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Wednesday 18.07.2018 | Name days: Rozālija, Roze
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Antāne: Saeima’s National Economy Committee has heard the transit industry’s cry

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUInga Antāne, president of Baltic Association – Transport and Logistics, is satisfied with the decision that was made at the recent meeting of Saeima’s Economic, Agricultural, Environmental and Regional Policy Committee, asking the Transport Ministry to develop and present a sustainable development strategy for the industry and putting an emphasis on raising the competitiveness of railway tariffs.

«Transport Ministry’s and Latvijas Dzelzceļš’s act that everything is fine in the transit industry has become very dangerous for Latvia’s national economy. An analysis of statistical indexes for the past three years, the volume of cargoes handled by Latvian ports has been declining sharply. On top of that, there are no signs that would suggest the situation may improve in the near future,» notes BATL president.

Continuing, she adds: «To avert a crisis in the transit industry, Transport Ministry and the government should act now and make decisions that would improve the industry’s competitiveness, otherwise consequences caused by a crisis would have a negative impact on the national economy as a whole, as well as budget revenue and residents’ welfare. The meeting of the Saeima committee proves that the industry’s cry has finally been heard.»

BATL notes that the size of the fee for railway infrastructure use has earned a great degree of criticism. This is because the fee forms 70-75% of the end price, limiting carriers’ options to offer clients competitive prices. A country’s transit corridor’s efficiency depends on the country’s long-term policy. In its current form, it is hard to call it successful, because there is a lack of a unified policy that would fit the real situation.

The association also presented the Saeima committee with its proposed action plan to help raising the industry’s competitiveness.

BATL has also asked the committee to consider the actual situation in the industry, not the volatile «relatively small cargo volume increase». If the government does not make important decisions and start acting fast, it is likely it will be necessary to reconsider budget expectations and consider new social support programmes for people working in the industry.

«It is foolish to think that a worsened situation in the industry will not create serious problems for Latvia’s economy. Latvia is a railway superpower – we are a leader in Europe when it comes to railway length per capita. For Latvijas Dzelzceļš to afford such an infrastructure, it is necessary to carry 60 million tonnes of cargoes every year. According to our estimates, we are already 15 -25 million tonnes short. We also expect this gap to grow even more in the coming years,» says Antāne.

BATL president also notes that «this is why the government should consider coming up with more competitive tariffs and analyse if different mega-investment projects, such as the electrification project, leave an impact on tariffs. EC report on tariff competitiveness released several years ago pointed to problems with Latvia’s tariffs.»

BATL had previously reported submitting its action plan to the prime minister, transport minister, economy minister, finance minister and the council of Latvijas dzelzceļš earlier in September. This was done because the talks with Transport Ministry had reached a dead end. The association, having assessed the situation on the market and the region, cannot agree with the ministry’s opinion that the situation is stable and that there is no need to perform any additional steps to save it.

«For years now Transport Ministry continues acting unknowing of the problems present in the industry and become involved in political and inter-governmental activities, as it is done in neighbouring countries. Incompetent and ruinous decisions, formal responses, lack of communication with the industry has led to a situation when Latvia’s second largest industry, which contributes a considerable amount to the GDP and employs tens of thousands of people, is on a brink of a crisis,» BATL previously said.

BATL also allows that documents prepared on a government level were prepared chaotically and based on outdated and far too optimistic analysis of the situation in the industry. On top of that, the industry is governed by unfair competition conditions for different ports, and there is a lack of political desire to sort the industry and turn down, at least temporarily, different risky and unreasonable investment projects. It is also necessary to improve participation of government and high-rank officials in the attraction of new strategic partners, not merely take part in different ‘red ribbon’ events.

Ref: 225.109.109.2441


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