Study on Strategic Evaluation on Transport Investment Priorities under Structural and Cohesion funds for the Programming Period 2007-2013 N o 2005.CE.16.0.AT.014 Country Report Latvia Final Report Client: European Commission, DG-REGIO ECORYS Nederland BV Rotterdam, September 2006 ECORYS Nederland BV P.O. Box 4175 3006 AD Rotterdam Watermanweg 44 3067 GG Rotterdam The Netherlands T +31 (0)10 453 88 00 F +31 (0)10 453 07 68 E netherlands@ecorys.com W www.ecorys.com Registration no. 24316726 ECORYS Transport T +31 (0)10 453 87 59 F +31 (0)10 452 36 80 Table of contents 1 Introduction 7 1.1 Background 7 1.2 The Strategic Evaluation 8 1.3 The Country Report 8 1.4 Structure of the report 8 2 Transport Sector: current situation 10 2.1 Introduction 10 2.2 Latvia 10 2.3 Situation per mode of transport 12 2.3.1 Roads and road transport 12 2.3.2 Railways 14 2.3.3 Urban transport 17 2.3.4 Inland waterway transport 17 2.3.5 Sea ports 17 2.3.6 Airports 19 2.3.7 Trends and indicators 20 2.4 Conclusions: SWOT analysis transport system 23 3 Accessibility analysis 25 3.1 Introduction 25 3.2 Methodology: Accessibility Problem Index 25 3.3 Transport needs 26 4 Previous support programmes 32 4.1 National public funding for transport infrastructure 32 4.2 EU funding 33 4.3 Other sources of financing 34 5 National Transport Strategy 37 5.1 Introduction 37 5.2 Long term National Transport Strategy and Planning 37 5.3 Operational programme 2007-2013 40 6 Prioritisation of Transport Investments (2007-2013) 43 6.1 Introduction 43 6.2 Community Strategic Guidelines 44 6.3 Additional factors for the prioritisation of transport investments 45 7 Assessment of Impacts 49 7.1 Introduction 49 7.2 Methodology 49 7.3 Scenarios 51 7.4 Impact assessment 57 7.5 European effects 68 8 Conclusions on investment priorities 73 8.1 Introduction 73 8.2 Transport investment priorities 2007-2013 73 8.2.1 National and Regional and Local Needs 73 8.2.2 Needs per sub-sector 74 Annex A: TEN-T priorities 77 Annex B: Accessibility “red flag” analysis 83 7 1 Introduction 1.1 Background The recent enlargement of the EU to 25 Member States clearly creates a new challenge for its Cohesion Policy. Disparity levels within the EU have increased substantially and will further increase with the accession of Bulgaria and Romania in 2007. This is an explicit point of attention as the Treaty states that, in order to strengthen its economic and social cohesion, the Community shall aim at reducing the disparities between the levels of development of various regions and the backwardness of the least favoured regions or islands, including rural areas. This aim lies at the core of the Commission’s regional policy. One of the key elements of the cohesion policy of the Commission is the contribution of the development of new transport infrastructure to regional economic development. Extensive spending has taken place in this domain under ERDF, Cohesion Fund and ISPA. One of the prominent initiatives in the European Union in this respect is the development of the Trans-European transport networks (TEN-T). In 2003 the Commission has identified the 30 priority projects of the TEN-T up to 2020. 1 The priority projects include: “the most important infrastructures for international traffic, bearing in mind the general objectives of the cohesion of the continent of Europe, modal balance, interoperability and the reduction of bottlenecks”. For the new programming period 2007-2013 the Commission seeks to strengthen the strategic dimension of cohesion policy to ensure that Community priorities are better integrated into national and regional development programmes. In accordance with the draft Council Regulation (article 23), the Council establishes Community Strategic Guidelines for cohesion policy to “give effect to the priorities of the Community with a view to promote balanced, harmonious and sustainable development” 2 . To assess the impact of programmes in relation to Community and national priorities the Commission has indicated that evaluations on a strategic level should be undertaken. The present evaluation should be seen as one of these specific strategic evaluations. The strategic evaluation should feed in the process of determining transport investment priorities and the preparation of the national strategic reference frameworks and 1 Decision 884/2004/EC of 29 April 2004. The total investment of the 30 priority projects amounts to € 225 billion at the 2020 horizon. 2 COM(2004)492 8 operational programmes. As such, it should serve to enhance the quality, effectiveness and consistency of Fund assistance. 1.2 The Strategic Evaluation The strategic evaluation is directed the transport sector. Three specific objectives have been formulated for this strategic evaluation: • To provide an analysis of the situation in selected fields relevant to transport, using structural indicators across Member States, plus Romania and Bulgaria; • To assess the contribution of Structural and Cohesion funds relative to the current and previous programming periods and draw lessons of relevance for the purpose of the study in terms of identification of potential shortcomings in the development of transport priority projects that might have hampered the utilization of those funds or their expected benefits; • To identify and evaluate needs in the selected fields and identify potential investment priorities of structural and cohesion funds for the programming period 2007-2013. 1.3 The Country Report The strategic evaluation results in specific country reports for all 15 countries and a synthesis report. The current report is the Country Report for Latvia. Its main aim is to give a more detailed indication of the strengths and weaknesses of the transport system in the country and to address areas for future intervention. Where relevant this accompanied by recommendations with respect to the overall transport policy of the country. The country reports feed into the joint programming effort with the Member States for the next period, as will be detailed in the National Strategic Reference Frameworks and the subsequent Operational Programmes. 