MP Edgars Tavars: Saeima MPs basically voted for the destruction of the ports of Riga and Ventspils

"Have the pushers of the amendments to the Law on Ports made any economic calculations - what benefits will these amendments bring to the citizens and the country as a whole? What is your business plan? The answer was: we don't have a plan. But it will be better! For whom and what will be better? The Corruption Prevention and Combating Bureau could answer these questions," says Edgars Tavars (ZZS) in a bitter irony, analyzing the amendments to the Law on Ports. Today we have a conversation with Edgars Tavars.

The situation now: President Levits has suspended the publication of the amendments to the Law on Ports adopted by the Saeima for two months, on the basis of Article 72 of the Constitution and following a request submitted by 36 Members of the Saeima on February 18. The amendments have been suspended, but problems remain.

Saeima adopted amendments to the Law on Ports. Many argue that ports are being destroyed with this. What do these amendments actually mean?

They mean that 42.37% of the territory of the city of Ventspils (almost 2500 hectares) and over 1900 hectares of the territory of Riga will be transferred to a state capital company without any compensation. In the past, ports were derived public entities - specific public administrations in which both the state and the municipality concerned participated as equal partners, with the aim not only of making a profit and providing services to port operators but also - and more importantly - of creating the infrastructure for ports to develop so that the citizens who live in these port towns also benefit from the ports.

At the moment, in a seemingly innocent reform, all the property is being transferred to the state, while the port cities are being offered the rights of minority shareholders. From now on, the ports will operate as merchants with the sole aim of making a profit. In addition, the newly created port authorities will compete with the companies to which they have been providing their services. Even if these profits were to emerge, neither the citizens of Riga nor the citizens of Ventspils will benefit as they have done so far.

For many years, it was many millions of euros that benefited the inhabitants of the port cities - in various projects, in environmental and infrastructure improvements, in building development, in welfare, in the financing of cultural events.

Now it will be the case that the port will be managed not by the city together with the state - on equal terms, as has always been the case - but only by the state in the person of a few ministries, among which the Ministry of Transport will play a key role. In the past, environmental and transit aspects, as well as economics and finance, were important, and all these were analyzed and managed by the relevant ministries together with the municipality. Now everything will be primarily under the control of the Ministry of Transport.

We can already see that since 2019, when the Ministry of Transport, under the control of the New Conservative Party (Jaunā konservatīvā partija, JKP), with its company JSC Ventas osta, has managed the port of Ventspils, it has completely pushed the city of Ventspils out of port management, and we can see that the financial indicators are constantly falling. We also see the performance of the port of Riga after the real work of the JKP and the government - the figures there are also falling.

At the moment, there is only one line in the law: ports cannot be privatized. But all that remains is to convene an extraordinary session of the Saeima and remove this line from the law in two readings. At a time when economic indicators are falling, when transit in Latvia has come to a complete standstill and no alternative has been created, the valuation of ports will be low, so there is now a high risk that ports will be privatized for a pittance.

In the case of Ventspils, this is a disaster: almost 2500 hectares of port area, which is almost half of the city's territory, is being taken away from the city.

The letter sent by the Ventspils City Council to the Saeima states, and I quote: "On February 9, 2022, in the TV24 program 'Ziņu TOP', in the segment 'Ventspils: the Law on Ports violates the right of the local community to use its own property', the head of the Saeima Economic, Agricultural, Environmental and Regional Policy Committee, K. Feldmans, stated that the above-mentioned decision of the Ventspils City Council was untrue, as the Ventspils City Council would not be restricted from using its own property, while explaining that a simple port management reform was taking place. Please note that Feldmans is misleading the entire Latvian society, as the draft law transfers the municipality's property to a capital company for compulsory possession and gratuitous use, which is not comparable to the activities of the current Ventspils Freeport Authority as a derived public person and also a public administration body."

I would add that the value of the property (including land) that is taken away is around €150 million. Until 2019, Ventspils developed the port, created infrastructure and jobs, created conditions for investors to come and use the port's potential. But now it will all go to a state-owned company and - if by some miracle it makes a profit - Ventspils may not be able to count on these funds.

For a short time, the citizens will still get 10% of the port fees. As I was elected in the Riga area, I sent a question to the Riga City Council about how much the city gets from the port. It is between €2.5 million and €4 million a year. However, during the debate in the Saeima, the coalition MPs, responding to the call by Mārtiņš Bondars (A/Par), made it clear that this should be discussed at some point in the future, and they also hope to abolish this fee for the port cities.

Somehow I cannot see the rational grain in all these actions...

