Auditor's office, opposition blast Transport Ministry

  • 2008-04-09
  • By Talis Saule Archdeacon and Monika Hanley
RIGA - The State Auditor's Office has released a damning report outlining major spending violations by the Transport Ministry, provoking a wave of harsh criticism 's even calls for resignation 's aimed at the minister
"The Ministry of Transport has permitted unjustifiable and non-beneficial utilization of state budget resources," said the audit report, released on April 2.
The auditor's report accused the ministry of a number of violations. One of the worst offenses, it said, was that the Transport Ministry favored certain companies for road maintenance contracts 's allowing those companies to simultaneously drive up prices and shoulder out the competition.
"It was disclosed during the audit that substantiation for and control over allocation of additional resources to the state motor road fund is substantially weaker on occasions when contract price offered exceeds contract price anticipated," the report said.

Competition Council head Ieva Jaunzeme said that this sort of offense was not merely an issue of poor administration and should be classified as corruption.
"Several cartels could not have been formed if there was no support from above," she was quoted by Diena as saying.
The council has clashed with Slesers over a discount system at Riga International Airport that favors large carriers. At one point the acrimony reached a peak, and the minister suggested that the government should scrap the council.
Slesers has also locked horns with the State Auditor's Office, whose chief, Inguna Sudraba, filed a lawsuit against the minister in December for defamation of character.
The report, along with the dismal performance of the nation's postal service, has prompted the opposition New Era party to call for the minister's resignation.

"We feel that it is a question of whether he can or can't do the job, and we feel he has done a far from satisfactory job. The situation with the postal service in general and with all the scandals regarding the unclear use of funds all amount to [the reasons behind] our request to put someone else in the position," former New Era head Krisjanis Karins told The Baltic Times.
The party submitted an official request for a vote of no-confidence on Transport Minister Ainars Slesers, one of the most high-profile members of Cabinet, on April 2. When The Baltic Times went to press, Parliament had not yet come to a decision on the motion.
The ministry also stands accused of spending massive amounts of state money on things superfluous to the ministry's operations. The ministry budget, for example, included thousands of lats on rented artwork and space in a local gym.
Moreover, the ministry allegedly overspent on a conference promoting Russian-Latvian relations. The conference's 100,000 lat (142,000 euro) price tag 's amounting to 523 lats per participant 's drew sharp criticism from the auditor's office.

Slesers sent out a press release on April 3 defending the ministry's actions. He said the ministry could not be held culpable for development of the private sector.
"Latvian State Roads cannot be blamed for construction firms not being active enough in promulgating competition. All these firms are private, and I as minister cannot regulate the private sector," the minister said.
"If one wishes to compete in this business 's road upkeep 's he can start his own business and invest the necessary funds," the minister said.
As regards the conference, Slesers said the conference was meant to help secure future business with Russia in the field of transportation. "If Latvia is going to have bad relations with Russia, then we will have problems with transit, and that is my responsibility as transport minister," he said.
Slesers' critics have also highlighted the gross mishandling of Latvijas Pasts, the country's national postal service.

Latvijas Pasts is a state owned company under the auspices of the Transport Ministry. Last year it posted losses of 10 million lats, up from 4.8 million lats the year before. The company is now planning drastic layoffs, along with the introduction of a new postal banking service, to help boost profits.
As Slesers told the Diena daily in an interview, "The business should be transformed 's losses should be moved from post offices to the shoulders of the postal bank. We should dismiss medium-level administration to cut expenses by 1.5 million lats (2.1 million euros). We should lift expenses for introduction of electronic signature from the postal company."

Slesers predicted that Latvijas Pasts would be profitable as early as 2010.