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Wednesday 22.11.2017 | Name days: Aldis, Alfons, Aldris

Sondore-Kukule: good management is a must for Latvian port competitiveness

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUInterests of Latvian sea ports need to be fought for – their integration in large transit corridors, attraction of high added value cargo and making them as attractive as possible to investors. It is especially important in the context of the current foreign policy. However, we can only successfully address these things when we know we have everything carefully sorted out back home. This is why there is still a lot of homework for us to complete, said Economy Ministry’s representative at Ventspils Freeport Sandra Sondora-Kukule in her interview to BNN.

She adds that a big discussion with the ministry about specific directions and priorities is still ahead. Nevertheless, there are multiple points on which there already is a large degree of consensus.

‘Out of four recommendation blocs provided by experts from the World Bank, half are proposed for the improvement of Latvian ports in regard to measures of better management. In order to create an attractive business environment, it is important to provide equal rights and equal game rules for all entrepreneurs. This also applies to the allocation of land and signing of lease,’ – says the politician.

‘We need to make sure there is a clear and strict investment evaluation method in place, especially for signed rent contracts and completion of obligations taken by entrepreneurs. I believe it is important to re-evaluate and correct criteria and results for the general evaluation of port competitiveness. The volume of handled cargo cannot serve as the main criterion!’ – says Sondore-Kukule.

In regard to the work performed by the Board, the long-term advisor to Vaira Vike-Freiberga and Valdis Zatlers says that the matter regarding the strengthening of information openness and clarification of the decision-making process remains very important. ‘Experts of the World Bank also advise increasing internal monitoring and control, as well as perform an independent financial and economic audit. This would also allow for an objective evaluation of port management cost reduction possibilities,’ – she adds.

‘I support the opinion that it is necessary to introduce criteria in relation to port management members’ selection process. In any case, Reform Party has been thoroughly discussion this subject. In 2012, the party made its decision on the sort of criteria it would like to see set for candidates who are proposed to work in port management Boards. These include: higher education management disciplines, law, financial management, economics, as well as professional competence and experience required: At least 5 years of experience in jurisprudence, economics, business or organization-related fields,’ – explained Sondore-Kukule.

When asked if these plans can be implemented without the involvement of other political powers and interests of those close to political powers, Sondore-Kukule replied that it is too soon to consider such possibilities.

She mentions the same about possible opposition against the proposed initiatives. She admits – she has not seen any particular negative response in statements of her political colleagues or the media.

‘What I have heard so far is a rather clear opinion on my professional skills and qualifications. What I would like to add is that I have gained work experience in state management, law and business areas.’

It should be added that Sondore-Kukule supervised more than 60 possible State Presidential veto processes in regard to laws approved by the Saeima. ‘I have written 49 articles for heads of the state in regard to submitting bills for secondary review in the parliament. Half of these cases applied to laws that impacted important sectors of state economy, tax policy, entrepreneurship, investment environment and port development and activities matters (in 2003, 2010 and 2011). In addition to that, in the past two years I have watched activities of Latvian sea ports, their management and competitiveness risks.’

In 2012, she and her colleagues in Reform Party made the first steps to improve port management – the government agreed to approve new regulations to ensure better transparency of port activities. The government also agreed to prohibit ports to sign so-called confidentiality agreements. It was also decided that state representatives in port management Boards will be required to coordinate their activities in order to make sure national interests are represented by all state representatives equally.

‘Thanks to RP’s initiative, Latvia now has a good general view on the situation at Latvian ports, which was provided by independent experts of the World Bank. This report provides authorities with all necessary information and recommendations on how it would be best to improve port activities in Latvia,’ – says Sondore-Kukule.

She adds that Diena portal and newspaper had noted in its article ‘Truth and lies about ports’ (2012) that large ports pay next to nothing to the state even though they use state owned transit and logistical infrastructure, real estate properties and access to the surrounding water area.

‘All fees collected by ports remain in their pockets. This is why I am especially glad that Reform Party has managed to change this system during the budget talks – from now one large ports are obligated to pay rent for the use of state infrastructure,’ – says the newly-elected Ventspils Freeport Board member.

When asked about her opinion on the sector in general, Sondore-Kukule noted that management should play a big role in improving port activities. The same applies to equal business conditions and requirements for all investors and a clear policy for investment attraction and use.

‘Why? So that our ports would have large logistical players from the west. Without them, we cannot hope to ship cargo to the west,’ – says the politician.

‘If Latvian ports with to survive in conditions of high competitiveness, they need to offer a kind of service and involvement model that cannot be realized by our neighbours and competitors in Russia.’

Sondore-Kukule notes that it is equally important to fight for competitiveness of Latvian ports on a global scale. It is important to regularly hold different events to popularize Latvia and its transit sector – discussions, seminars, foreign visits and diplomatic meetings. However, in order to do all this, officials have to ‘do their homework’, because foreign investors are aware of a great many problems and ‘traditions’ present in Latvian port management model.

‘In order to overcome all challenges ahead of Latvia’s transit sector without the role traditionally played by Transport Ministry, I see some good opportunities to defend economic interests through cooperation between Economy Ministry and Foreign ministry,’ – she concludes.


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