The Baltic Course  

Moscow and Riga making friends - On economical terms.

Olga Pavuk and Mikhail Tuzhikov, Transport Rossii

In just two days of his visit to Riga, the mayor of Moscow, Yuri Luzhkov, and delegation, managed to visit the Riga port, the city's railcar factory, the Moscow Centre of Culture and Business (currently, under reconstruction), the Lido restaurant complex, participate in numerous negotiations and even meet Guntis Ulmanis, the Latvian ex-President, for a game of tennis

A visit by Mr. Luzhkov to Riga Railcar factory ended with the signing of a cooperational agreement.

Photo: Business&Baltiya

The 49 members of the Moscow delegation, over 60 accredited Latvian journalists, and an extremely saturated agenda of the visit was proof of the importance of the issues addressed by the mayor of Moscow. The dignitary guest from Moscow was warmly welcomed by the Latvian public and business community, who applied maximum effort in order to break the decades-old ice of mutual alienation. The Moscow mayor had the following to say on this matter: “When it comes to cooperation between two capitals, it has a rather strong effect on the level of cooperation between the two countries. The size of the Moscow delegation proves that we have prepared important documents on the development of economical, trade and transport connections.” 

However, when speaking on the visit of Yuri Luzhkov to Riga and the prospective thaw in the Latvian-Russian relationships, Latvian politologists agree that the visit was ignored by Latvian government officials, therefore there is more ice left to break. 


United by a common power network

The first section of the agenda – the visit to the Riga Railcar Factory – already led to the signing of a protocol on cooperation.

The Riga Railcar Factory (RVR – Rigas vagonbuves rupnica) was established in 1895. Back then, known by the name of Fenikss, the factory specialized in manufacturing passenger coaches and freight cars, as well as loading platforms. Since the Thirties of the 20th century, the RVR (then named the Vairogs) started manufacturing Ford automobiles. In the Soviet times, the factory produced 20,347 electrical railcars, as well as 1,934 diesel-powered and 7,744 tramcars. The recent history of the factory is built on the establishment of joint-stock company Rigas Vagonbuves Rupnica (RVR) on January 10, 2001. This enterprise has inherited the unique experience, extensive production foundation and original engineering solutions of its predecessors. 

On November 8, the Chief Executive of the Moscow Authority for Transport and Communications, Alexander Belyaev, and his colleague of the Communications Department of the Riga City Council, Ivars Zarumba, signed a protocol on cooperation in the modernisation and supply of spare parts to the Moscow city tram fleet. According to this document, 185 “Tatra T-3” tramcars will be overhauled at RVR. The total value of this commission amounts to around 10 million US dollars. The Moscow mayor underlined that the Moscow tram fleet includes more than 500 units, which all need reconstruction, thus giving ground for starting an extensive project and creating new jobs both in Riga and Moscow. 

The general director of RVR, Lazars Raizbergs, while presenting Luzhkov a gift souvenir – an exquisite model of locomotive engine, said: “In spite of the bad weather in Riga today, the sky is clear here at the factory. We know what we will do tomorrow. We know where we are heading and what our are tasks!” 

The general director of Russia’s Industrial Investment Agency, Vladimir Kochubey, invited the audience to pay attention to another perspective direction for future cooperation: “RVR and our agency are currently working on a design of a low-deck tramcar. The Riga City Council has already invested 2 million US dollars in this project. The financial contribution of the Moscow partners is the income from repairs of their old tramcars. If the project is completed in due time – by 2004, we will be able to take advantage of brilliant future prospects and RVR can plan on receiving orders to manufacture these novelties both for both Moscow and Riga tram fleets. Besides, the Riga car builders can count on participation in product development and the manufacturing of rolling stock of a new and perspective type of transport, conceived for introduction in the Russian capital – the monorail tram.”


Latvian cuisine in Russian capital

For decades, people in Moscow have been familiar with Latvian canned fish and meat products, delicious cheese, confectionery and, of course, Riga Black Balsam herbal bitter. Therefore, at the international food expo, Food 2002, which took place in Riga last October, the Moscow administration was represented by the manager of the Authority for Food Trade Organisation and Coordination of the Department of the Consumer Market and Services, Valery Shatilov. According to him, Moscow is of interest for not only Latvian businessmen, but also for Lithuanian, Belarus and Ukrainian entrepreneurs, and it is easier to meet them all in Riga. Concerning Latvian products, these are but few of the items, which are of interest to consumers in Moscow: the famous Riga Sprats produced by Brivais Vilnis, the kids yoghurt made by Vamieras Piens, the produce made by meat packers MVA and Galas Nams and also Langa wrappings. According to Shatilov, negotiations on renting retail space at the Riga Central market are being held, where Latvian consumers could purchase the long-familiar brands of Moscow products, such as the Zolotoy Yarlik cocoa, Krasnii Oktyabr sweets and others. 

