An exclusive interview of the Senior editor of Pirmais Biznesa radio (First Business Radio) in Riga, Latvia Mr. Aris Jansons
- Which effect may have the refusal of the Russia’s Transneft from the use of Latvian and other Baltic ports in favor of Russian ones?
In fact, Latvia has long been aware of Russia’s plans to develop own ports; it was only logical that Russia wanted to re-direct its cargos to those recently built ports in order to get maximum return on its investments. Russian Ambassador to Latvia Alexander Veshnyakov has remarked that "goods and cargos go where there is a favorable economic and political atmosphere,” in an apparent hint that criticism of Russian military aggression in Ukraine would see a drop in transit cargo volumes through Latvian ports.
The major transit sea-port city of Ventspils has evidently tied its hopes with the pipeline, which goes from Belarus to Ventspils, however they have to count with the fact that the pipeline contains Russian oil. No wonder that sharp political battle has unfolded in Latvia around the transit situation. The influential city mayor of Ventspils Aivars Lembergs has criticized the Americans and the Europeans for their obedience to Washington that prevents developing business. After all, the total turnover of Latvian ports has dropped to 20 per cent, which reduced revenues to the state budget by ten per cent.
According to Andris Ameriks, the board chairman of the Riga Free Port, the freight turnover at the Riga Free Port has decreased by 14 per cent and the yearly fall in freight volume could reach 10-12 per cent. It's a given that the sanctions against Russia are affecting the flow of goods, but at the same time no such fall has been observed at Klaipeda port of neighbouring Lithuania. Riga Free Port authorities have admitted that there is a need for changing tariffs to more competitive ones and the port could lower expenditures by cutting investments into resource-hungry projects, for instance, that of deepening the port's basin.
In his turn, the head of Latvian Railways Edvins Berzins has admitted that the Transneft announcement is no surprise as Russia has been making heavy investments into its ports for several years now. Latvian Railways have been reckoning with a year-by-year decrease in volume of shipments which could decrease by 10 million tons due to the Transneft’s move. At the same time Latvian Railways is hoping that the volume of total transit shipments served by the company might not decrease as they can be replaced with others.
Latvian Railways is currently eyeing other partners - China, Kazakhstan, and Belarus - and has already struck up agreements with Kazakhstan and Belarus over tariffs for transit cargo. The first test cargo train from China is expected to arrive still this year, possibly during the forthcoming visit of China's Prime Minister Li Keqiang in early November.
- What is the progress of the European railway Rail Baltica project accomplishment?
Agreement on financing and implementation of the Rail Baltica railroad project has been reached and was signed on 30 September.
On 7 September this year the three Baltic states agreed on the procurement model and responsibilities in moving the Rail Baltica project, the European-gauge railroad project which envisages a continuous rail link from Tallinn (Estonia) to Warsaw (Poland), going via Riga (Latvia) and Kaunas (Lithuania). A good compromise that did not come easily, as MEP Roberts Zile put it. With the project falling behind schedule and disagreement on major decisions about contracts, the whole project could collapse if the frustrated European Union (EU) withdraws funding. The disagreement concerned rules of making contracts for things like station and terminal designs and construction, which are now likely to be awarded to local companies in each country.
Although the project is given the name of the Baltic Railway and it is meant to be a great joint project with enormous importance, for each Baltic country the importance of this project is different. For Lithuania it is less important because it already has a railway section from Kaunas to the Polish border, it remains only to connect it to the EU's signaling system required that trains could run at speeds up to 160 kilometers per hour. As Lithuanians feel an advantageous position, they were trying to work in a public procurement procedure separately from the joint venture.
Rail Baltics is a highly political infrastructure project, which must certify the high-speed railway connectivity with the outermost periphery of the EU, which the Baltic area geographically is. The Baltic route should be completed by 2025; the link to Warsaw by 2030. By 2020, the three Baltic states will receive a total of 442.2 million euros for the Rail Baltica project, with the total cost of the project at 5 billion euros. Of the total cost, 85 per cent will come from the EU and 15 per cent from the member states involved. With the total amount of the EU funding for each Baltic country close to a billion of euros, the three countries have realized it would be foolish to abandon the project or lose it due to some sort of disagreement.
The Rail Baltica high-speed railway will pay for itself as concerns both passenger and cargo transit, according to the verdict of international companies that reviewed the potential economic returns of the rail line.
- How does Latvia participate in the North-South project "Intersea"?
Latvia belongs to the countries which were represented at the Dubrovnik summit in the ministerial and vice-ministerial level, and it highlights the current level of interest of this Baltic country in the Intermaria (or Intersea) partnership project. By the way, back in the 1920's, the inter-war Latvia was not either much enthusiastic about the Międzymorze (Latin: Intermaria) plan, pursued after World War I by Polish leader Józef Piłsudski, for a federation of Central and Eastern European countries.
However, the priority cooperation areas, such as energy, transport and telecommunications, are among those whose development is essential for Latvia. Though, in circumstances when the three Baltic states have delayed the time for the implementation of their own Rail Baltica project, the subject-matter of how to ensure the linking of the Baltic countries with the Black Sea and the Adriatic countries to faster goods has remained in the background.
In fact, Latvia has failed to get rid of largely mentioned Russia's influence in the energy sector due to corrupt officials or internal lobbying (especially due to the impact of Russia’s Gazprom monopoly), and Riga can not stand out with some kind of bright initiatives in the energy segment.
Unlike Lithuania, Latvia does not possess its own liquefied gas reception terminal and can not be proud of positive experience in the increase of energy independence from Russia. Unlike Lithuania and Estonia, Latvia does not have effective power interconnections with the Scandinavian or Eastern European partners. By contrast, in the transit corridor issues Latvia has so far mostly focused on the East and in recent years nothing much has changed in this way of thinking.
It seems that the Latvian leadership perceives the "Three Sea initiative" rather as a new format of increased cooperation between the Central and Southeast European member-states of the European Union, which it has been watching almost as an aside stagnant viewer. By the way, the fact that only part of the region’s top leaders was present in Dubrovnik pointed out to the attitude of the rest national governments towards this initiative.
The recent forum clearly demonstrated what the project’s ‘locomotive’ Poland included in the Intermaria concept; until the next summit in Wroclaw in June 2017, Latvia has the time to comprehend how it would be able to integrate further into this initiative.
Latvia remains sceptical regarding the question whether an anti-imperical pact could be built on the bases of the Intermaria which could include those countries of Europe which are ready to commit to some degree of military and other cooperation in confronting Moscow. In Riga there is no much enthusiasm about a new limited and single-purpose defense treaty of a group of countries ready to assist each other against hybrid warfare conducted by foreign powers against them. Latvia has not been striving to a new defence coalition of non-nuclear states located between NATO’s founding countries and Russia, relying on the existing model of NATO and Transatlantic relationship. The more so as no concrete proposal was reached in Dubrovnik on the retaliation of any kind of the Russian aggression in Eastern Europe.
Today it seems that official Riga does not believe in long-term viability and effective delivery of this new partnership format.