Latviski English По-русски
Monday 19.08.2019 | Name days: Melānija, Imanta

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

(No Ratings Yet)

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.

Leave a reply

EU: Rīgas satiksme cuts Latvian budget fiscal room in 2020 by 72 mln EUR

The Riga city company Rīgas satiksme should, according to European Union criteria, be in included in the general government sector, thus it would cut the fiscal space of the 2020 Latvian state budget by 72 million euros, Finance Ministry stated.

Latvijas Krājbanka’s administrator recovered 542 thousand euros in July

The administrator of the insolvent Latvian bank Latvijas Krājbanka recovered 524 444 euros in July, which is by 75% more than a month earlier, according to the official gazette Latvijas Vēstnesis.

Latvian post-reform administrative centres to have 2 000 - 630 000 populations

After the planned administrative reform of Latvia, the population size of the administrative centres of the new municipalities is expected to vary from 2 000 to 632 000 people, according to a conceptual report by the Ministry of Environmental Protection and Regional Development.

A week of warm, but changing weather forecast for Latvia

Weather in Latvia this week is expected to be summer-like and warm, with rain expected on Thursday and Friday, according to the Latvian Environment, Geology and Meteorology Centre.

Kabul wedding terror attack committed by Islamic State, the group says

Responsibility for the terror attack in Afghanistan, where explosives killed 63 people. has been claimed by the Afghan branch of the Islamic State terrorist group.

British Gibraltar releases seized Iran oil tanker

An Iranian oil tanker detained by Gibraltar, part of the United Kingdom, has sailed away from port after being allowed to do so despite Washington’s call to detain it again.

BNN summary of the week: Latvia’s biggest budget; PNB Bank halts operations; Latvia sad with Latvia

Some positive news surfaced in Latvia this week – Prime Minister Krišjānis Kariņš announced that the country’s next budget will be the largest one yet and will exceed EUR 10 billion. In spite of this, however, financial difficulties have been observed – PNB Bank has ended up in a tight spot. The bank’s shortage of funds has forced Finance and Capital Market Commission to halt all of the bank’s financial operations.

Week in Lithuania: PM Skvernelis undergoes surgery, Nausėda meets Merkel, rebukes Latvia

Last week, President Gitanas Nausėda rejected the government’s candidate for EU judge, hints of big changes at Šiaulių Bankas ahead

Independent Deputies Faction joins forces with Honour to Serve Riga

Riga City Council’s Independent Deputies Faction has signed a cooperation agreement with Honour to Serve Riga political party, pledging support for the party’s mayoral candidate Oļegs Burovs, as LETA was told by the faction’s leader Valērijs Petrovs on Monday, 18 August.

Saeima’s MPC investigation committee requests information on every issued license

The parliamentary committee formed to investigate the mandatory procurement component has requested access to information regarding every issued MPC license and decision made by officials in regards to this field, says the committee’s representative Ilze Vanaga.

Latvian athlete receives two-year disqualification

Former Latvian long jumper Ineta Radeviča has received a two-year disqualification, as confirmed by International Association of Athletics Federation’s Athletics Integrity Unit.

Minister: state budget funds will not be used to compensate PNB Bank’s clients

The Deposit Guarantee Fund is sufficient to pay compensations to affected PNB Bank clients. This means not a cent from Latvia’s state budget will be used, said Latvia’s Finance Minister Jānis Reirs in a telephone conversation with public broadcaster LTV programme Rīta Panorāma on Friday, 16 August.

Estonia to invest 22 million in construction of a new TV house

Estonian government has set aside EUR 22 million for the construction of a new public television building, as reported by Estonian public media ERR.

Another one falls – Latvian FCMC halts PNB Bank’s operations

Operations of PNB Bank [formerly Norvik Banka] have been halted in Latvia, as confirmed by Finance and Capital Market Commission.

Unemployment index in Latvia drops – rate down to 6.4% in Q2

In Q2 2019 Latvian unemployment rate constituted 6.4 %. Compared to the previous quarter, unemployment rate fell by 0.5 percentage points, and compared to the rate recorded a year ago, it dropped by 1.3 percentage points.

64.7% of Latvia’s population reportedly employed in Q2 2019

905.6 thousand people or 64.7 % of Latvia’s population aged 15–74 were employed in Q2 2019.

Lithuanian Conservatives’ tensions: can the party split?

The Conservative Homeland Union - Lithuanian Christian Democrats (TS-LKD) have risen to unseen heights lately – although in the opposition now, in 2016 parliamentary election the party racked up a record support in its 30 years’ history.

Minister: Latvia’s social budget surplus has reached one billion

The surplus of the state social budget has come close of the pre-crisis level – EUR 1 billion, said Latvian Welfare Minister Ramona Petraviča in an interview to LTV programme Rīta panorama on 15 August.

Riga City Council permitted to elect mayor after two-month deadline

In spite of the fact that 21 August will mark two months of Riga City Council working without a mayor, a condition that permits Latvia’s Saeima to dismiss the entire city council, deputies of the municipality will nonetheless have the right to elect a mayor after the deadline, says Environment Protection Minister Juris Pūce’s advisor for legal affairs Valdis Verners.

Lithuanian president unhappy with Latvia’s decision to purchase energy from Belarus

Lithuanian President Gitanas Nausėda has voiced sadness over Latvia’s decision to purchase electrical energy produced at Astravets nuclear power plant in Belarus not far from the Lithuanian border. He admits, however, that this decision was not unexpected for him.

State Real Estate claims ReRe Būve 1 may be trying to circumvent the law

Construction company Rere Būve 1 publicly voices desire to continue implementing the construction contract. However, the construction company’s submitted work schedule for reconstruction of New Riga Theatre has everything changed – volume of work, terms and budget, Latvian State Real Estate reports.

Lithuanian mountaineer dies climbing French Alps

Lithuanian 38-year-old mountaineer Vytautas Mažeika died in a 50 m fall in the French Alps, Lithuanian public media LRT reports with reference to

Estonia decides to reform pension system; increase not promised

Helir-Valdor Seeder, leader of Estonian coalition party Isamaa, has confirmed that the government has agreed on his proposed pension reform, as reported by Estonian public media ERR.

Ruling party in Lithuania promises national agreement for education affairs

While more and more small town schools close down in Lithuania, the leader of the ruling party promises a «national agreement» for education affairs, as reported by Lithuanian public media LRT.

Viesturs Zeps’ has yet to convince NCP and Unity to support him as mayoral candidate

Mayoral candidate in Riga Viesturs Zeps still has not convinced New Conservative Party and Unity to support him, according to what he said in an interview to public broadcaster LTV programme Rīta panorama on Thursday, 15 August.