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Matīss: LDz cannot raise tariffs and perform rail electrification under cargo anti-record

Anrijs Matīss/flickr.com/airport riga.
Because Latvijas dzelzceļš has set an anti-record in cargo transports in the first ten months of this year, Saeima deputy and member of the National Economy Committee Anrijs Matīss says raising the fee for the use of infrastructure cannot be allowed. He adds that the intended railway electrification project should be considered very carefully.

According to him LDz should drop generous advertisement and sponsoring contracts, as well as perform internal reformation.

Warnings about the dramatic situation with railway cargo transports were first voiced in summer. LDz, however, continued using status policy and reported on supposed cargo volume increase in spite of experiencing serious declines in summer months. In October, low cargo indexes could no longer sustain major cargo declines, and statistical information finally revealed the downward-spiralling tendency.

In the first ten months of 2017, LDz handled only 36 million tonnes of cargoes, which is the lowest index in the past decade. More than 40,000 tonnes of cargoes were carried by rail before the month of October. In 2012, this volume was 51 million tonnes. The situation keeps getting worse.

Matīss believes that increasing infrastructure fees in such a situation would be a short-sighted and irresponsible decision, one that would make Latvia the country with the most expensive railway infrastructure in the European Union. «It would not improve competitiveness, and cargo decline would continue. Raising prices under declining turnover would be madness,» said the Saeima deputy.

After meeting businessmen and officials in neighbouring countries, Matīss mentioned Latvia’s railway tariff matter as the main topic for criticisms. «Raising tariffs would be unacceptable in this situation,» says Matīss.

According to him, LDz should instead consider making internal processes more efficient and reviewing marketing and other associated activities, because it is no longer possible to continue financing them in same amounts as before. He also adds that it is necessary to review management systems by making them more optimized. «We cannot continue handling cargoes using outdated methods and such a large number employees as before,» says the parliamentary committee’s representative, adding that the increase of tariffs would cause cargo volumes to go down even more.

In this situation, according to Matīss, it would be best to reconsider railway electrification as well. «We may have to pick a different project to invest money, because the electrification project was previously intended for 60 million tonnes. There is no economic justification established for this project. In the end, LDz cannot return the borrowed funds. This responsibility will fall on the shoulders of cargo owners and state budget,» says Matīss.

He recommends the ministry and the government to search for alternative solutions for investment of EU funds.


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