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Ceturtdiena 02.04.2020 | Name days: Imgarde, Irmgarde
LatviaLatvia

In spite of austerity measures, Rīgas satiksme’s grants could reach EUR 134 million

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn spite of ongoing austerity measures, grants needed for SIA Rīgas satiksme may grow by another EUR 12 million and reach EUR 134 million, admits the company’s temporary board chairman Anrijs Matīss.

Such conclusions were made based on the report written by Ernst&Young on the current situation in the municipal company. According to Matīss, the report is ‘very critical’ and contains a number of recommendations for the company to continue functioning.

Recommendations are also related to the chosen cooperation partner, self-cost calculations and other processes. At the same time, authors of the report mention that in the past five years the now former management board of Rīgas satiksme had caused the company losses worth dozens of million euros.

«Losses were caused as a result of several processes – budget and self-cost calculation, different cooperation agreements, and debt recovery. One example is the contract with Rīgas mikroautobusu satiksme – within one month’s time losses cause by this reached EUR 600,000. Additionally, the compensation of EUR 11.6 million requested from the city council in 2018 was below the actually needed amount, which caused the company to work with losses. This year’s losses are estimated around EUR 3 million,» explained Matīss.

Although initially the new management of the company had planned for grant to not exceed last year’s amount of EUR 122 million, it has been decided that in order to guarantee proper functioning of the company the grant from the city council should reach EUR 134 million. The increase of grants is needed in spite of austerity measures intended to save EUR 95 million.

Commenting on the fact that responsibility for uneconomical decisions should be asked of the company’s management board, Matīss noted that this decision is in the hands of the company’s shareholder – Riga Mayor Nils Ušakovs. «It is clear that the company’s management board and representatives of its procurement committee are responsible for all decisions. We have provided the mayor with materials of the audit, and it is now his responsibility to decide if those people should be held accountable for the losses and enforce compensation from them. We have done all we can to improve the quality of work performed by the management,» said the official.


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