At the moment, given the value of the two ports, there is talk of investing more than half a billion euros in the capital companies of Riga and Ventspils, and if the municipalities are still involved, the investment could approach one billion euros. I asked in the Saeima: have the pushers of the amendments to the Law on Ports made any economic calculations - what benefits will these amendments bring to the citizens and the country as a whole? What is your business plan? The answer was: we don't have a plan. But it will be better! I asked if the Riga City Council had been consulted? Is there a decision from the City Council? They said there's no need for that. I guess that there have been some behind-the-scenes negotiations within the ruling coalition.

For whom and what will be better?

To answer these questions, the Corruption Prevention and Combating Bureau should start working... When ports are privatized, we will see the true beneficiaries. And it is not a given that these beneficiaries will be interested in developing the ports; perhaps they will find it more profitable to degrade them. If, for example, I had unlimited money as the owner of other ports, I would buy the ports of Riga and Ventspils and quickly close them down so that I would have no competitors. It is similar to the Latvian sugar industry, which was destroyed so that the EU sugar industry could produce its own sugar and supply us with it.

So what is all this that is being launched against the ports? Is it malice or stupidity?

I cannot say anything categorically, but the intensity with which these amendments to the law have been pushed through has led me to believe that this is an abuse of our country's economy and society. If there are to be no more representatives of local authorities on port boards, can we at least put it explicitly in the law that port boards are obliged to respect safety in all its forms, including environmental safety? There must be monitoring of odor, dust and noise, which are the primary rights and needs of the inhabitants of a municipality. All these proposals were rejected.

I have drafted a letter to the European Commission, to which I will ask: are these amendments to the ports law not the prohibited hidden state aid? I am not one of those who publicly complain about their country abroad, but there are simply no other options.

Learn from Bordāns, who already has experience of complaining about his country.

I have drafted this letter now only so that it will not be too late when, in a year or two, we have to rectify these amendments or pay a huge fine. There is still time to reflect. I would add that the assets of the Freeport of Riga are around €446 million and those of the Freeport of Ventspils are around €170 million. If these assets are returned to the state and are considered to be 60% of each state capital company, then if the municipality wants to be part of these capital companies, this means that they have to invest another 40%. This was also not clear during the adoption of the law.

Where will the municipalities get these funds? Or have they already decided to participate in these capital companies?

There is no such decision from the municipal councils. Although I requested it in the Saeima Committee. I think that Ventspils municipality is categorically against this because there is no clarity whatsoever as to what has been set up. Will this new port company make any money at all? Perhaps it will have to be permanently invested with the townspeople's money? It is different with Riga. I think that Riga has already "sold itself". The state has made an offer: we will give you money for road repairs, for example, and you will give us the port. Nobody in the Riga City Council objected. It's like a farmer is asked: give us your scythe, plough, mill and land, and we will give you five sacks of flour in the autumn. The farmer is happy: I'll get through this winter! But what about next winter?

The letter from Ventspils City Council also says: "Almost half of the territory of the municipality of Ventspils is being transferred to a state capital company, completely preventing the municipality from doing anything with its property located in this territory." In my opinion, the Law on Local Governments sets out various obligations that local authorities must fulfil, but in this case, neither Ventspils nor Riga will be able to fulfil them because they will be prevented from doing things with their property. Now it's already their former property...

In Latvia, municipalities are the main providers of services to the population, and they are responsible for ensuring all the functions set out in the law. Ventspils municipality asked: if the state does not use all the land in the port area, then let the municipality use it. The MPs said: no. After the debate and the meetings of the Saeima committees, I spoke to some MPs who said, "I understand your arguments, Edgars, but we have an agreement here in the coalition..." For some it is important to pass the civil union law, for others it is important to have ports, for others it is important to allocate funds to patriotic organizations, and if any of these demands are not met, then everyone who needs something will be ready to leave this coalition.

Nobody is leaving anything. One hand washes the other, and as a result, everybody is dirty.

Maybe someone will leave just before the elections, feeling that the ratings are falling... I hope, however, that today's reformers will no longer be in the next Saeima and that they will be replaced by people who can take sensible decisions and correct at least some of these mistakes. It is already clear that this Law on Ports will have to be corrected. After the session of the Saeima, I contacted the Minister of Transport, Tālis Linkaits (JKP), and he also confirmed that the law will have to be corrected.

Now, on the initiative of the ZZS faction of the Saeima, 36 parliamentarians have collected signatures to request the President of Latvia to suspend the publication of the amendments to the law approved by the Saeima for two months, as provided for in Article 72 of the Constitution. The hasty and ill-considered decision to amend the Law on Ports should be put to a popular referendum, so we hope for the President's understanding and willingness to act in the interests of the state and society, not in the interests of select political parties.

It is very good that the signatures have been collected. But why did Linkaits not oppose the amendments before the law was adopted?

It was important for the New Conservative Party to push this Law on Ports forward. When the law started to be considered in its third reading, a number of the pushers realized that many of the things we had pointed out before could cause big trouble...

