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So-called port fee planned to be cancelled

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOn Tuesday, 13 September, the government will view Transport Ministry’s amendments for the Law on Ports. These amendments provide for the cancellation of the so-called port fees.

Transport Ministry explains that, in accordance with the Law on Ports, Riga Freeport, Ventspils Freeport and Liepaja Special Economic Zone charge state budget fees for use of the country’s strategic infrastructure.

Payments to the state budget are added and used to cover expenses associated with public port infrastructure. Port management institutions have the right to request budget grants worth 90% of port payments to the state budget. The remaining 10% are diverted to the maintenance of the country’s main national roads.

The draft provides for the cancellation of port administrations to collect fees for the use of state strategic infrastructure because of the current situation in which port administrations receive back 90% of paid fees and it creates a bureaucratically and administratively ineffective mechanism that requires additional time and resources to process. In addition, sometimes port administrations are forced to use loan services to perform payments, finances become frozen and port administrations do not receive state budget grants. Port administrations lose an average of EUR 532,080 annually because of the administrative burden and inefficient bureaucratic mechanism. It is possible to use this money to maintain ship routes and outlying waters, which is one of the most significant sections for port infrastructure maintenance costs.

According to TM’s estimates, by approving relevant amendments, the state budget revenue would lose EUR 5,320,801 annually.

Economy Ministry objects to Transport Ministry’s initiative. In 2013, Daniels Pavluts, then the Economy Minister, produced a draft to have port administrations perform payments to the state budget.

Economy Ministry emphasizes the importance of proper maintenance of national roads and their connectivity with port infrastructure.

«Considering that the deficit of repair work expenses has reached EUR 4.5 billion, amendments to the Law on Ports would not affect the road repair rates. As for the benefit for port infrastructure, amendments would ensure finances are no longer pulled from turnover and port would be able to plan investment amounts more accurately,» – Transport Ministry notes.

Amendments to the Law on Ports first came into force in 2014. Latvian ports perform payments to the state budget worth 10% from tonnage, canal, small vessels, anchor and cargo fees.

Economy Ministry – the initiator of the port fees idea – had intended to divert those finances to road repairs. However, the government then approved a draft that stated how port fees would be diverted to state road management, maintenance and restoration, as well as maintenance of port waters. In addition, the draft stated that roads would be provided with 10% of the administered amount of funding and port would be provided with 90%.

Ref: 102.109.109.5812


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