EU – Baltic States, Financial Services, Funds, Latvia, Legislation, Port, Transport

Assistant state auditor Zane Svagere said that the State Audit Office had audited the Freeport of Riga's compliance with laws, effectiveness and cost efficiency as it managed the infrastructure development project in Krievu Sala and identified not only various violations, but also lack of professionalism.

"As a result, the Freeport of Riga incurred additional costs worth more than EUR 3 million. Moreover, the project will not achieve its original goal defined in the funding application to the EU – to move all port operations away from the city center," Svagere said, adding that this may lead to the loss of all EUR 77.2 million allocated to the project by the EU. These would be a sizable loss to the Freeport of Riga, which the port might not be able to cover on its own. The state auditors have concluded that the risk of losing the EU funding will continue until 2019 when the European Commission is due to analyze the project's performance and costs.

"The Krievu Sala project has been on the Freeport of Riga's agenda since already 2006 when the board decided to use the undeveloped territories in Krievu Sala for the port's needs and started planning works, projecting to complete the construction phase by the end of 2012. Yet until 2014 the project's implementation was slow and unprofessionally managed," said Latvian State Auditor Elita Krumina.

The development of the infrastructure project in the territory of Krievu Sala in Riga port was officially completed on November 16, 2015. Four wharfs have been built in Krievu Sala for reloading bulk cargos as part of the project. The total length of the wharfs is 1,180 meters and the depth of the water by the wharfs is 15.5 meters. Also all the necessary access roads, railway links and engineering communications have been provided in this territory. The total capacity of the Krievu Sala project is 20 million tons of bulk cargo a year.

The implementation of the Krievu Sala infrastructure development project started in 2006. This project is one of the largest infrastructure objects in Latvia which has cost 133.65 million euros. Of this amount, funding from the EU Cohesion Fund is expected to reach up to 77.19 million euros, and the Freeport of Riga's co-funding (loaned by Nordea Bank and Pohjola Bank) at 56.46 million euros.