Latvian President Egils Levits has halted the publication the amendments to the Law on Ports passed by the Saeima and aimed at changing the port management model. Thus, it is now possible to collect signatures for holding a referendum on the issue.
According to information published by the official journal of Latvia Latvijas Vēstnesis, the Latvian President has stopped the amendments from being published for two months «on the basis of the Article 72 of the Constitution and taking into account a demand submitted on February 18 by 36 members of the Saeima.».
The Article 72 of the Latvian Constitution requires the President to stop the publication of a law, if it has been requested by at least one-third of the members of the Saeima. A law halted this way has to be given for voting in a referendum, if at least one-tenth of the population of Latvia or 155 000 voters require a referendum on the issue.
If this number of signatures is not collected during two months, the law has to be published.
However, a referendum shall not take place if the Saeima votes on this law again and if not less than three quarters of all deputies support its adoption, according to the Constitution. The Article 71 of the Satversme, in turn, provides an opportunity for the President to request a second review of the law in the Saeima within ten days after its adoption.
The signatures of 36 legislators have been collected to suspend the publication of the amendment to the Law on Ports adopted by the Saeima for two months at the initiative of the members of the Saeima of the Greens and Farmers Union (ZZS). According to information by the ZZS representative Dace Kārkliņa, ten legislators of its faction have supported demand, joined by 13 MPs of the Harmony faction, as well as by other opposition legislators.
Opposition MPs stated that the adopted amendments had been founded on a political slogan to carry out «a simple port management reform», where the changing of the administrations of the ports of Riga and Ventspils as derived public persons into state capital companies «is a formal issue that is not worth an appropriate discussion in the Saeima».
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The opposition legislators emphasised that the amendments set an unacceptable precedent and «further threaten the territorial and financial autonomy of virtually any local government» in Latvia by implementing undiscussed, unjustified and fundamentally unnecessary public administration reforms.
According to Uldis Augulis, the leader of the ZZS Saeima faction, discussing the change of the port management model, in the responsible parliamentary committee, the has been repeatedly posed the question of how this would affect the development of ports. Such an assessment has not been received, however. «The assets that the new companies will work with will be worth half a billion euros. At the same time, no assessment has been made that would reasonably justify the hurried and undiscussed change of management of ports,» said the chairman of the ZZS faction.
In the letter to the President, the MP pointed out that according to the adopted amendments to the Law on Ports, about 42% of the administrative territory of Ventspils City (including municipal property worth more than 150 million euros)
«without any economic and legal justification» would be transferred to the use of a state capital company for an indefinite period of time and free of charge.
The Law on Ports sets forth the right of a state capital company to use real estate owned by Ventspils City Municipality at its own discretion, to rent, lease, build, encumber and act freely with all income obtained using municipal property.
Reportedly, after long and extensive discussions, the Saeima has passed in the final reading amendments to the Law on Ports, which sets forth the change of the management model of the ports of Riga and Ventspils.
The law requires for the ports of Rīga and Ventspils to be changed into capital companies.
The transitional provisions of the law stipulate that the Latvian Cabinet of Ministers and Riga city municipality have to make a decision on the establishment of a capital company for the management of the Port of Riga by September 1, 2022. After an agreement on the establishment of a joint capital company of the state and the local government has been reached, the state would invest in its share capital the property and assets belonging to the Freeport of Riga Authority, and the Riga municipality would own the property and assets in the port territory.
It is also set forth that the state invests the property and assets belonging to the Freeport of Ventspils Authority in the share capital of JSC Ventas osta until September 1 and if an agreement is reached with Ventspils city municipality on its participation in the capital company, the Ventspils city municipality would invest the property and assets in its territory that it owns and that had been transferred to the possession of the Ventspils Freeport Authority.
In both capital companies, the state would own not less than 60% and the local government – not more than 40% of the capital.
The shareholders would sign a shareholder agreement to define and clarify the rights and obligations of the shareholders in relation to the joint management of the capital company.
It is set forth that the relevant port authority would have in its possession state and municipal land and water area and navigation equipment and devices, state-owned or state-owned buildings (structures) related to state land. The Port of Riga, Liepāja and Ventspils would have common port hydraulic structures (piers, current regulation dams, breakwaters, coast fortifications), shipping lanes, state or municipal berths, and in other ports – state or municipal common hydraulic structures and berths.
The port authority would be entitled to lease, rent, issue building permissions, encumber with property rights, including rights of use for the construction of buildings (structures), surface and underground communications or perform other economic activities.
The port authority would also have the right to construct the buildings (structures) necessary for the operation of the port owned by the state or local government on its own land as independent property objects. The port authority would enter this building (structure) in the land register in its own name. The port authority would have the same rights in respect of land of legal or natural persons, on which a personal right of use has been established.
At the same time, it is set forth that the port authority would be liable for all encumbrances and losses caused to the owner and third parties by its activities in transactions with real estate owned by the state or local government.
The law stipulates that the Freeport of Riga Authority and the Freeport of Ventspils Authority shall be liquidated by December 31, 2022.
The decision on the liquidation of the Freeport of Riga Authority and the Freeport of Ventspils Authority would be made by the Cabinet of Ministers, and the liquidation process would be implemented by a liquidation commission approved by the Cabinet of Ministers. The Commission would ensure that the rights and obligations of the two free port authorities and the assets, together with all related obligations, rights and rights of use, including credit commitments, are transferred to the companies that would be the port authorities in both cities. It has been determined that the liquidation commission of the Cabinet of Ministers have to be established by March 31, 2022.
Until 31 December this year, the agreements concluded and in force between the Freeport of Riga Authority and the Ventspils Freeport Authority with port service providers will be renewed, replacing the respective freeport authorities with capital companies.
The law stipulates that the Latvian Ministry of Transport, the Ministry of Finance, the Ministry of Economy and the Ministry of Environmental Protection and Regional Development would be the holders of capital shares in capital companies. The state-owned shares would be transferred in the following proportion: 40% to the Ministry of Transport, 20% to the Ministry of Finance, 20% to the Ministry of Economy and 20% to the Ministry of Environmental Protection and Regional Development.
Taking into account the impact of the operation of a port on the municipality, as well as the number of properties owned by the municipality, which has already been transferred to the port authorities, the law sets forth that the municipality has the right to acquire shares in the capital company, which performs the functions of port management, if at least two-thirds of shares are left to the state.
Thus, the municipality would continue to actively participate in ports, control the use of its property and ensure that the interests of the municipality are respected.
For the participation of the private sector, the law would contain a new article requiring port authorities to set up co-operation councils, involving port users and other stakeholders in matters relevant to port development. In the view of the authors of the reform, this will give companies operating in the port a clear statutory right to engage in port development, engage in dialogue with the port authority and reach mutually acceptable solutions, including on infrastructure development, port fees, compliance with different environmental requirements, administrative issues and many other port issues, necessary to companies in their daily work.
The port management reform would apply to the ports of Ventspils and Riga. The Liepāja special economic area would retain its status until December 31, 2035.
The law also clarifies the rules of operation of small ports in Latvia.
Latvian President halts changes to port management law, opening chance for referendum
