To continue the sea port reform and improve the involvement of municipalities in sea port management, Latvia’s Ministry of Transport has developed and submitted to the Cabinet of Ministers new amendments to the Law on Ports.
The annotation to the legislative draft mentions that amendments were developed with respect of the request from the Economic, Agricultural, Environmental and Regional Policy Committee to review the Sea Port Reform in detail.
The prepared amendments provide for expanding the law with new regulations and improving existing ones that govern both large and small sea ports in Latvia. The objective of amendments is to ensure more efficient management, development and competitiveness of sea ports.
Potential law amendments were previously discussed at multiple meetings with representatives of the sector.
During those meetings officials exchanged opinions about the needs and problems that have to be resolved.
Currently the law states that sea port authorities are to sign land and other real estate lease agreements with legal persons for terms that do not exceed 45 years. It is allowed to extend contract terms if the tenant has invested at least EUR 70 million into the sea port. The new legislative draft provides for reducing the required investment threshold to EUR 40 million with an option to extend contracts for another 45 years.
According to the ministry, sea port-based companies have said that the EUR 70 million threshold is too high, especially considering the risks in the sector. This could cause difficulties for smaller companies to continue operating from sea ports, as well as limit companies’ development potential. The ministry explains that the updated regulations will provide tenants will a bigger sense of safety when it comes to their rights, as well as create more realistic opportunities for contract extension without requiring an impossibly large investment.
The Law on Ports also includes multiple regulations that govern construction right principle for sea port territories.
Regulations were also expanded with a new source of funding for sea port authorities – revenue from EU and other international funds. The ministry explains that sea port authorities will be provided with greater financial stability and ability to invest in infrastructure in accordance with state and regional priorities with contribution to sustainable sea port development and economic growth.
As for sea port fees, the ministry has developed and has coordinated with other ministries and NGOs regulations that govern the way sea port authorities compose fees, benefits and exemptions, tariff thresholds for port services.
To ensure clarity and legal certainty in the sector, the Law on Ports will mention that port charges and the tariff thresholds for port services set by the port authority are a general administrative act. The ministry explains that this ensures a common approach to the setting and application of port charges and will not result in the suspension of the operation of the border levels for port charges and port service tariffs during both the dispute and the appeal process.
It is planned to add multiple amendments to the Law on Ports that apply only to small sea ports. The purpose is to reduce the administrative burden and make management easier.
The law was also expanded with two functions that require sea port authorities to cooperate with NGOs and education institutions in topics related to shipping, fishing and sea port management, as well as activities that promote sea ports.
Amendments to the law also provide Ventspils Freeport authority pre-purchase rights when it comes to real estate within the sea port’s territory. These changes are intended to provide an effective management process and transparency in the work done by the port’s authority until its liquidation.
Transition rules also clarify the order in regards to the distribution of shares between the state and the municipality in the capital company Ventas osta JSC and Rigas osta JSC. Riga municipality has performed an audit of the property it can invest into the base capital of the new company. The overall value was at EUR 6.14 million in August 2022. If the municipality is to invest 40%, the state is to proportionally invest EUR 9.21 million.
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