The Moscow mayor seemed to take a fancy of the Riga fast food restaurant chain Lido. The owner of the chain, Gunars Kirsons, was offered to open several similar restaurants in Moscow. The Moscow City Council is ready to invest its own means in building a public catering complex offering Latvian cuisine and co-managed by Latvian specialists. At the press conference, Yuri Luzhkov said, that the building costs of such a complex would amount “to several millions of US dollars”, nevertheless, the Moscow City Council could still implement this project. According to him, there are two or three places in Moscow, where such a complex could be built. Luzkhov thinks, that in some time the management of this complex could be taken over by the Moscow staff alone. Just after this visit by the Moscow mayor, the vice-president of Lido, Vilnis Cirulis, told the news agency BNS that the company is delighted in hearing such an offer for it is a great honour, still there is nothing certain yet – no terms or volumes have yet been discussed.


A Moscow house in Riga

Yuri Luzhkov also visited the building of the Moscow Culture and Business Centre (a former recreation centre for Latvian railway workers in central Riga), which is currently under reconstruction, and came to the conclusion that this building lacks charm. According to Luzhkov, for now, the Moscow delegation has several objections concerning the outer appearance of the building. The Riga mayor, Gundars Bojars, had the following to say on this matter: “The project is not bad at all, still there are some improvements to be made.” 

As announced previously, the Moscow centre in Riga is intended as a multi-functional complex, where there would be a library, cinema and concert hall, business centre, tourism promotion office, centre of Russian culture, as well as legal and medical services. The Moscow City Council acquired this building last year in an exchange deal by offering the administration of Latvijas Dzelzcels (Latvian Railway) an equivalent building in the Russian capital city for its Moscow office.


Other contacts

All the following meetings by the Moscow mayor in Riga were also of constructive manner:

A bilateral workgroup for cooperation with the Riga Free Port was created. The Jelgava city mayor, Andris Ravins, was offered to set up an assembly line at the RAF vehicle plant for production of the popular Bichok vans  (ЗИЛ-5301) with economical diesel engines, which correspond to Euro-2 standards and cost considerably less than the Western analogues. The Traffic Management Directorate of the Moscow City Council and the Riga-based company Nordeka agreed on opening a new Moscow–Riga bus route with the fare being three times lower than travelling by railway. The prefect of the South-West Administrative district of Moscow, Valery Vinogradov, and the Chairman of the Jurmala City Council, Dainis Urbanovics, signed a non-binding agreement on cooperation in education, culture, environmental protection, investment and economic development with the aim of opening an Information centre in Southwest Moscow for solving matters of cooperation with Russian travel agencies, as well as purchasing the Dzintars spa house in sea-side Majori for recreation and medical care of World War II veterans. The mayors of Latvian cities Ventspils, Daugavpils, Rezekne, Jurmala, Liepaja, Jelgava and Valmiera were invited to visit Moscow in May 2003 for solving the issues concerning further cooperation, meeting the Moscow business circles and generating new projects.


In spite of the extremely saturated agenda of the dignitary guest from Moscow, the BK managed to ask Luzhkov several questions.

Why did Russian transportation specialists eventually chose Latvian railcar builders?

For years, we have been working on settling our cooperation that was interrupted 11 years ago. We consider the situation abnormal due to the fact that for years, we used to solved similar problems and help each other, but now, we pretend not to know each other. In the Soviet times, we had common standards, a common power industry system and analogue requirements for power supply networks. Technologies adapted to our requirements remain still today at RVR. Therefore, I think that the population of Moscow will be active consumers of the Riga Railcar factory. 

Cooperating with Riga Railcar factory, we solve two problems. The first: the commission of Moscow for reconstruction of the power supply system for tramcars. We have ascertained that the technical solutions, implemented by RVR and tested in Riga, have proved to be effective – therefore we commissioned the same job to be done in Moscow. And the second: the design of a low-deck tramcar, which is a step in the future. This equipment will undoubtedly be competitive with other companies and firms manufacturing railcars. Such cooperation and relationships are our target.

Russian ports call the Baltics a window to Europe, but Murmansk – a window to the world. Hasn’t this Baltic window changed into merely a ventilation pane lately due to the decrease in cargo flow?

We paid great attention to the issues concerning the operation of the Port of Riga and the offers Moscow could propose, implementing its practical interest in acquiring a huge amount of goods, foodstuff and other kinds of transit cargo in the Port of Riga. It must be taken into account that Moscow holds 40% of the total Russian wholesale market and 30% of the retail market. Moscow consumes 267,000 tons of foodstuff daily. Much of it is purchased abroad, and it must all be transported to Moscow. On a map of the operator in the Riga Port, there is a violet spot in the place where Moscow should be. This is due to Moscow being the crossroads of routes from Japan, India, the Baltics and other countries. We are interested in stable cargo flow regardless of the fact whether goods are transported into Moscow or out of it – money still stays in Moscow. Riga is one of the best routes for cargo transportation.

Summarising the visit to Riga, Yuri Luzhkov said: “I’m satisfied with the outcome of the visit. It is not normal that two such cities as Riga and Moscow, which have cooperated for centuries, have such artificial, intense and cold relationships. Gundars Bojars and I decided to thaw this situation. I can say that for us, it was a bit strange to see the reaction of regular people on the streets when meeting them. They are friendly, warm-hearted, smiling – that proves that in the Latvian society, there is a transition from the decade-long “refrigerator” period to a serious “warming”. The Moscow mayor promised to visit us again next year.