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Ceturtdiena 22.08.2019 | Name days: Rudīte, Everts
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Minister: administration of Latvian Railway cannot be trusted

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe current administration of Latvian Railway cannot be trusted – they do not understand European Commission’s free market regulations. Moreover – there are suspicions of corruption and internal scheming within the company, said Latvia’s Transport Minister Tālis Linkaits during a press-conference.

Latvian Railway chairman and president Edvīns Bērziņš, board member and vice-president Aivars Strakšas, as well as vice-president Ainis Stūrmanis received the biggest portion of bashing from the minister for «non-transparent activities».

«I have met with LDz administration and shared with them my impression about the company’s overall work. When I began my work in the ministry, I made it clear we would assess all companies for compliance with good corporate management principle to prevent different kinds of scheming and crimes of corruption, which have been historically recorded here. And respectively, after performing the assessment, I informed the administration of Latvian Railway that

I cannot trust them due to a number of reasons,» said Linkaits.

When asked to explain the reasons, the minister said: «First of all, the industry is in the process of being opened for the free market. We discussed non-regulation of the industry, and at the same time the Competition Council has initiated a case regarding abuse of dominant position and market distortion, which puts the country at risk of serious financial consequences.

The general feeling is that the board of LDz does not really understand European Commission’s and EU’s requirements in regards to market openness for free competition».

Another aspect is potential corruption and scheming in the industry. «We compiled and forwarded information to Corruption Prevention and Combating Bureau on 25 April. The ministry is not an investigative institution. This is why I trust authorities will do their jobs and make accurate conclusions,» said Linkaits.

The minister’s first impression is that many tasks on the highest level are done in a non-transparent manner, allowing different kinds of schemes and corruptive activities. «On top of that, if we touch the subject of wasteful use of property and different advertisement and marketing contracts in which LDz Council has requested audits, even this, I believe, points to the fact that the administration did not act as a responsible owner.»

Another aspect is potential corruption and scheming in the industry. The minister did not want to go into details during the press-conference. He only said the corruption cases are related to advertisement contracts. Linkaits said the exact amount paid will be clarified in the future. He only said this amount «is very large».

The minister also stresses that a large amount of emphasis in advertisement contracts was noticed in Ventspils and Dobele.

There is no logical reason why these two cities require so much sponsoring, especially considering these two cities do not have a large number of LDz clients. «With that, we believe many advertisement and marketing contracts were not related to the company;s main form of activities.»

When asked by journalists if contracts could have ties to Aivars Lembergs and Uldis Augulis, the minister said: «I hope we will learn about motivation more through audits».

Linkaits, explaining his request for LDz council to dismiss LDz board members, comments: «I would find it hard to work with a company’s board in the implementation of objectives detailed in the action plan in relation to the country’s railway industry. The decision to keep or dismiss board members is in the hands of the company’s council.»

The council will decide on the aforementioned board members’ remainder in their posts next week. In the next couple of weeks the council will decide on the aforementioned individuals’ remainder in their posts, considering dismissal is an act in the hands of the council, not the minister. At the same time, the minister can advise the council on how to act.

Everything said thus far does not apply to board member Ēriks Šmuksts, who, according to the minister, is described as a patriot and professional in his line of work. «We have not found anything compromising or worth criticising in his work. Therefore I trust him to continue performing his duties.»

As it is known, Bērziņš has been a board member of Latvian Railway since 2011 and its chairman since 2016. His term ends 24 February 2021. He is also the current deputy chairman of RB Rail.

Strakšas has been a board member since 2005 and his term ends 28 August 2022. Šmuksts has been a board member since 2008 and his term ends 1 December 2022. Stūrmanis has been a board member since 2016 and his term ends 17 July 2021.


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