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Saturday 20.04.2019 | Name days: Mirta, Ziedīte

Riga City Council allocates requested EUR 130 million grant to Rīgas satiksme

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUDuring a meeting of shareholders and board members of SIA Rīgas satiksme, it was decided to provide the company with EUR 130 million grant, as well as continue optimizing the company’s expenses, said Riga City Council Chairman Nils Ušakovs.

Previously, the head of the company Anrijs Matīss had publicly said that Rīgas satiksme would require at least EUR 130 million from the municipal budget this year. Last year, the company received EUR 122 million from the city council. According to the new management, however, this is not enough to cover actual costs.

Rīgas satiksme concluded 2018 with losses worth EUR 6.3 million.

Yesterday Matīss considered leaving his post as head of Rīgas satiksme. However, after discussing things with the shareholder – Riga City Council Chairman Nils Ušakovs – he changed his opinion. «Every person has limits past which he cannot change anything. So we need to reach an agreement. Mutual agreement and support from the shareholder can help us work and resolve everything. If there is no support, however, it’s another story, because there are many aspects Rīgas satiksme cannot resolve on its own,» said Matīss.

At the same time, he did not hide that the company’s state is ‘very bad’. «At the very least our budget is 1/12 of last year’s budget. But we have to pay bills and wages. The question is – if there is no budget, what can we really do? It only makes sense that all city council structures require money, but at the same time we cannot survive with what was already not enough last year. EUR 130 million grant is the minimum we need. Additionally, there is also the cooperation agreement with Rīgas mikroautobusu satiksme, which also creates losses worth EUR 6 million a year,» the head of the company comments the situation.

Matīss rejected the claim that residents should expect ticket price rise soon. At the same time, he admitted that the primary reason for difficulties is that the company’s calculated ticket price has not covered the self-cost of trips in the past four years.

Ušakovs stressed that there is no need to discuss increase of ticket prices, because the municipality’s objective is making sure people use public transport more often and forming the city’s budget in a way to ensure all approved discounts.

As it is known, Matīss was appointed as Rīgas satiksme’s temporary manager on 13 December 2018, replacing Leons Bemhens, who is a suspect launched by Corruption Prevention and Combating Bureau in regards to Rīgas satiksme’s procurements.

The first thing he did after his approval, Matīss commenced an audit at Rīgas satiksme.

The audit revealed that RS overpaid EUR 6 million in a fuel procurement involving a firm whose owners hide in offshore areas. Additionally, RS used up the loan allocated for the tram procurement on wages. 40% of revenue from ticket sales was used to maintain the expensive e-talon system, as previously reported by Ir magazine.

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