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Wednesday 19.09.2018 | Name days: Verners, Muntis

Gailis compares government to pupils

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Maris Gailis

The government is not making use of the crisis to reduce burecraucy, because it would be like cutting their own flesh, the businessman Māris Gailis told in an interview to the business news portal BNN, at the same time introducing to his business activities and forecasts that Latvia will have to import workforce from Russia and Belarus.

Are you free from any credit liabilities at the moment?

Not actually. I have settled those tens of millions of lats I owed to Swedbank. I sold everything I had to sell to get rid of these liabilities. Both parties suffered losses. I have fully made it up with the bank and now I have only small non-business related liabilities.

Would you be able to advise other businessmen on how to create a constructive dialogue with the bank?

Yes, I believe it is always smarter to find a compromise with creditors. The parties should not take a too rigid position.

How come you were that long-sighted not to introduce private guarantees to your projects?

To be honest, I was not asked to. I have had them on one house while it was being reconstructed and up to the point I rented it. In the fat years I had a yacht with private guarantees, I sold it afterwards. If I had guaranteed for the large-scale loans, the story would have turned out completely different.

They say you are interested in wind parks?

Yes, energy is an interesting topic. However, there are obstacles I cannot grasp – the line is right there, but Latvenergo refuses to provide a connection, instead offering us to build a new million lats worth power line from Ventspils substation. It is not simple, but we have also other plans regarding wind. That land is an open field with God itself granting it wind. So we are in the process to carry out measures in a year’s time.

I have also bought one hydroelectric power plant currently under reconstruction. We were granted 130 000 lats funds from the CO2 quotas sale. Otherwise I would not do that. This allows boosting the efficiency of the plant. That is a small business, but it is  an interesting one, though.

Could Latvia become independent in energy production?

Renewable energy plants cannot do without the state support, due to the expensive technologies. Probably, huge wind parks on a shelf could, but this means massive investments. This would, of course, pay back in 10 ten years time, as energy tariffs are constantly climbing. I believe Latvia could gain energy independence by developing biogas and biomass. Cogeneration plants is a good thing, but where to put the excess heat? It could probably be directed to some smaller plants, for example, to prepare briquettes for individual heating. This is a brand new technology, not yet in existence in Latvia.

How is your IT business?

My friend Janis Vaišļa and I have founded a company VESet, which has been granted distribution rights in the Baltics for a good TV production program Sinergy made in Germany, Munich for 10 years already. It is a professional signal processing program that sends the signal right to Sinergy archive, which is like a heart. Once it is loaded in the archive, the journalist, director or editor can start assembling the story. Afterwards time is set in the playlist when it should go in the air, cable or Internet portal. The archive stores everything, thus it also easy to locate all you need. This programme is comparatively cheap, so that many will be able to afford it. Similarly, we are also putting together all the equipment ourselves, like “garage geniuses”.

How do Brussels regulations slow down business activities in Latvia?

It an enormous red tape with Latvians believing they must do in advance everything that has popped into Brussels officials’ minds. Latvians should stick to their common sense.

Should we wait for real investors?

Foreign investments attraction must be considered more carefully, instead of arguing among ourselves. Pulp factory was a good idea, but the location was not right. Latvia has missed on several grand projects, for example, Coca-Cola factory moved to Tallinn, while Isover cotton wool production in Ikšķile was turned down by the inhabitants it.

Can the main aim of Latvia be catching up with Estonians?

Very motivating (laughing). Dombrovskis government’s faith is to mend the economy and fight the crisis. Unreasonable tax rises have alienated businessmen from the state. The government is not making use of the crisis to reduce burecraucy, because it would be like cutting their own flesh. Two thirds of the public officials should be made redundant – that is logical. The right moment for devaluating the lat was missed. I assume upon introducing the euro, the lat will be devalued as well, at the exchange rate one to one. As a result of which the state expenditure could be cut.

Will Latvia have to import workforce from Russia and Belarus?

We will be forced to, because our mentalities with other nationalities as Turkish, Korean, Chinese and Arabs differ too much. But we have the same way of thinking with Russians and Belarusians. Similarly, they are also Christians with the same values.

Latvian Chamber of Commerce and Industry require creating a post of a special Reforms Minister to claim responsibility from any minister. What do you think about this?

I as reforms minister – prime minister’s of that time Valdis Birkavs deputy had the political authority to launch reforms in the civil service. When we joined the Ministry of Culture and Ministry of Education, the maestro Raimonds Pauls resigned in an impressive manner (laughing). Back then we wanted to switch to zero-based budgeting. Currently, there is a basis and each ministry is fighting for not cutting it, which is completely wrong. They should prove all the costs. Secondly, the state budget must be sustainable, but the government is acting like pupils. There are no actual future plans. At least I have the impression all the government does is offering promising phrases. Everything is cut and it is not clear which sector we are going to focus on. Will it be IT innovations or music and opera, where Estonians lag far behind us. I am not jealous of Estinians inventing SKYPE, but we should accomplish something similar.

Why is it that often insolvency proceedings are not beneficial for fair businessmen?

Banks are perfectly well aware of the fact companies insolvency is not profitable for them. It is better if I myself give up the property and the bank writes off the gap in exchange for what is sells on the auction. I lose my part of investment. The bank loses the gap between the sums. Ģipša fabrika I has been fully sold out to the owners of the apartments. I still own two garages there. We managed it up to the point the inhabitants themselves made up a union with its own leader. I managed to sell Ģipša fabrika II to NC Holdings that is going to sell my wife Zaiga’s and my Gailes project. Which is reduced, of course, because times have changed and other types of apartments are demanded. My wife remade this project by subdividing the large apartments into smaller ones.

Do you believe the Northern Bridge will be built?

Yes, I support the idea. The use of it might be charged. We are not experienced in building tunnels, thus builders will lobby this idea.




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  1. dita says:

    How was your trip around the world and where did you get the money to pay for it?

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