Riga Free Port to raise fees next year

  • 2005-11-16
  • From wire reports
RIGA - Riga Free Port officials said they were planning to raise port fees in the near future, the first such hike in five years. A port spokesman said last week that the raise would take place next year, though he refused to say exactly when.


Karlis Leiskalns explained that three alternative plans for raising fees have been drafted, and the port's board would likely adopt one at its Dec. 13 meeting. He said the rise wouldn't be steep and that if the fees, which at present are denominated in U.S. dollars, were converted into euros, the increase would comprise some 10 percent.

Leiskalns also pointed out that even after the fee-hike, Riga Port would remain one of the cheapest in Eastern Europe. "Costs undoubtedly have to grow," he said, adding that expenditures have soared "tremendously" since 2000, when the port last raised its fees.

As expected, businesses working at the port have strongly objected to the plans.

Riga Free Port is the second largest port in Latvia by cargo turnover. In the first 10 months of the year, the port handled 20.3 million tons of cargo, a 1.2 percent rise year-on-year.

Meanwhile, the port's administration said that it would not reduce port fees for Tallink, the Estonian passenger carrier, even though this was one of Tallink's main requirements for launching a ferry line to Riga. Leiskalns said that the fees for Tallink would not differ from fees for other shipping companies and the port would not reduce them.

However, he added that passenger fees could be reduced by the terminal's operator 's Rigas Pasazieru Terminalis (Riga Passenger Terminal).

Leiskalns said that Riga Free Port would benefit the least from passenger traffic run by Tallink, so the administration has decided not to reduce fees. "We hope to at least earn back our investments in five years," he said.

Leiskalns said that Latvia, Riga and the port desires to attract Tallink but "not by any means."

"The situation with Tallink is very complicated," he said.

Leiskalns predicted that such a large company as Tallink would not see the port fee of 5,000 's 7,000 euros as an obstacle for launching its ferry service.

The Riga free port administration also decided to demand a warranty that Tallink undertakes to provide the ferry service to Riga for at least five years. Leiskalns added that Tallink then would be interested in increasing passenger turnover.

Also, Leiskalns told reporters that the Riga Free Port administration was planning to buy the passenger terminal from the Riga City Council and invest more than one million lats (1.4 million euros) in upgrading the terminal.

He also said that the port did not need the approval of Riga Passenger Terminal for changing owners.

Tallink's ferries are expected to start running between Riga and Stockholm as of Jan. 10, 2006. Among Tallink's main requirements for launching a ferry route were development of terminal infrastructure and a reduction of fees.

Also, the port's administration has decided to start returning the loan that it guaranteed for the bankrupt shipper, Rigas Juras Linija (Riga Sea Lines) to buy the ferry Baltic Kristina to be put on the Riga-Stockholm route.

The port will announce a competition for another loan that will help it repay the original credit to Parex Bank.

Leiskalns said that the principal amount, interest on the loan and related penalties should be paid within a year after declaring RJL as insolvent. He said that, since Riga Sea Line's administrator has planned to auction the company's ferry, the Baltic Kristina, the port could get the cash and repay the loan.

He also said that Riga Port itself could purchase the ferry.

The Baltic Kristina stopped sailing between Riga and Stockholm on Oct. 15, 2005 after being barred from leaving the port by Riga Passenger Terminal, which demanded unpaid debts.

Parex Bank's claim against Riga Sea Lines is $7.7 million.