1.4 Structure of the report The report is structured around three building blocks. • First a needs assessment is presented based on an analysis of the current transport systems and a modelling analysis which reveals the current (relative) level of accessibility per region. This leads to first conclusions strengths and weaknesses of the current transport system and related transport investment needs (Part A). • Next an overview is presented of the transport investment priorities in the past period (Part B). • Finally, future areas for priority transport investments are identified. This builds on the needs assessment in the first part but also addresses other factors such as the contribution to EU and national policy objectives, the availability of other sources of funding and the administrative capacity of the country (Part C). 9 Part A: Needs assessment current situation 10 2 Transport Sector: current situation 2.1 Introduction This chapter describes the current transport situation and policy in Latvia. After a brief introduction on the geographical and economic characteristics of the country, it first describes the situation per mode of transport. The analysis of the current situation is summarized in a SWOT table on the main strengths and weaknesses. The assessment of the transport system is followed by an analysis of the key transport policy issues in Latvia. 2.2 Latvia Located in the north-eastern of Europe, geographically Latvia could be considered as being located at the periphery of the European Union. However, bordering the Baltic Sea on one side and located between its two fellow Baltic States - Estonia to the north and Lithuania to the south - and Russia and Belarus to the east, Latvia is at a strategic geographical location in the North-east of Europe. Figure 2.1 Map of Latvia Most of the country is composed of fertile, low-lying plains, with some hills in the east. There are not many natural barriers, except for the rivers, especially the biggest one – the Daugava. Latvia’s coastline is 494 kilometres and it has three important ice-free sea ports. These conditions favour Latvia as an important transit corridor to Russia and other CIS [...]... people living there and would ignore the needs of the densely populated central regions to combat traffic congestion and so endanger the competitiveness goal of the Lisbon Strategy of the European Union On the other hand, to invest only in transport in the most densely populated central regions with the greatest congestion problems would not only lead to ever more traffic but also widen the existing... the same conditions for competition in freight and passenger transport 3 To achieve the optimal conditions for intermodal competition, taking into account social costs, environmental issues, and the economic interests of the country 4 To achieve the maximal utilization of the public railway infrastructure capacity The charge for the usage itself is based on the principle of full cost recovery The Stock... According to the latest amendment to the Law on Railway there are two regulatory bodies in the Latvian railway transport sector, the ‘State Railway Administration’ and the independent ‘Public Utilities Commission’ The State Railway Administration is responsible for issueing cargo transportation licences The Public Utilities Commission is responsible for issueing passenger transportation licences and for infrastructure... approximately 16% of the GDP The transport and communications sector is one of the most dynamic and accounts for about 30% of all direct foreign investment3 Freight shipments between Russia and the CIS, and the West, are the core of the transit industry in Latvia Freight shipments from Russia and other CIS countries to the West are the core of the transit industry in Latvia The centres of the freight transit... in accordance with the Law on Railways The amount of investments for maintenance and development of the railway infrastructure has decreased On the one hand this decrease is due to the decrease of the income level from freight carriage and on the other hand due to the fact that part of this income is still used for cross-subsidising unprofitable passenger rail transport and not for renewal of fixed... project in transport sector, and commenced preparation of methodological guidelines 6 The implementation of PPP projects is regulated by the Law on Concessions adopted in 2000 The procedure of concession agreement registration in the Register of Enterprises of the Republic of Latvia and control over these agreements are established in Regulations adopted in 2004 35 Part C: Future transport investment priorities. .. needs assessment on a regional level It clearly complements Chapter 2 in which the current situation of the transport system is described where potential deficiencies are addressed The analysis on the current situation together with the analysis of transport needs from a cohesion perspective form a basis for identifying possible investment priorities In this chapter, first a description of the needs assessment... the Latvian ports for handling cargo coming by rail is old and in bad condition For example, the container terminal at Riga port can handle only eight wagons at the same time, and thus, as the cargo volumes on rail increase annually, there is a need for increasing the cargo-handling-capacity at the terminal 4 Reloaded cargo includes loaded plus unloaded cargo 18 Figure 2.4 Composition of cargo flows... apply for financing from the Cohesion Fund up to the amount of approximately 60 million EUR per year, and 30 million EUR per year from the European Regional Development Fund As a result, total EU funds for the transport sector have increased from 108 million EUR in 2001 to 315 million EUR in 2004 The number of projects in the transport sector has increased from 5 in 2001 to 21 in 2006 The focus of the. .. maintain the high share of public transport The urban region of Riga is the only region where there are serious congestion problems Here public transport has a real chance to maintain or even expand its share 2.3.4 Inland waterway transport There is hardly any inland water traffic in Latvia Latvia has a very small merchant fleet (most Latvian ships operate under a foreign flag, there are no data on these . Study on Strategic Evaluation on Transport Investment Priorities under Structural and Cohesion funds for the Programming Period 2007-2013. investment priorities of structural and cohesion funds for the programming period 2007-2013. 1.3 The Country Report The strategic evaluation results