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Wednesday 16.10.2019 | Name days: Daiga, Dinija

Opinion: Latvian Railway's misleading privatization winds are blowing from Ventspils

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe chief of Latvian Railway (LDz) Edvīns Bērziņš has no way of not knowing that laws of the Republic of Latvia prohibit privatization of the country’s strategically important companies. Only the Saeima has the authority to decide on such topics. This only supports the possibility that Bērziņš’s statements after the public bashing he and other LDz officials had received from Latvia’s transport minister were clearly meant to mislead society. Moreover, the source of said misleading statements may be Ventspils, as reported by portal.

It is worth mentioning that after the no-confidence voiced by Transport Minister Tālis Linkaits towards the chairman of LDz and two other board members, Bērziņš said that the minister’s statements «are aimed at towards privatization of LDz».

Desperate attempt to «switch focus» on «secret privatization» reminds a recent discovery – that six years ago LDz hired private firm Composite Constructions for the construction of a sound-dampening wall at Šķirotavas railway station without organizing a public tender, transferred EUR 500 000 as advance payment, which the firm later transferred to two firms registered in Hong Kong and… the end. «No wall and no money, and now LDz has to return EU’s co-financing amount.»

«Although the decision was made during Ugis Magonis’ time, it is hard to believe then the board member of LDz Edvīns Bērziņš knew nothing about it. It is more than odd that it took the state company four years to finally take notice of the situation and consider ways of recovering the money after the announcement of insolvency of Composite Constructions. But by the time LDz noticed something is wrong, the company’s accounts were already empty and it is unknown where the money went,» the portal reports.

Continuing on the subject: «Raw materials found in the company’s warehouse were procured for prices ten times exceeding their actual value. When asked why LDz became interested in recovery of funds so late, an answer is provided by Composite Constructions insolvency administrator.»

«LDz is fighting for creditor’s status only to avoid responsibility for certain officials for what happened.»

«Information has surfaced that there have been corruptive actions performed in LDz in relation to lease of rolling stock owned by LDz Cargo, which may have been accomplished by defrauding funds. Bērziņš’s claim that the company’s internal audit had allegedly proved – all activities performed in the company comply with regulations – seems rather unconvincing and LDz chief’s desperate attempt to switch focus on ‘secret privatization’ is not surprising either,» explains

The portal also reports that turning attention away from more important topics may be one of the reasons for speculations regarding «secret privatization». The other reason is clouding people’s minds and starting a storm on a political level. «It is no surprise the so-called railway privatization was on Aivars Lembergs agenda.»

It was publicly mentioned several times that LDz’s donations’ and promotional contracts’ non-transparency raises suspicions that the river of donations and promotional funds flows in the direction of political winds, reports. «Because in recent years the winds ruling over Transport Ministry have been blowing in the direction of suspended Ventspils Mayor Aivars Lembergs, supporting Ventspils sports clubs has become normal practice for LDz and its subsidiaries. For years this state company has paid hundreds of thousands of euros to Ventspils Basketball Club, the council of which included Lembergs. Generous donations were also provided to Dobele Motor Club, in which Uldis Augulis’ son had trained in the past. There is also the matter of unclear contributions provided to Ventspils Development Agency. It is very possible the facts that have surfaced so far are but the tip of the iceberg,» estimates.

What the transport minister has said about LDz distorting competition with freight transport services by giving preferential treatment to its own subsidiary LDz Cargo, suspicious expenses on promotion and marketing, as well as the general wasteful practices employed by this state company represent a serious signal that requires immediate assessment. But it seems LDz Council is not in a hurry – the decision regarding possible dismissal of board members will come only after results of a new audit have been made available. Meanwhile, Lembergs and Bērziņš are trying to confuse people with alleged privatization of LDz to avert attention from the enormous pile of problems uncovered thus far, the portal concludes.

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