On the 17th of January Latvia’s government declared as null and void the Cabinet of Ministers order of the 31st of August 2022 On the purchase of real estate located on S. Eizenšteina Street for the development of Biķernieku sports base project.
The Ministry of Finance notes that in 2019 the Cabinet of Ministers viewed the conceptual report on the implementation of the aforementioned sports complex by the Ministry of Transport. This report listed two possible solutions – implementation of the sports base development project while maintaining in force shared property rights or implementation of the project by acquiring the land necessary for the project from private land owners.
The Ministry of Finance received a letter from the Fiscal Discipline Council. In it the council mentions that allocation of finances in order to acquire real estate property on S. Eizenšteina Street in order to implement Biķernieku sports base complex development project
would not be an example of good budget management, would not comply with fiscal policy priorities, and would not expand state productive capacity
that would generate added value of increase employment. The council also stresses in the letter that allocation of money for this project should be carried out with respect of the established budget procedure.
In the letter sent on the 13th of September 2022, in response to the information reported by mass media and the explanation provided by the Ministry of Transport, the Ministry of Finance asked the Ministry of Transport to reassess the topic and offer alternative solutions, as well as submit them for repeated review to the Cabinet of Ministers.
In its response letter of the 20th of September 2022, the Ministry of Transport stated that acquisition of real estate is correct and compliant with regulations that govern acquisition of necessary real estate property and rules of the Cabinet of Ministers.
Additionally, the Ministry of Finance received a letter from the Prosecutor General’s Office, which mentioned that application of the law on the alienation of property is allowed if there are no other means to accomplish the stated goal. However, the inspection that followed produced no evidence that the Road Traffic Safety Directorate (CSDD) had performed all possible and necessary activities in order to reach an agreement with land owners and to thereby resolve the shared property issue.
Considering this, the prosecutor general asked if the law on the alienation of property is applicable in all cases when alienation of property is necessary to ensure the functioning of state capital associations. The costs associated with acquisition of real estate and registration of property rights in the land book are planned to be covered from the state budget programme for emergencies, not the regular budget process.
Because of all this, as well as the lack of confidence that the chosen solution may is not compliant with good budget management practices, the Ministry of Finance initiated the procedure to find the order previously made by the Cabinet of Ministers as null and void.
The aforementioned order of the Cabinet of Ministers provided for the coverage of the costs worth a total of EUR 8.192 million associated with the purchase of real estate and registration of property rights in the land book from the state budget programme for emergencies.
On the 30th of August 2022 the Cabinet of Ministers
decided to provide the Ministry of Transport with EUR 8.192 million in order to buy back from three businessmen real estate
necessary for the implementation of Biķernieku sports base project on S. Eizenšteina Street. The real estate property in question consists of two pieces of land one that is 3.2253 ha large and the other 14.5012 ha. Both have buildings owned by CSDD located on them.
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