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Rīgas satiksme’s debts come close to 300 million; Ušakovs says company is doing well

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RURiga City Council has voted in favour of allocating an additional grant of EUR 22 million to Rīgas satiksme. This means this year the company has cost the city EUR 123 million, reminds Nekā personīga.

The programme also adds that five years ago the company had signed contracts for the purchase of 175 buses and 125 trolleybuses. So far, however, less than half of the ordered vehicles have been supplied. «At the same time, RS has ordered 20 low-floor trams. To fulfil the plan, the company has borrower around a hundred million euros. The company’s debts will likely exceed EUR 300 million,» Nekā personīga reports.

The programme notes that on top of wages and fuel, the company will have to pay more to banks. Nevertheless, although the self-cost of trips will steadily increase in future years, Riga Mayor Nils Ušakovs will not increase ticket prices. Prices will be subsidized from Riga’s budget.

The programme stresses that RS concluded 2017 with long-term debts of around EUR 202 million. «The law makes it a duty for RS to publish accounts for each quarter. The debt was EUR 255 million in the Q1 account. The half-year’s results should have been published in August, but this was never done.»

NP also adds that active replacement of old vehicles commenced in 2013, when the company signed contracts for procurement of 125 trolleybuses. Another 175 trolleybuses were ordered a year later. It was planned to introduce them gradually over a course of five years. Now the five-year term is coming to an end. Over the course of one and a half years, RS will have to purchase more than 80 buses and 50 trolleybuses.

«In 2016, the company procured another 20 low-floor trams for EUR 62 million. The trolleybus contract has been reduced by 25 units. Suppliers will receive the full fee once their vehicles start carrying passengers in Riga. To pay for all the new vehicles, RS will have to borrow more than EUR 100 million,» the programme reports.

In a conversation with the programme, RS Administrative Resource Office director Elīna Epalte-Drulle said the following in regards to debts and unpublished financial account: «We have to enhance our financial account. The final document will reflect this data. (NP: No way to find out now?) Currently we do not have estimates, because we prepare each account once we have all the information. Currently we have none. (NP: But shouldn’t that financial account be ready by now?) The final preparations still continue. (NP: Digits are so bad it is better left undisclosed?) Well, it won’t be horrible, this is what I mean. We plan everything systematically so that there are no surprises. We plan the digits and we plan this year’s payments. (NP: Then what is the digit?) It exceeds 200 million. As you can see, annual digits, as I’ve mentioned, will grow from 20 to 30 million. Still, the jump will not be enormous.»

Data from Lursoft shows that RS debt may range from 270 to 280 million euros. The debt is gradually increasing, because RS gradually starts using the buses brought to Riga some odd 70 years ago, NP adds. Epalte-Drulle: «Next year, when the next supplies are expected to arrive, we plan to perform the next payments once vehicles have been commissioned. (NP: Then the amount will reach those 300 million. The question is will it happen this year or the next?) Yes, this is why I cannot mention any specific amounts, because it depends on supplies. At some point we plan to increase the volume of commitments.»

Although the debt increase of at least EUR 80 million should impact on the company’s regular expenses, Epalte-Drulle denies this. «Payment schedules are made in a way that allows for an increase, but not as major’ as the ones for wages or fuel.»

The programme continues, saying that with the increase of wages, fuel and insurance costs RS requested additional grants from Riga City Council this year already. «EUR 4,750,000 is needed to cover discount tickets. EUR 17.7 million is the difference between the expected self-cost and actual costs. This year’s grant provided to the company reaches EUR 123 million,» Nekā personīga reports.

In a conversation with Nekā personīga, Riga Mayor Nils Ušakovs said everything is fine with RS: «Aside from the social function, a no less important function is mobility, when people use Riga’s public transports. For people to use the social functions and RS’ public transports, it is necessary for the company to develop. All trolleybuses will be modernized by 2020. This also applies to all buses and half of the active trams. The company is doing well.»

To reduce transport costs, the city council may reduce discounts, passenger comfort level or increase ticket prices. But the municipality will not do this, the programme reports. Ušakovs commented on prices the following way: «On one hand, it is important for us to ensure residents and guests use Riga’s public transports. On the other hand, it is important for the tariff to be as close to the self-cost as possible. 1.15 is below its self-cost. Raising the tariff would be wrong because it would not contribute to use public transport services. With that, we see no logical reason to increase tariffs in the foreseeable future.»


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