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Monday 16.07.2018 | Name days: Hermīne, Estere
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RP: SA's findings prove the necessity for reforms at the Riga Free port

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“The violations recently uncovered by the State Audit (SA) at Riga Free port (RFT) are one more point in favor of reforms initiated by Reform Party (RP) in regard to the port’s administrative structure,” – emphasizes the party’s Saeima faction’s Chairman Vyacheslav Dombrovskis.

“The report of SA clearly states a number of violations that were allowed in the period between 2009 and 2011. The question remains – just how much money was squandered throughout the whole of the port’s activity period?” – Dombrovskis says.

The port requires a clear and precise management model: in which cases is the port’s administration allowed to perform business operations – port authorities often carry out commercial activities within the port territory they manage. This negatively affects investment attraction. Investors, the Competition Council, the Supreme Court have all noted how unacceptable this situation is, RP notes.

The port’s management model needs to be transparent and open. It needs to secure general information availability in regard to the decisions the port’s administration makes, as well as the rights of private entrepreneurs to be invited and be able to participate in Board meetings if the administration plans to make decisions that will affect the entrepreneur’s business. Decisions made by the port’s administration need to be supervised by the courts, because current regulations provide the control of the Administrative Court for only some of the decisions. Port administration’s decisions in regard to signing contracts to allow entrepreneurs to have a business at the port – which is property of the municipality – should be based on equal opportunities for all entrepreneurs to be able to work at the port. Such decisions are to be considered as administrative acts or actual conduct. It should be defined in the law that decisions of the port’s Board in regard to contract signing, refusal to sign contracts and early termination of a contract can be appealed at an Administrative Court following the necessary legal procedures.

Ports need to allow equal access to their infrastructures for all entrepreneurs. All businessmen should have equal rights to work at ports.

Following RP’s success in progressing port management system reforms, the World Bank is carrying out an evaluation of the quality of Latvian ports. The party is also preparing legislative initiatives in this industry.

BNN previously reported that the State Audit (SA) has recently performed an inspection at RFP in order to determine whether the port administration’s activities for the 2009-2011 period complied with regulations.

A total of 595 thousand LVL of funds belonging to RFPA have been illegally spent on bonuses, gifts and health insurance of Board members. They are also said to have wrongly calculated benefits, holiday payments and sick-leave certificates.

Regulations state – goals are to be achieved using the least possible amount of financial resources. However, when presenting entrepreneurs 1.08 million LVL for docking maintenance fees, RFPA had not determined the actual amount of money entrepreneurs had invested in accordance with their contracts.

The port has spent 145 thousand LVL on donations that do not comply with rules regarding financial squandering prevention acts. 745 thousand LVL were spent on natural and legal persons’ agreements for financial support as if signing contracts for purchasing advertisement services. Even though the procurement of such services was not planned, it was never coordinated and its possible effect on improving the port’s services and cargo handling was not evaluated.

The port administration’s illogical decisions and employees’ reluctance to complete their duties has resulted in losses worth at least 403 thousand LVL. Funds were spent on repairs of Varma icebreaker (354 thousand LVL), instead of investing them in the base capital of the ship.

Without following regulations the administration of the port relieved cruise ships from having to pay sanitation fees, losing a potential amount of 2.08 million LVL as a result. The administration also did not use the funds provided by tug boat lease in order to collect rent fees of 501 thousand LVL. It also failed to take action to return debts for a total amount of 124 thousand LVL.

Ref: 102.109.109.6717


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