bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 17.11.2018 | Name days: Uga, Hugo, Uģis
LatviaLatvia

Baltic Express: our children will have to pay for Latvia’s railway electrification project

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«Latvia’s railway electrification project will not only fail to provide any tangible economic returns but will also cost so much that our children and their children after them will have to pay for it. Similar to any investment project, those who wish to use it expect also a return of investments. Unfortunately, we can predict that the cost of using Latvia’s railway infrastructure, which is already the highest in Europe, will only grow as a result of this project. Unjustifiably high costs have never benefited competition,» says AS Baltic Express Train Movement Organization Office manager Linards Gulbis.

«Imagine a store in which prices are so high people simply cannot afford any purchases. The store’s management is well-aware there is no room to increase prices even further, but they still want money. Then they adopt a fee for use of doors, a fee to remain in the store, a fee for the use of heat, etc. How many buyers would such a store have?! None! This is the kind of situation Latvia’s railway industry risks falling into,» says Gulbis.

He reminds that the project’ s representatives all claim that by going through with it Latvia demonstrates its presence in the transit business sphere, and that without it Lithuania, Estonia and other competitors will surely win over clients. «Unfortunately, our competitors will only benefit from this project because with electrification of Latvia’s railway infrastructure we can forget about competitive prices. In addition, the continuous cargo decline will only make this project and economic catastrophe for the country,» Gulbis continues.

«The study performed in 2012 made it clear that electrification would be acceptable only if our railway lines are used to transport a constant volume of cargoes. In 2011 and 2012 the volume of cargoes was 60 million tonnes. Last year, however, cargo volume was only 40 million tonnes. This means the main factor for the project’s viability – volume of cargoes enough to sustain costs – is absent. Ideally speaking, it would be best to postpone the project and reassess it. Another study performed in 2011 warned that benefits from the electrification project will be possible only if electric drive is performed along the entire corridor. If carriers are not permitted to provide transport services and use LDz network and diesel power instead of electric power, it is likely investments will not be returned.

Considering that the electrified railway line is planned to be established only as far as Riga, the project is already doomed to fail. It is but one of many factors,» said Gulbis.

As mentioned by authors of the study, one of the most important aspects is the price change of diesel fuel in relation to the price change applied to electricity. «If the rate at which electricity prices increase is higher than that of diesel fuel prices, the project’s financial longevity may be put at risk,» as mentioned in the study.

«Here I would like to mention one of the loudest scandals in recent months – the one associated with mandatory procurement component. In 2016 alone MPC payment reached EUR 237 million! Every single Latvian resident and businessman paid this money through electricity bills. There are justified reasons to believe that households and businesses will have to pay even more for electricity once the railway electrification project is completed. The average electricity price per kWH (EUR 16.2) is already higher than the one in Estonia (EUR 12.4) and Lithuania (EUR 11.7). What kind of improvement of competition will this project bring?» said Gulbis.

«Because the decision regarding railway electrification has no economic need, and is actually a political ambition, none of the aforementioned risks have been taken into account. Moreover – an enormous and unreasonable burden is put on the shoulders of cargo carriers. Only part of the project’s costs will be covered from finances of the European Union. Replacement of diesel trains with electric models is now a ‘voluntary duty’ of active businessmen. Let’s calculate – one Siemens diesel locomotive costs around EUR 5 million. One electric locomotive will cost at least EUR 8 million. Businessmen have to reform their electric locomotive park, a new repair base, train new specialists and sustain two locomotive parks – cargoes will be carried to Riga using electric trains, and using diesel trains from Riga to Ventspils. Only politically motivated experts see economic benefits from the project. It will not benefit Latvian residents at all,» Gulbis concluded.


Leave a reply

PUC commences dispute between AS Gaso and natural gas consumer

On Friday, 16 November, Public Utilities Commission decided to commence a dispute procedure between a natural gas consumer and AS Gaso in regards to natural gas supplies, as confirmed by the commission.

Latvian parties continue informal talks while next prime minister is being picked

While President Raimonds Vējonis is busy picking the next prime minister candidate, politicians of different parties are performing informal consultations. No official consultations are currently planned.

UN's global migration compact stirs up Estonia's calm politics

The Estonian government has taken a long time to reach a unanimous position on the United Nation's Global Compact for Safe, Orderly and Regular Migration. This has been criticised by Estonian President Kersti Kaljulaid, who has to attend a conference in favour of the document in Morocco in December.

Latvian authorities detain CityCommerce Bank co-owner accused of embezzlement

Reinis Tumovs, co-owner of Ukrainian CityCommerce Bank, has been detained in Latvia. He is suspected of embezzling nearly UAH 300 million (EUR 9.5 million), as confirmed by Ukrainian National Police Economy Protection Department on Thursday, 15 November.

Russia ordered to pay damages for Navalny's political arrests by human rights court

Russia has been ordered by the European Court of Human Rights to repay 64 000 euros in damages and costs for politically-motivated arrests of Russian anti-corruption activist Alexei Navalny.

Latvian president to consider Gobzems and Pabriks as perspective prime minister candidates

As parties’ efforts to form a new government continue, Latvia’s President Raimonds Vējonis plans to consider two new prime minister candidates – KPV LV leader Aldis Gobzems and Attīstībai/Par! candidate Artis Pabriks.

