During the first meeting of Transport Ministry’s work group the decision was made to develop offers for a new tariff system for the country’s railway infrastructure. The current tariffs are considered non-competitive and detrimental to the industry’s development.
Latvia has the highest railway tariffs in the European Union – EUR 9.97 per kilometer (EUR 7.14 in Lithuania and EUR 4.63 in Estonia). Because of this, Latvia loses millions worth of cargoes and the potential to develop Latvia’s national economy.
Baltic Association – Transport and Logistics has called for providing fair competition among Latvia’s largest ports and equalizing tariffs of Riga, Liepaja and Ventspils ports. In particular, it has been requested to develop a flexible and economically justified policy for railway tariffs, one that would contribute to equal development of the country’s largest ports and better competition with other Baltic Ports.
«The current tariff calculation model is outdated. It has been around for nearly ten years and is no longer in touch with the modern economic situation. Latvia’s ports are in dire need of justified, flexible and competitive tariff policy. There is no time to wait and continue working with the outdated system. I believe by working together in the work group it will be possible to create a flexible and economically viable tariff system that would contribute to the development of ports and their international competitiveness. Ports should compete with foreign ports, not each other,» – says President of BATL Inga Antane.
BATL also notes that high tariffs are the reason why it is much more expensive to haul cargoes to Ventspils, in comparison with Riga. Cargo transport costs to Ventspils have risen considerably since 2006, when the current tariff model was first introduced. Since then cargo transports have not been as competitive in Ventspils, while Riga Freeport demonstrates overall stability. Over the course of the past nine months of 2015, cargo turnover has reduced by 14% in Ventspils and by a mere 0.1% in Riga.
Inefficient and unfair tariff policy is one of the key factors that prevent companies working at Ventspils port from attracting new clients, new cargoes and diversify their cargo segment.
BATL adds that unfair railway tariffs are the main factor that prevents successful cooperation with countries like Belarus, Kazakhstan and others, which prefer Lithuania and Estonia as their main transit hubs.
«High tariffs considerably reduce companies’ competitiveness. As a result, not only does a specific port lose potential revenue but so does Latvia’s economy as a whole. This is why it’s necessary to create a unified and balanced development policy and create equal conditions for Latvia’s largest ports, like Lithuania does,» – notes Antane.