradens: neither Usakovs nor Lembergs should be allowed to become prime minister

If he became chairman of Unity, Economy Minister Arvils Aseradens would mobilize democratic forces to prevent the possibility of either Aivars Lembergs or Nils Usakovs becoming prime ministers, Aseradens said in an interview to 900 seconds programme of LNT.

Caksa believes increasing wages for doctors would improve politicians’ credibility

The planned wage increase in healthcare could be the first step towards improving politicians’ credibility, says Healthcare Minister Anda Caksa.

Bill Gates donates USD 4.6 billion, reduces shares in Microsoft

The co-founder of the U.S. computer software firm Microsoft, Bill Gates, has allocated to charity 4.6 billion U.S. dollars (3.9 billion euros), which is the philanthropist's highest donation since the year 2000.

LOSP proposes using electronic packing slip system to reduce fraud

An electronic packing slip system for goods would be invaluable for agricultural goods, because it would help push out and reduce VAT fraud, says Latvian Agricultural Organisation Cooperation Council.

Latvia and Russia agree on exchange of additional 3,000 universal permits for cargoes

Latvia and Russia will exchange 7,000 universal permits for international cargo transports in 2017. This will be the largest universal permit volume in the past 15 years, as reported by Road Directorate.

Sierra Leone hit by tragic mudslide

A tragic mudslide has taken place in Sierra Leone, where flooding in the capital Freetown caused a mudslide, in which nearly 400 people have been have died.

Talks with potential KVV Liepājas metalurgs buyers to conclude in August

Talks with potential buyers of the insolvent KVV Liepājas metalurgs will conclude at the end of August, says representative of the company’s insolvency administrator Dzintars Hmielevskis.

Most read

Most commented