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Monday 19.08.2019 | Name days: Melānija, Imanta

Latvian minister: not many can expect getting a raise in 2019

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUWages in Latvia’s culture sector, especially when compared to other industries, are insufficient. On top of that, it will not be possible to change the situation this year: not many people can hope getting a raise in 2019. At the same time, the promise to keep wages as a priority in next year’s budget remains. In regards to the possibility of this happening, Culture Minister Dace Melbārde could not say a straight ‘yes’ in her interview to BNN.

«[…] finding fourteen million in Culture Ministry is simply impossible»

Melbārde says the goal of Latvia’s Culture Ministry is ensuring higher average wages in the public sector. «There are only a handful of institutions that meet this objective – wages in most institutions are below average in the country. The lowest wages are found for museum workers and theatre workers, especially support crew.»

In regards to low wages of those people, the minister says there in an enormous problem, especially considering the shortage of workers in those professions. «We are unable to guarantee good wages for engineers working with complicated technologies in state institutions. This means there is no way for us to retain employees. For example, tailors and hairdressers are already in the free market, and they are paid much better wages in the commercial sector.»

The culture minister also turns attention towards wages paid to musicians. «Wages there are not the lowest in the culture ministry, but it is still a risk group because they are the most mobile workers. Demand for Latvian musicians in the world, especially Europe is great. We could lose good musicians if we cannot offer their competitive wages. And competition here should be viewed on a regional scale. We need to look at wages in Estonia, Lithuania and Poland. It is currently hard to compare Latvia to Scandinavian countries.»

It is not possible to fix this situation because Culture Ministry does not have large internal reserves to afford increased wages and meet the ministry’s goal – wages higher than what is paid in the public sector, said the culture minister.

«We would require EUR 14 million to achieve this. The amount is not that large when you look at the sector as a whole – 5,000 employed people. However, finding this EUR 14 million in Culture Ministry is simply impossible. With that said, we cannot fix anything, only hope Latvia’s economy will develop and more money appears in the fiscal space to secure wages,» Melbārde told BNN.

The minister promised to keep wages of culture sector’s workers a priority for Latvia’s 2020 budget. She also stressed that for years Culture Ministry has not had enough money to fix all problems present in the industry.

«Renovation problem – almost no action has been taken since the Soviet times»

As for «more painful topics», the culture minister said the following: «The second most painful topic is maintenance of our infrastructure. Culture Ministry has 50 state institutions spread across 100 addresses. And if we have 100 addresses doing important work and if things happen everywhere, there is a need for improvements.»

Currently there are several objects undergoing renovation and reconstruction. Work is also performed in the construction of a completely new object – National Museum’s storehouse. «It is highly important to complete them all and ensure their function.»

The minister mentioned several renovation projects. One of the most topical problems is that many of them have seen no maintenance since the Soviet times. «For example, Riga Circus is practically locked down. A lot of funding is needed to restore the building. The situation with Latvia’s National Archive also needs a solution. We don’t have space; buildings are in poor shape and will require fundamental restoration work in the future.»

Culture Ministry’s ‘fight’ over Latvia’s National Library litigation

«Statistics show that 50% of rulings made by first instance courts are cancelled and overturned in the end. With that, we do not believe the information reported now is some absolute truth,» commented Melbārde about the partially satisfied plea submitted to Riga City Vidzeme Suburb Court by National Association of Construction Companies for the enforcement from Culture Ministry EUR 9,272,319, as well as court expenses of EUR 60,083.

Culture Ministry firmly believes the contract with National Association of Construction Companies was completed in full accordance with all obligations listed therein. «All decisions regarding payments were made based on careful and precise measurements and use of construction cost indexes that were provided to us beforehand by the Central Statistical Bureau of Latvia.»

«This means there is no room for interpretations for Culture Ministry,» adds Melbārde.

Culture Ministry believes it has followed all obligations listed in the contract in accordance with data an information provided by the hired construction engineer and statistical bureau. «We believe the EUR 195.6 million paid to builders over the course of eight years is adequate for the work they did. It is also important to note that a large portion of the library’s construction took place during a period of economic recession. This means much of the work cost less,» says Melbārde.

The ministry believes the ruling made by the first instance court was unjustified and unfair. «Together with legal advisors we have gone through the ruling and we intend to appeal it. It should be said that the request from National Association of Construction Companies, though partially satisfied, still demands payment of EUR 9 million from taxpayers’ funds. This money could be better used to pay better wages to teachers. We believe we are fighting the good fight and we will go as far as we have to in order to protect taxpayers’ rights here,» Melbārde comments the situation.

Culture Ministry also mentions that it is not simple to reach a consensus in such a complicated case. «There is a need for a more in-depth and multi-layer evaluation. I would go as far as to say this was not the final verdict.» Melbārde says the ministry believes this ruling of the first instance court will never come to force.

«In this case, if we look at contractual relations in the library project, the state was clever without even applying any indexes. It is no surprise the conflict is about indexation,» she comments.

«Construction cost growth often surfaces as a result of long construction»

As for Latvia’s plan to build the National Concert Hall, Melbārde says it is not the planning process that is long, but the confidence of legislators that Latvia even needs such a project.

«We have not yet reached actual project planning, because we have yet to decide where to build the National Concert Hall. Among other things, the planning process of Latvia’s National Library was relatively quick, because it had the law at its back, which helped clarify things. As for the concert hall, if a decision is reached in regards to location and funding model, we will proceed with National Concert Hall Law, which will ensure successful completion of the project.»

«If we look at problems with construction projects in the whole country, we will see that often they are associated with technicalities and planning, which should be taken more seriously. In this case, it is not just about Culture Ministry’s objects – it is about the specifics of construction processes in Latvia,» says Melbārde.

According to the minister, the problem is associated with technical side of construction projects, their planning. «It is possible, there is a shortage of specialists who can do this well enough. This is not the case with National Library. The conflict is not about poor planning – it is about indexation of costs.»

«This is what we have discussed with the Cabinet of Ministers – more expensive construction costs, an often reason for which is that the time period between planning and realization is very long. It is hard to predict a possible rise of construction costs in the planning phase. This is why Economy Ministry has been asked to think about ways to better plan out construction processes and applying appropriate methodology in order to predict a possible increase of costs as early as possible,» BNN was told by Melbārde.

According her, it is necessary to provide that in the case of major construction objects it is possible to secure economic growth, when costs may increase or decline: «This means cost indexation is one of the answers to help regulate major projects undergoing long planning and construction period.»

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