RIGA - Tallink, Estonia's shipping company, has given preliminary consent to launch regular passenger service between Riga and Stockholm, Latvia's Transport Ministry reported. Details of the deal are to be worked out Feb. 28.
A tentative agreement was reached between Transport Minister Ainars Slesers and Tallink chairman Enn Pant. Slesers, who is credited with bringing two discount airlines to Riga, said the market was stagnant and needed competition.
"The existing ferry line does not ensure the necessary level of service quality and creates a negative impression in foreign countries about Riga and the potential of its port," he said.
"Unfortunately, this situation has formed over the course of many years, and I had to make a considerable effort to change it. Much work will be needed to upgrade the infrastructure of Riga [Passenger] Port to the highest standards, so that the big passenger ferries can come into the port," he said.
The announcement elicited a sharp response from Riga city and (Rigas Juras Linijas) Riga Sea Line officials, who see the ministry's initiative as irresponsible and harmful to the economy.
Riga Mayor Gundars Bojars, who is also chairman of Riga Free Port, expressed surprise that the negotiations had taken place without the knowledge of Riga Sea Lines, which currently operates the only Riga-Stockholm connection and is owned by the port and Riga City Council.
"A while ago no operators were ready to take the Riga-Stockholm route, so the Riga and Riga Free Port authorities, aware of the necessity to develop this niche, restored and stabilized a regular ferry line through their own efforts, using port and taxpayer resources," said Bojars. "Therefore it would be insane to donate the work that has been done to the operator from the neighboring state. It would mean the bankruptcy of (Riga Sea Line) in the first place."
Last year Riga Sea Line's ferries, the Baltic Kristina and Gute, carried 78,292 passengers between the two cities, an 8 percent increase year-on-year.
Gatis Kamaruts, chairman of the company's board, was also stunned by the announcement. "A rather strange situation has developed when competition is created for [Riga Sea Line] as a local company funded by the Riga local authority and Riga Free Port, and is, in fact, good," said Kamaruts. "It means that instead of developing its state-run company, purchasing new ferries and extending the route, [the Transport Ministry] supports its Estonian neighbor."
He rejected Slesers' criticism on service quality, noting that the minister had neither visited Riga's Sea Line ferries nor used their services, which were valued for their quality among industry professionals.
Meanwhile, Tallink Group officials said they were interested in the route. Janek Stalmeister, deputy finance director, said that the company hoped to include the route as part of its long-term development plan.
"We have previously looked at possible new routes but we have not yet made any concrete official decisions yet regarding any of those, including the Riga-Stockholm line," he said, adding that he didn't know if the latest initiative came from Latvia or Tallink.
Tallink has a broad circle of shareholders and time is needed for strategic decisions to be made. "Decisions like this aren't made overnight," he said.
It is unclear how the Latvian government would react to Slesers' latest initiative (see story on this page), but considering that the right-wing ruling coalition is intensely critical of Bojars and other Social Democrats in Riga, it is possible he will find support.
Tallink has a fleet of 11 ships for transporting passengers, including five car ferries, four fast boats and two cargo vessels.
