Analytics, Financial Services, Latvia, Transport

Earlier this week, Rigas Satiksme acting CEO Anrijs Matiss said publicly that the city council should allocate at least EUR 130 mln for Rigas Satiksme in its budget. Last year, Rigas Satiksme received EUR 122 mln in municipal subsidy, which according to the company’s new management, is not sufficient to cover the real costs.

Rigas Satiksme closed 2018 with a EUR 6.3 mln loss.

On Thursday, Matiss considered resigning as Rigas Satiksme head but after a meeting with Usakovs, who holds the transport company’s shares on behalf of the local authority, he changed his mind.

At the same time Matiss made no secret that the situation in the company was “very sad”. “The EUR 130 subsidy is the necessary minimum. In addition to that, we have an agreement with Rigas Mikroautobusu Satiksme [minibus operator], which causes us an additional loss of EUR 6 mln a year,” Matiss said.

However, Matiss rejected speculations about a possible fare hike in Riga’s public transport.

Matiss was appointed Rigas Satiksme acting CEO on December 13, 2018 after the company’s previous head Leons Bemhens was detained as part of a criminal investigation into Rigas Satiksme’s allegedly corruptive procurement deals.

After taking the helm of Rigas Satiksme, Matiss ordered an audit, which revealed that about EUR 6 mln have been overpaid in a fuel procurement with a company whose owners are hidden in offshores. The loan granted for purchase of trams has been spent on wages. 40% of money collected from fares have been spent on wages. Matiss is not yet ready to publish the auditors’ findings yet, but plans to initiate a number of court proceedings based on these facts.