On Thursday, the Latvian Parliament (Saeima) supported amendments to the Ports Law in the first reading, aimed at improving the port governance model by restoring municipal participation in port management.
However, with the Union of Greens and Farmers (ZZS) not supporting the position of the other coalition parties, MPs simultaneously rejected amendments to the Liepāja Special Economic Zone (SEZ) Law in the first reading. These amendments would have introduced a unified selection process for board members in the management of Liepāja Port in the future.
Before the vote, MPs decided to treat the Ports Law amendments as urgent.
The amendments propose introducing a unified governance model in the large ports, with port boards consisting of four members – two nominated by the state and two by the local municipality – selected through open competitions.
The chairman of the port board would be a representative nominated by the Minister of Transport, who would hold a casting vote in case of a tie. All port board members would be appointed by the Cabinet of Ministers following the selection process, ensuring additional quality control.
For small ports, it is proposed that the port authority be a municipal institution with a board of no more than five members instead of the currently possible ten. These boards would have equal representation from municipal officials and representatives of port-based businesses. Additionally, upon the municipality’s initiative, one member may be delegated from the Ministry of Economics, the Ministry of Agriculture, or the Ministry of Transport. Thus, small port boards would consist of two to five members depending on whether the municipality involves ministry representatives. Municipalities would also have the option to set the statutes for their port authorities.
The proposed amendments also foresee changes to port territory boundaries to clearly distinguish areas needed for core port functions from areas suitable for commercial development. In core function areas, state and municipal land and property cannot be alienated to third parties.
The amendments stipulate that each port authority will establish a Port Cooperation Council including users such as stevedoring companies, regular line operators, and other stakeholders. According to the Ministry of Transport, this mechanism would not only enable port businesses to influence strategic decisions but also ensure equal rights for all stakeholders to participate.
Answering MPs’ questions, the Ministry emphasized the importance of depoliticizing port management for successful development. The proposed reform introduces unified minimum requirements and selection procedures for port managers, similar to those already applied to state-owned enterprises.
However, the majority of MPs rejected in the first reading the amendments to the Liepāja SEZ Law, which would have allowed Liepāja Port to retain its current governance model – a nine-member board with three representatives each from the municipal council, local businesses, and the state (nominated by the Ministries of Economics, Finance, and Transport) – until the 31st of December 2035.
Transitional provisions of the draft law envisioned that the unified board member selection principles, including open competitions, would eventually apply to Liepāja Port as well.
The draft law received 29 votes in favor (from New Unity and the Progressives), 27 against (mainly from United List, “For Stability!,” and Latvia First), and 25 abstentions (from ZZS and the National Alliance), thereby preventing the proposed changes to Liepāja Port.
As previously reported by LETA, in July last year the Ministry of Transport submitted an informative report abandoning the earlier port reform idea to transform the Freeports of Riga and Ventspils into joint-stock companies. However, the report received objections from the Ministry of Economics and other stakeholders regarding governance issues, which delayed approval and led to further discussions.
In February 2022, the Saeima adopted amendments to the Ports Law in the final reading, planning to transform the Riga and Ventspils ports into joint-stock companies. In early 2023, the Saeima extended the deadline for liquidating the existing port authorities to the 31st of December 2023.
In January 2024, however, the Saeima adopted further amendments allowing the port reform process to be reconsidered if necessary.