Latvia, Railways, Transport
International Internet Magazine. Baltic States news & analytics
Friday, 26.04.2024, 22:20
The management of SJSC (VAS) Latvijas dzelzceļš has asked to evaluate the activity of the Minister of Transport in the interest of private companies
A letter was sent to the Prosecutor General
of the Republic of Latvia, Corruption Prevention and Combating Bureau, National
Security Committee of the Saeima (Parliament), as well as the Prime Minister
Krišjānis Kariņš, and the State Chancellery.
When
evaluating the available information and former actions of the Minister, the
management of LDz believes that the value of the company is being deliberately
reduced with a purpose to achieve its privatisation. At the same time, the
attention of the law enforcement authorities is called towards systematic
failure to comply with the governance guidelines for the state capital
companies set out by the Organisation for Economic Co-operation and Development
which is manifested as influence on the Council of LDz and not taking it into
account when making decisions and not involving it into communication with the
management of LDz.
“Public
statements regarding possible participation of the company and its management
in corrupt transactions create an adverse influence not only on the company
which is significant to the national economy, but also to the reputation of the
country in general. Such unjustified statements, even if based on deliberately
false information provided to the Minister of Transport by the third parties,
affects the creditworthiness of LDz and the conditions of financial
obligations; these statements harm relationships with the partners and
customers,” says the Chairman of the Board of LDz Edvīns Bērziņš.
By sending
the letter to the law enforcement authorities, as well as the governmental
officials, the management of LDz asks to evaluate the actions by the Minister
of Transport aimed at influencing the Council of LDz with a purpose to achieve
dismissal of the Chairman and two Members of the Board of LDz, to evaluate the
possible involvement of Mr Linkaits in corruptive actions while lobbying the
interests of JSC (AS) Baltijas ekspresis, and other matters. At the same time
request has been made to stop the activity of Mr Linkaits and to mitigate the
adverse consequences that are already caused and endanger not only the activity
of LDz, but also participation of Latvia in OECD.
LDz has
calculated the possible risks that can be caused by such statements of the
Minister: existing and potential loan agreements with the banks are endangered;
due to mistrust by banks disbursement of salaries is subject to risk, threat to
implementation of railway network electrification project and projects financed
by the European Union, decrease in the number of foreign customers, and thus
also rapid loss of freight volume which will in turn have negative consequences
not only for the financial performance of the company, but also the growth of
the national economy in general.
Thanks to
purposeful work and measures to increase efficiency, LDz has continued a stable
financial activity, as well as has been able to increase remuneration to
employees by 5% without increasing the payment for services as provided by the
agreement with the trade union of Latvian railway workers and transport
industry.
Already in
2018, LDz showed the best performance of economic activity within the last
three years, and the trend has continued in the first quarter of 2019. Even
though due to objective reasons the volume of transported cargo slightly lags
behind from the indicators of the first quarter of the previous year, a
significant increase can be observed in separate freight segments. The first
quarter of 2019 in comparison with the same period of the previous year has
seen an increase of 30.3% in transport of chemical cargo, and the volume of
transported timber has increased by 48.0% as well. The largest part of
transported freight or 46.2% is still formed by coal, and this volume has
increased by 9.8% in comparison with the respective period of the last year.
The total
volume of freight transported during the first quarter by using the
infrastructure of LDz was 11.6 million tonnes. Net turnover of the first
quarter is 51.3 million euro, but profit after taxes – 3 million euro,
demonstrating provision of a stable financial activity. The projected freight
turnover of this year still remains at 47-49 million tonnes.
The SJSC
(VAS) Latvijas dzelzceļš is a public-use railway infrastructure
manager and the leading company of the Group of Companies Latvijas
dzelzceļš. The group of companies includes six subsidiaries: JSC
(AS) LatRailNet, which determines the infrastructure charge
and distributes the railway infrastructure capacity; LLC (SIA) LDZ
CARGO, which ensures rail freight transport and international passenger
transport; infrastructure construction and maintenance company LLC (SIA) LDZ infrastruktūra; rolling stock repair and maintenance company
LLC (SIA) LDZ ritošā sastāva serviss; security company LLC (SIA) LDZ apsardze, as well as logistics company LLC (SIA) LDZ
Loģistika.