So the pushing of many accompanying draft laws began, to start correcting mistakes already now. For example, the law does not allow for a state-owned company to have its own police force - in this case, the port police. It will have to be abolished because a police force is not a form of commercial activity. This objection of mine surprised the Saeima committee. Nobody had even thought about it. But it will create a security crisis in the port. It will be the same with the civil union law: all the accompanying laws will be opened up at the last minute.

The Port of Rotterdam is mentioned many times, namely that it is an example of good governance.

Yes, the Port of Rotterdam is mentioned as a good example, but they always forget to mention that the city has a majority shareholding in the port. And the state, which is a third shareholder in this company, came in with a huge investment. It is the city dweller who suffers from the presence of the port: noise, emissions, dust, smells... So all this must be compensated for.

Remember what happened in Beirut on August 4, 2020: a huge explosion in a fertilizer warehouse that destroyed part of the city, killing people. Okay, the Freeport of Riga terminal is incomparably safer, but the scale is several times greater. And these are all risks for the people of Riga and Ventspils. They were always compensated by the fact that the port invested part of its profits in the city, in its prosperity and safety. And the citizens saw that: streets were repaired, kindergartens were built, festivals were held...

Now there will be none of that. The ports' profits - if any - will go to the State Treasury. If the ports are privatized, private entrepreneurs will profit.

Some say: see Klaipėda port - it is 100% state-owned. But it has always been a state port! At no time has the port taken assets belonging to the townspeople to invest in a state-owned company. Environmental and safety issues are important in the Port of Klaipėda, which is a completely different story. In Latvia, the ports are being given to one ministry, that is to say, one political force, namely the JKP. Ventspils City Council does not agree, Riga City Council has not commented on the situation. The government will invite the two municipalities to participate in the capital companies, but they may not agree: why invest in a state capital company when the municipality will have absolutely no say with its 40% stake, as opposed to the 60% owned by the state?

The tragic thing is that public debt is rising, and has now doubled. And it will have to be repaid at some point. The country will have to re-credit itself and then it will borrow money at completely different interest rates. If we cannot pay it back, the emissary will come in, point at the Law on Ports, where it says that ports cannot be privatized, and say: take that sentence out. Here is the Law on Latvia's State Forests - take that very same sentence out. What will be left to do? Privatize everything and give it away. And I am not even talking now about the green course and the other horrors that are coming our way.

Many people are saying: if the NA, no longer able to cope with the ideological contradictions, which are already becoming too much when being in a coalition with die-hard liberals, leaves the coalition, the NA will be replaced by ZZS. Are you then political suiciders?

I see absolutely no possibility of working with the parties in this coalition. Of course, it is not our aim to be eternal oppositionists, to wave our fists but not to take responsibility for anything. But I do not see competent people in this coalition to work with. When I asked specific questions in the Saeima committee about the amendments to the Law on Ports, they all looked at me with glazed eyes, and it was clear to me that they did not understand the substance of the issues. Unfortunately, in the votes, most MPs stick to factional discipline rather than thinking logically.

Another eternal argument: you will just vote as Lembergs tells you.

Aivars Lembergs is no longer someone to be feared: he has been imprisoned without trial. I have said several times that this looks like revenge. Besides, say what you will, but he has great experience and expertise in the transit sector. It is, after all, alarming that the municipality of Riga is being deprived of almost two thousand hectares of land, but for the people of Ventspils will be even worse; they should be taking to the streets. If I were a resident of Ventspils, I would go to the Saeima to protest, regardless of whether Lembergs is in prison or not. To quote the letter from the people of Ventspils: "The draft law gives the right to a state capital company to use, rent, lease, build on, encumber and freely dispose of all income generated by the use of municipal property owned by the municipality of Ventspils at its own discretion.

Such conduct is in stark contradiction to the obligation of a municipality to act on its property in the best interests of its residents. Moreover, the draft law provides that the state capital company may freely use the income derived from the use of municipal property also outside the administrative territory of the Freeport of Ventspils and the municipality of the State Capital City of Ventspils. In particular, the income generated by the state capital company from the use of municipal property may be paid as dividends to the State or used for various purposes not related to the territory of the municipality.

Thus, the principle of local self-governance, which follows from Article 1 of the Constitution of the Republic of Latvia and which provides for the right of a local government to manage its administrative territory within the limits established by it, as well as to freely act with property belonging to it in accordance with Article 77 of the Law on Local Governments and the European Charter of Local Self-Governments, is infringed."

However, the Saeima members did not take into account any of the arguments mentioned in the letter and voted in favor of the destruction of the two ports of Riga and Ventspils.

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The publication is paid for by the association of political parties Zaļo un zemnieku savienība