The Baltic Course

Gates to the world

By Olga Pavuk

Riga Free Port manager, Leonid Loginov, is certain that God favored Riga when he placed the city and its port at the crossroads of transportation routes

Mr. Loginov, what place does the Riga port hold in the economy of Latvia and its capital city?

According to an ancient story, the gates of port in any country or city are gates to the world. Riga port is one of the key ports in the Baltics, located in a very convenient geographic position on cargo transportation routes. The port plays a very important role not only for our city but also for the entire country as transit and cargo transportation is one of the most successful businesses in Latvia. A port also represents the potential for production, something we intend to develop both in Ventspils and Riga. To start the business right, one should choose the right location. In the end it is bound to bring good profit.

Some facts
Riga port has 114 piers where 39 stevedore companies offer their services. The port's total area of 7,337.7 ha accommodates over 160 firms. Key cargoes handled at the port are containers, mineral fertilizers, timber, oil products, ferrous and non-ferrous metals, as well as perishables. Maximum draught at piers is 12 meters, and the port can serve ships up to 225 meters in length. Outdoor storage of cargo covers 1,780,000 square meters of the port's territory, and closed warehouse storage 180,000 square meters. The ports annual capacity is 20 million tons. In 2001 cargo turnover reached 14.88 million tons, up 11 percent year-on-year.

God favored Riga when he placed the city and its port at the crossroads of transportation routes. Riga city celebrated its 800th anniversary last year, but the port toasted the same anniversary a year earlier. Vikings and crusaders used to carry their goods to Asia by rivers, using also the River Daugava. Asian goods destined for Europe moved along rivers through the Baltic Sea. Now there are plans to bring this project back to life again. The interested parties include not only Latvia, Belarus, Ukraine and Russia but also China. Latvia's ports of Ventspils and Liepaja on the western coast have no use for celebrating this project, as the River Daugava enters the Baltic sea in Riga. Distribution and reloading centers to transfer cargo from river transport to sea-going and ocean vessels will definitely be set up in Riga. But I do not rule out the possibility of cargo flow being large enough to give some additional work also to Ventspils and Liepaja. Our ports are not really that far apart.

Long ago Europe reached the conclusion that, whatever the costs, one should try to transport cargo by water out of both environmental and security considerations. Europeans are digging channels specifically to deliver cargo to sea ports by water. In our case the Daugava-Dnieper route is far shorter than the long-way round to Asia. Many think of this project as absurd. But I feel optimistic about it and tell my opponents that one hundred years ago nobody dreamed of flying to space, and 15 years ago neither me, nor you thought that Latvia may one day be independent again. Anything can happen in life. People driving progress are noble people.

What opportunities does the port offer to investors as a free zone?

Free zone means first of all tax exemptions. There are profit tax exemptions available on certain investment conditions. As a customs zone the Riga free port is exempt from import taxes, value-added tax and real-estate tax. Our main ports - Ventspils and Riga -are both mostly transit ports. A free port has the advantage of tax-free construction for piers, terminals and dredging. This allows for a 40 percent reduction of costs. Of course, plants of other profile can also be built at the port. But the port philosophy is based on reloading cargo.

Tell us about the most important projects at the port of Riga.

A new project for the construction of a chemical plant at the port is a brilliant idea. I do not know if it will come true. It would be a modern facility processing the raw material - natural gas - into ammonium and fertilizers. There would be no need to spend huge amounts of money on transporting products to the port. The Uks Oil company is working on this project. A similar plant is being built near St.Petersburg but the Russian city receives gas from a storage facility in Latvia, and it will also cost to transport these products further to the port. I do not think that any foreigners will try to slow our project. In all probability opposition would be from local businessmen in Liepaja and Ventspils. The key argument in our favor is the gas storage facility close by at Incukalns. For Ventspils a branch off the mains would have to be built but Liepaja cannot take on vessels large-enough. To find the money is no problem if the project has great prospects.

As for the construction of an oil product terminal by Baltic Oil Terminal at the port, we never care as to who the terminal's owner is. This is none of our business. What matters is that the business is legitimate. The company has a leasehold for an area within the port's territory. This is where our interests lies. Some 40 percent of the port's territory has not been developed, but with the new areas in Spilve joining the port, as much as 70 percent of our territory is unused. We offer anybody interested to lease land and put up their own terminals. The rent is miserably low on around USD 0.20 per square meter annually.

What is the port doing to make Riga attractive for sea-faring passengers?

We have a lot of problems related to this issue. From year to year the Latvian government somehow keeps failing to address it. These things are not for the port to deal with. The state must provide financial support for the development of passenger flow by sea. Long-term state and municipal programs are required for this purpose.

What is the main problem troubling the head of port Riga?

I do not think we have problems. But I would wish that local politicians fought less between themselves and gave more thought to the ways of achieving consolidation, to develop the country, to move ahead of the Estonians, Lithuanians and Finns.

What other novelties does the port offer to its clients?

The new law on free ports. New undeveloped land. A Dutch company, TEBODIN, is now working on the Riga port development plan till 2010 for us. This year we have already done more work on development than earlier planned. Today we want to move cargo from the central part of the city further out to the mouth of the river so that ships don't have to sail 13 kilometers upstream to the port, as it makes navigation difficult.

We extend our love and respect to all clients.

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