EC wants to reduce funding for supplies of fruits, vegetables and milk to schools

European Commission’s proposed regulation on organization of agriculture products market provides for reducing EU funding for the support programme on provision of fruits, vegetables and milk for schools by EUR 29.2 million or the same as United Kingdom’s share.

Genocide verdicts handed to Khmer Rouge leaders in Cambodia

In Cambodia, the two most senior living leaders of the Khmer Rouge Communist regime have been found guilty of their role in the atrocities that resulted in the deaths of at least 1.7 million in Cambodia between 1977 and 1979.

Latvian parties pick candidates to work in Saeima committees

Parties elected to the 13th Saeima have picked representatives to work in the parliament’s standing committees. Final decision will be made 20 November. Harmony may be represented by deputies Nikolajs Kabanovs and Jānis Tutins in Saeima’s Foreign Affairs Committee. Attīstībai/Par! has picked Artis Pabriks, and Union of Greens and Farmers has picked Uldis Augulis.

EU leaders: No appetite for renegotiating Brexit deal

EU leaders have dismissed talk of renegotiating the draft Brexit deal and warned the UK's political situation could make a «no-deal» more likely.

Some rain expected for Latvia’s centenary; cold snap expected next week

The sky will become clear every now and then. Still, some rain is expected for the country’s centenary. Wet snow is expected in the country’s eastern regions. It will be dry in the country for the most part next week, as reported by Latvian State Environment, Geology and Meteorology Centre.

Latvian ministry plans to form Media Ethics Council and develop Latvian Media Ethics Code

Culture Ministry has proposed forming Media Ethics Council. The majority of institutions of the media industry have started working on a self-regulatory council and development of a Single Latvian Media Ethics Code, as reported by the ministry’s public relations office manager Lita Kokale.

Harmony picks representatives in Saeima’s committees

Nikolajs Kabanovs and Jānis Tutins may become Harmony’s representatives in Saeima’s Foreign Affairs Committee, whereas Valērijs Agešins may become the party’s representative in the National Security Committee.

Lithuania’s corruption buster: firms donating to hospitals stand better chance in tenders

The majority of the winners of the tenders organised by major Lithuanian hospitals have expressed their gratitude to the health providers by making donations to them in the form of financial support.

Employment level in Latvia reached 65.3% in Q3 2018

920.1 thousand people or 65.3 % of Latvia population aged 15–74 were employed in Q3 2018. Over the year, employment rate grew by 1.7 percentage points and number of employed persons by 17.2 thousand.

Unemployment level in Latvia was 7% in Q3 2018

In Q3 2018 Latvian unemployment rate constituted 7.0 %. Compared to the previous quarter, unemployment rate fell by 0.7 percentage points, while over the year by 1.5 percentage points.

AS PKL Flote enforces EUR 1.35 million from Riga Freeport authority in court

The Department of Civil Cases of the Supreme Court has ruled that the verdict of Riga Regional Court – one that penalized Riga Freeport authority for breach of Competition Law against PKL Flote – was correct. Now Riga Freeport has ten days, starting with 13 November, to pay the company EUR 1.35 million to cover damages caused by this violation, BNN was told by PKL Flote board chairman Sergejs Odincovs.

British government loses two more members; EU sets date for Brexit summit

In the UK government, Brexit minister Dominic Raab and Northern Ireland's junior minister have resigned in disagreement with the country's draft withdrawal agreement with the EU, already passed by the government.

Saeima deputy: data protection regulation will not protect «KGB associates»

Documents detailing KGB workers’ names, nationality, work place, participation in the Communist party are not covered by the Personal Data Protection Regulation, stresses Saeima deputy Ritvars Jansons from the National Alliance ‘All for Latvia’ – ‘For Fatherland and Freedom/LNNK’.

EP: Moldova and Georgia should continue initiated reforms

Members of the European Parliament welcome the reforms Georgia has commenced. At the same time, Moldova was criticized for its worsened state of democracy and rule of law, as reported by EP press-secretary in Latvia Signe Znotiņa-Znota.

Germany economy shrinks for first time in three years

Germany economy has contracted by 0.2% in the third quarter of 2018, a first such result in the largest economy of the European Union in over three years.

Latvian president gives parties holiday break to continue talks

Latvian President Raimonds Vējonis calls off nomination of NCP candidate Jānis Bordāns to for government. Talks regarding the next prime minister candidate will continue after the state holiday.

Ireland satisfied with Brexit draft deal in every priority

The government of Ireland has stated that draft withdrawal agreement between Irish neighbour, the UK, and the European Union, Dublin had achieved a satisfying result in all its priorities, also regarding the border on the island of Ireland.

Bordāns: NCP will not support Pabriks’ government because KPV LV will not support it either

If the President of Latvia decides to nominate Attīstībai/Par! member Artis Pabriks, KPV LV will not work in this government. New Conservative Party would take the same position, according to what politicians told Tieša runa programme of LTV.

British government supports draft Brexit deal

British Prime Minister Theresa May received the support of her government on the draft Brexit agreement the UK has reached with the European Union, which would see the UK remain in the EU customs union until the end of 2020.

Newest comments

What would you wish Latvia for its centenary?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: