Approved by
Cabinet Order No. 518
of 12 July 2006

Refined by
Cabinet Order No. 140
of 10 March 2010

Transport Development Guidelines
2007-2013

(Informative Part)

Contents

INTRODUCTION

1. DESCRIPTION OF THE SITUATION

1.1. Situation in the Transport Sector in Latvia

1.1.1. Road Transport and Motor Roads

1.1.2. Rail Transport and Infrastructure

1.1.3. Port Activities

1.1.4. Airport Activities and Air Transport

1.1.5. Transit Development

1.1.6. Development of Public Transport

1.2. Analysis of Strengths, Weaknesses, Opportunities and Threats

1.3. Regulatory and Institutional Base of the Transport Policy

1.4. Transport Development Within the Context of the European Union

2. FORMULATION OF PROBLEMS, THE SOLVING OF WHICH REQUIRES THE IMPLEMENTATION OF A SPECIFIC GOVERNMENT POLICY

3. BASIC PRINCIPLES OF THE POLICY

4. POLICY OBJECTIVES

4.1. Overarching Objective

4.2. Sub-objectives

5. OUTCOMES, OUTPUTS AND INDICATORS

6. DIRECTIONS OF ACTIONS FOR THE ACHIEVEMENT OF POLICY OBJECTIVES AND RESULTS

7. FINANCING FROM THE STATE BASIC BUDGET AND EUROPEAN UNION FUNDS FOR THE IMPLEMENTATION OF THE TRANSPORT DEVELOPMENT GUIDELINES

8. PLANNING OF FURTHER ACTION

9. REPORTING AND ASSESSMENT PROCEDURES

10. LINK OF THE GUIDELINES WITH THE PRIORITIES SPECIFIED IN THE DEVELOPMENT PROGRAMMES AND STRATEGIES OF PLANNING REGIONS

Introduction

The Transport Development Guidelines (hereinafter - Guidelines) are a policy planning document, in which the basic principles, development objectives and priorities of the policy in the transport sector have been specified for the time period from 2007 to 2013.

According to the Rules of Order of the Cabinet, the Guidelines have been developed for the time period of seven years, which coincides with the planning period of the European Union financing.

The Guidelines have been developed on the basis of the long-term conceptual document Development Model of Latvia: Human-oriented Approach approved by the Saeima of the Republic of Latvia [the Parliament of the Republic of Latvia] on 26 October 2005, the results of the National Programme of Transport Development 2000-2006 (hereinafter - NPTD), the policy planning documents already developed in the transport sector, which include part of the time period 2007-2013, the transport policy document of the European Union - the White Paper, as well as the Lisbon Strategy.

The Guidelines have been co-ordinated with the action directions and the results to be achieved specified in the operating strategy of the Ministry of Transport, the National Development Plan 2007-2013 being presently developed and the National Strategic Reference Framework 2007-2013.

Upon developing planning documents for the implementation of the Guidelines, the Sustainable Development Guidelines of Latvia, approved by the Cabinet on 15 August 2002, the Uniform Strategy of the National Economy, approved by the Cabinet on 17 August 2004, as well as the Regional Policy Guidelines, approved by the Cabinet on 2 April 2004 and the objectives and priorities of the development of planning regions should also be taken into account.

The situation in the transport sector before the development of the Guidelines - in 2006 - is characterised in Chapter 1 of the Guidelines. The results of the implementation of the Guidelines and the changes arising therefrom in the transport sector in 2007 and 2008 have been compiled in the Informative Report On the Progress of Implementation of the Transport Development Guidelines 2007-2013 and the Necessity of Updating Thereof (Cabinet meeting of 30 June 2009 (Minutes No. 45, Paragraph 65)).

1. Description of the Situation

1.1. Situation in the Transport Sector in Latvia

An efficient and competitive transport system is one of the most substantial preconditions for ensuring the economic and social development of the State.

Over an extended period of time a relatively balanced transport network has evolved in the country, which in general ensures the flow of freights and passengers. Usually rapid changes in the transport infrastructure are accompanied by an increase or decrease in economic activities and in many cases - the standard of living of inhabitants.

During the preceding five years changes in the transport sector have manifested themselves by the following tendencies:

- the condition of motor roads and railway continued to deteriorate;

- the number of road vehicles rapidly increased, substantially increasing the load on motor roads;

- the number of road accident fatalities was still very high in comparison with other European Union Member States, however, starting from 2005 there was a tendency that the number of the persons who have died reduced;

- territorial narrowing of the railway infrastructure;

- regardless of the total increase in the turnover of freights at ports, the amount of higher added value freights reduced; and

- rapid increase in the turnover of passengers during the last two years in the international airport Rīga.

1.1.1. Road Transport and Motor Roads

In carriage of goods by road approximately 91% (in 2004 and in nine months of 2005) of the total amount of goods were formed by national carriage - timber, foodstuffs, household products and construction materials were dominating. Carriage of goods by road constituted approximately 44% of the total carriage of goods in the country. In comparing the turnover of goods, the part of the national carriage was approximately 32%. Such proportion almost did not change during the preceding five years. Two thirds of demand for transport services in the present stage depended on internal demand and one third was related to external demand - mainly they were transit services. Households used 4.5-6% of the amount of services provided by the transport sector. Mostly they were public transport services.

Accession of Latvia to the European Union provided carriers with free access to the market of the European Union and increased the efficiency of carriage because the customs procedures and the duration of the procedures for crossing the border had reduced. However, in order to fulfil the requirements of the European Union, the costs for carriage merchants, for carriage as a service and for drivers (excise duty, vehicle fee, technical inspections, licensing expenditure, permits) substantially increased.

In accordance with the study conducted by Latvijas Auto, the majority of drivers are in preretirement and retirement age, in turn, there are only 5% of the new drivers in the age up to 30 years. It shows that the change of generations does not take place in this field, and it might have very negative influence on the development of road transport in future.

A range of formalities related to border control on external borders and in ports increased (mandatory payments for veterinary control of transit goods, construction of the recognised veterinary border points and handling sites; more rigid restrictions in the field of handling and storage of goods).

The most intense flows of motor vehicles were on motor roads between the largest cities - Rīga - Ventspils, Rīga - Liepāja, Rīga - Daugavpils, Rīga - Bauska, Rīga - Rēzekne, Rīga - Jelgava, Rīga - Valka, Rīga - Pskov. The highest amounts of international carriage for road carriers of Latvia were to Russia and Germany.

The density of the motor road network of Latvia is 1.077 km per 1 km², which may be considered as sufficient, taking into account the number of inhabitants and the size of the territory. The basic network of motor roads, which includes almost all major State roads and has been identified as the Trans-European Network (TEN), and the network of other motor roads or motor roads not included in TEN, which ensure the link with the TEN network, is clearly pronounced in Latvia. The highest traffic intensity has been registered on the main streets of the capital Rīga and on major State motor roads on the access roads to Rīga. The most substantial increase in traffic intensity in subsequent years is anticipated on the major State motor roads, and it might reach 4-7% per year and on other roads - 2-3% per year. More rapid increase in intensity is anticipated near the big cities.

The main problems in the TEN network are related to the load-bearing capacity of the road surface and bridges - the roads were built from the 1960s to 1980s according to the norms that were in force at the time and that specified the maximum axle load of the vehicle at 10 t and the maximum laden weight of the vehicle at 36 t, however, the necessity of the present market, as well as the requirements of the European Union determine 11.5 t and 44 t accordingly. As a result such situation has emerged in separate sections that it is not possible to ensure the quality of motor roads, using simple methods of repair.

Another significant problem is the non-conformity of the motor roads with the traffic safety requirements. Substantial traffic flows are crossing the centres of populated areas. It is a particularly pressing problem in Saulkrasti, Ķekava, Iecava, Bauska, as well as the route - Rīga - Jēkabpils.

The traffic capacity of the major State motor roads and main streets of cities in most of the cases is sufficient, however, in many places it is very close to the maximum possible traffic capacity. Already at present the greatest problems in the largest cities are caused by the lack of multilevel intersections and unreconstructed level intersections, in which traffic is not channelled and intelligent system for traffic regulation is not ensured, forcing the drivers to lose more and more time in traffic jams. There is a substantial number of level rail crossings with high traffic intensity of motor vehicles and trains in the State, which reduces traffic safety and extends the movement time of the road transport.

The arrangement of the 1^st grade State motor roads takes place using the resources of the European Regional Development Fund (ERDF), however, it is not sufficient in order to make crucial improvements to the quality of motor roads - during the preceding five years the proportion of the motor roads in bad condition in the State network of motor roads increased on average by 10% and in general the quality condition of the motor roads kept deteriorating. In 2004 44% of motor roads with the black surfacing and 32% - with the gravel surfacing in the State were near disintegration.

These are the consequences of the insufficient financing for the maintenance of motor roads. On average the financing indicators for the maintenance of motor roads of Latvia are lower than in other countries and the maintenance costs of one km of motor roads constituted LVL 1 040 per year, for comparison this indicator is two times higher in Lithuania and three times higher in Finland.¹ At present the necessary works for renewal of the surfacing have not been performed in due time in 55% of the State motor roads. The existing insufficient level of financing for the maintenance and development of motor roads, upon the increase in the traffic intensity and the proportion of heavy freight vehicles, causes continuous disintegration process of the motor road network and uneconomical expenditure of the users of motor roads increase, as well as the number of traffic accidents becomes greater. The actual annual financing for the performance of works on State motor roads during the last years had been within the limits of 35-40 million lats. Approximately one half of this sum is planned for the everyday maintenance works (though it is less than a half of the amount specified in regulatory enactments) and only half - for the construction, reconstruction and periodic maintenance works. The most significant motor road development projects implemented during the time period from 2001 to 2005 were related to the performance of improvements (reconstruction of motor roads and bridges) in the route Via Baltica and in the East-West Corridor. At the same time it is anticipated that the increase in intensity on the major State motor roads until 2013 will be 4-7% per year.

The development of the motor road network in rural territories (or pagasti) is one of preconditions for balanced development of rural territories. Without paying attention to the arrangement of rural motor roads, gradually territories with encumbered traffic are forming and the accessibility is deteriorating. In rural local governments the earmarked grant of the State budget is the only source of financing for local government roads. In turn, in order for the cities to be able to renew and maintain the city street network, in which traffic intensity is significantly higher than in a rural area, local governments of cities also use the resources of the local government basic budget for the maintenance of streets. Earmarked grant will be distributed among local governments in accordance with the prospective Cabinet Regulation, Amount of the Part of the Earmarked Grant Assigned for the Financing and Development of Local Government Roads and Streets, the Procedures for the Distribution of the Earmarked Grant Among Local Governments, the Procedures for the Utilisation of the Earmarked Grant, the Procedures for the Control of Legality and Accuracy of Utilisation of the Earmarked Grant and the Procedures by Which Local Governments Provide Reports on the Utilisation of the Earmarked Grant, a draft of which was submitted to the Cabinet for examination (was announced on 2 February 2006 during the meeting of the State Secretaries), but, after analysis of the statistical data regarding actual resources utilised for the financing of local government roads and streets, it should be concluded that approximately twice the amount of these resources would be needed. It is one of the causes why such regions are formed, which are characterised by the outflow of inhabitants in working age. It hinders economic development of regions, as well as of the State of Latvia.

The State joint stock company Latvijas valsts ceļi [Latvian State Roads] has 926 bridges under the supervision thereof. 872 bridges are made of reinforced concrete, 14 - of stone, 21 - of metal and 19 - of wood. The total length of bridges is 31 103.97 m. Due to the insufficient financing during the last 10 years, technical condition of bridges on State roads has become dissatisfactory. Approximately 720 bridges have damaged waterproofing and carriageway elements and 195 bridges have damaged load-bearing constructions. In total the condition of 45% of bridges should be evaluated as bad. These data have remained unchanged since 2001. Repair would suspend the progress of damages and the potential reduction in the load-bearing capacity of bridges. At large culverts are in better condition, and serious repair works should be planned for only 20% of them. Programmes for repair and reconstruction of bridges are being implemented. The main attention is paid to the reconstruction of the bridges of the major State motor roads, restoration of which has to take place in accordance with the technical condition norms specified by the European Union. The majority of bridges to be reconstructed are located near Rīga, on Rīga bypass, as well as Rīga - Daugavpils, Rīga - Pskov, Rīga - Liepāja and other important motor roads. At present, upon rapid increase in the road transport flow, there is an insufficient number of places where the River Daugava can be crossed in Rīga city. It causes traffic jams on bridges, significantly influencing the traffic flows not only in Rīga city, but also in a wider territory.

As the amount of repair works is smaller than the ageing rate of bridges, technical condition of bridges continues to deteriorate. Different restrictions (load, size, speed of driving and distance) have been introduced on 68 bridges.

Thus, it should be noted that the maintenance and development of State motor roads is the main priority in the time period up to 2013. It is also related to the increase of the traffic safety level for cyclists. No definite action for the development of cycling has been intended in subsequent years, however, cycling issues are subject to the traffic safety measures - in performing reconstruction or construction of motor roads, the necessity to separate the traffic of cyclists and pedestrians from carriageways is being evaluated in accordance with the requirements of the standard LVS-190-2:1999. Also the routes developed by consultants are being evaluated, and they have been compiled in the project Cameral Demarcation of the EuroVelo Route Network in Latvia, developed in 2000.

1.1.2. Rail Transport and Infrastructure

An indicator of the economic development of Latvia is rail transport. The State joint stock company Latvijas dzelzceļš [Latvian Railway] is the largest carrier of rail freight, however, during the last years two private carriers - joint stock company Baltijas ekspresis [Baltic Express] and joint stock company Baltijas tranzīta serviss [Baltic Transit Service] - also have commenced activities, and the amount of freight carried by them has already reached 10% of the total amount.

Rail freight carriage constituted 55% of the total amount of carriage in the State and more than 80% was carriage of freight to the three largest ports of Latvia - Rīga, Ventspils and Liepāja, including from Russia (48.2%) and Belarus (37.4%) via the large junctions of Eastern Latvia in Daugavpils and Rēzekne. The main problems for successful development of freight carriage were caused by the dissatisfactory technical condition of the railway tracks and rolling stock.

In no country of the Western Europe the contribution of railway is as significant to the national economy as in Latvia, evaluating it according to such indicators as tax payments and investment in the gross domestic product (hereinafter - GDP). Due to the comparatively small distances national carriage is less developed, therefore, international carriage - 93% of the total amount - is dominating in freight carriage by rail.

The Ventspils-Jelgava-Krustpils-Rēzekne railway line is dominating in freight carriage, which is used for delivery of freight from industrial districts of Russia to Ventspils port. The development of freight carriage, which crosses the largest part of the State territory, may have the largest influence of the territorial development perspective. Upon increase in the amount of freight, the depreciation of the railway increases the danger of accidents, threatening cities and populated areas around the railway lines.

The main freight carried from the East to the West was oil and its products, coal, mineral fertilisers, chemical substances. Mainly foodstuffs and different household goods were carried from the West to the East. Small amount of freights - mainly timber, local energy resources and construction materials - were carried inside the State.

Upon development of ports of Russia, individual transit freight groups are being lost and the risk to lose also the existing external trade freight of Russia, which was traditionally transported through Latvia, particularly through ports of Latvia, has increased, therefore, the carriers of Latvia must develop new services, improve the efficiency and quality of services, to ensure competitive prices and to search for new clients in the carriage space of Eurasia. Competitiveness of freight carriage in the European market will largely depend on the electrification level of the infrastructure because it directly influences the efficiency of carriage. Similarly, it is necessary to increase the amount of container transport, as well as to develop freight orders of local governments because the part of national carriage in the total amount is very small.

Significant contribution to the economic development of the State - working places - is provided by the major junctions in Rīga, Ventpils, Liepāja, Daugavpils, Rēzekne, Jelgava. Almost all major merchants of Latvia receive raw materials for production by rail, thus, successful development of many industrial sectors depends on optimum operation of the railway.

The quality of the rail infrastructure is one of the most important factors, which influences the competitiveness of Latvia in the transit carriage market.

The total length of rails in Latvia is 4423.6 km; 12.6% of them are railway tracks of private use and 87.4% or 2717.7 km - of public use. At the same time, 142.7 km of the railway tracks of public use are in possession of district local governments and the manager of 2579.0 km is the State joint stock company Latvijas dzelzceļš. In 30% or 605 km of the major railway tracks of the 1^st and 2^nd category of strategic significance the amount of the serviced freights exceeded the norm, according to which reconstruction should be performed. Thus, in order to stop the deterioration of the rail infrastructure, each year capital repairs in length of not less than 65 km should be performed. 26.3% of the total length of railway lines are not equipped with traffic management systems corresponding to the safety standards of the European Union.

11% of all railway tracks have been electrified in Latvia, for comparison the average indicator of the European Union is 50%. Density of the railway network in Latvia is 36 m/km², but in the European Union - 47 m/km².

In order for the railway transport of Latvia together with ports to maintain the market position in international freight transport in the Baltic Region, it is necessary to continue the ongoing railway development projects, associated with infrastructure development and carriage safety improvement, and implement new projects. The majority of investments is intended for the development of the East-West Rail Corridor.

Within the scope of the VIA Baltica Spatial Development Zone Project, the European Commission and representatives of Finland, the Baltic States and Poland are jointly involved in the feasibility study of Rail Baltica. The essence of the project is to study the necessity to construct a high-speed railway line, corresponding to the European standards, from Tallinn via Latvia and Lithuania to Warsaw, therefore, the new railway would form part of the Helsinki-Berlin railway. Within the scope of the project it is planned to construct a completely new railway with the rail width of 1435 mm, which conforms to the European standards. The new railway will be intended for both passenger and freight carriage.

1.1.3. Port Activities

There are three large ports operating in Latvia (Ventspils, Rīga and Liepāja), the proportion of which in the total turnover of freight was 98.8%, and seven small ports (Engure, Lielupe, Mērsrags, Pāvilosta, Roja, Salacgrīva, Skulte). Also the territory of the Port of Ainaži was determined, however, it was not developed and hitherto the movement of ships was not possible. All three largest port of Latvia, particularly the Port of Ventspils, are explicit export ports - the amount of the freight consigned (mainly transit freight from Russia, Belarus and other states of the Commonwealth of Independent States (hereinafter - CIS)) exceeded several times the amount of the freight received.

Oil, oil and chemical products were dominating in the freight structure of the Port of Ventspils, and they were delivered mainly by rail from industrial districts of Russia. Up to 80% of the freight turnover of the Rīga Free Port was transit freight for consignment to or receipt from the CIS. The main freights in the Rīga Free Port were containers, different metals, wood, coal, mineral fertilisers, chemical freight, oil and foodstuffs. The amount of the freight consigned in the Port of Rīga increased - from 13 265 thous. t (in 2001) to 22 046 thous. t (in 2005), also in the Port of Liepāja - from 2762 thous. t (in 2001) to 3766 thous. t. (in 2005).

In 2005 in total 55 890 thous. t were consigned through ports of Latvia and 4152 thous. t were received. The Port of Rīga was dominating in relation to the amount of the received freight - 2384 thous. t. (in 2005). During the last years the amount of the received freight had a tendency to increase slightly because 1618 thous. t. of freight were received in 2001. The amount of freight received in the Port of Ventspils also changed by years from 396 (in 2001) up to 829 thous. t. (in 2005), and a positive tendency was observed. The development of the Port of Liepāja should also be noted where during the time period from 2001 to 2005 the amount of the received freight increased from 498 thous. t. to 742 thous. t. and in small ports - from 34 to 197 thous. t. during the same period of time.

In comparing the freight turnover in the ports of the East coast of the Baltic Sea it should be concluded that for the first time in the last five years Ventspils lost its leading role and in 2005 was in the fourth place after Saint Petersburg, Primorsk and Tallinn. The turnover in the Port of Rīga increased and in 2005 it was in the fifth place (in 2000 - in the sixth place), however, at the time Būtiņģe and Primorsk had not been operating yet. The amount of freight in Liepāja did not increase substantially during the preceding years.

Although the total freight turnover at the largest ports of Latvia kept increasing, negative tendencies were observed in individual freight groups, which were related to the increase in competition among the ports of the Baltic Sea Region. Particularly the amount of freights of higher value (general cargoes, oil etc.) reduced, which attested to negative tendencies in the development of ports.

The small ports of Latvia should be noted, in which the amount of the consigned freight increased three times during the preceding years and constituted 1044 thous. t. in 2005. The increase in the freight turnover of small ports had a substantial significance in the development of the neighbouring regions - roads were arranged, new working places were created, economic development was promoted. Commercial freight was handled at the ports of Skulte, Mērsrags, Salacgrīva and Roja. The ports of Engure, Pāvilosta and Lielupe² operated only as fishing and yacht ports, ensuring only handling of the fish caught.

The previous organisation of sea passenger transport has been inefficient in Latvia. Apart from the freight-passenger line to Germany, a ship specially intended for passenger carriage in line to Stockholm was operating in the Port of Rīga, however, it discontinued its operation in the third quarter of 2005.

There are several freight-passenger lines operating in the port of Ventspils at present, which offer passengers an opportunity to travel by ship to Germany and Sweden. Although during the last years an increase in the number of the passengers carried was observed, in general it was small (11.18 thousand in 2004 in Ventspils and 15.53 thousand in Liepāja). In May 2005 a new line from Ventspils to Montu on Saaremaa Island in Estonia was opened.

The main problem, which caused the low demand in carriage of passengers by sea in the Port of Rīga, was insufficient demand.

The majority of ports are located along the coast of the Gulf of Rīga, and there are three ice-free ports along the coast of the Baltic Sea - the Port of Ventspils, the Port of Liepāja, as well as Pāvilosta. The work of the majority of small ports of the Gulf of Rīga, on average for 1-2 months, is hindered by ice.

In order to involve Latvia more successfully in international trade and transit circulation, to promote the attraction of investments and the development of production, as well as the creation of new working places, the large ports were granted the status of special regime with tax relief. The ports of Ventspils and Rīga were specified the status of free port, but the Port of Liepāja became a part of the special economic zone of Liepāja.

The second largest potassium salt handling terminal in the world is operating in the Port of Ventspils. Up to 20% of the world trade amount of potassium salt are handled there. The largest crude oil and oil product handling terminal in the Baltic States and terminal for handling of liquid chemical products with three quaysides are located in the port. The maximum permissible draught of oil tankers is 15 m. Moreover, terminals of usual freights are functioning in Ventspils where metals, timber, fruit, sugar and other products are handled. The Port of Ventspils is able to service ships with the load capacity up to 150 000 DWT and the permissible length up to 270 m.

The Port of Rīga is an important multipurpose port among the states of the Baltic Sea. The port contains a container terminal, timber terminals, passenger and ferry terminals, liquid cargo - oil products, chemical substances, liquified gas - terminals and bulk cargo terminals. The (estimated) freight handling capacity of terminals of the Free Port is 45 mill. t per year. The Port of Rīga links its development to specialisation in processing of container freights. At present the development of the Port of Rīga is hindered by insufficiently developed access roads to the major motor roads and State motor roads. The Port of Rīga planned to perform reconstruction of the container port so that it would be the largest one in the Baltic Sea in this field.³

The Port of Rīga is the main passenger port in Latvia. However, the Port of Rīga has not sufficiently used the possibilities of passenger servicing, passenger traffic from Rīga is not adequate to the possibilities of Rīga as metropolis and the centre of the Baltic States. The number of passengers is significantly lower than in the ports of Tallinn and Klaipeda.

Mostly general cargoes - timber, metals, as well as bulk cargoes and liquid cargoes - were being handled in freight handling terminals of Liepāja. The Port of Liepāja services ships, the draught of which is up to 9.5 m and load capacity - 40 000 DWT. Until 2005 the port capacity ensured handling of freights in the amount of 7.5 mill. t/per year. It is planned to increase the capacity of handling amount of the port by almost two times by significantly reconstructing the port infrastructure. The Port of Liepāja has significant plans for the development of sea passenger transport - infrastructure for the receipt of passengers has been created in the passenger terminal.

Only ships with the draught up to 5.5 m were serviced in the small ports. As the amount of freight handling was small, the limited income of the ports of Engure, Lielupe and Pāvilosta hindered investments in reconstruction of hydrotechnic structures and modernisation of infrastructure, which hindered the functional development of these ports.

1.1.4. Airport Activities and Air Transport

Although during the last 10 years continuous, although relatively small increase in the number of passengers was observed, it could not be anticipated that the international airport Rīga would become a significant air traffic centre of the European Union in the subsequent 15 years. In order to achieve a crucial change of the situation, in 2004 the payments for air navigation services and services provided by the airport Rīga were substantially reduced, passenger departure fee was revoked and differentiation of the costs of services of the airport Rīga was introduced according to the number of passengers carried by each airline during a year. As a result of the price policy implemented by the Ministry of Transport, the market of air services of Latvia became much more attractive, and a range of new foreign airlines joined it, thus expanding the possibilities of consumers to choose and ensuring fair competition. Both local and foreign airlines revised their price policy. Accordingly the price of air tickets reduced significantly and air services became available to a wider range of inhabitants. The number of passengers and aircrafts serviced by the State joint stock company International Airport "Rīga" (hereinafter - airport Rīga) increased significantly and the airport convincingly became the dominating one among the airports of the three Baltic States. In 2004, in comparison with 2003, the number of passengers serviced by the airport Rīga increased by 49%, but in 2005 the number of passengers serviced reached 1.877 mill.

In 2004 regular flights from Rīga were performed already in 29 routes. In 2005 three new flight routes were opened. For comparison, in 2002 regular flights from Rīga were performed only in 16 routes. The national airline of Latvia Airbaltic was the first airline of the new Member States of the European Union to use the advantages of the free air service market of the European Union and established its representation office in Lithuania, and commenced regular flights from Vilnius in 2004. In 2005 regular flights in the first domestic flight route Rīga - Liepāja were commenced.

The development of services was promoted by the fact that all requirements of the European Union in the field of aviation were fulfilled so that Latvia could have access to the free air service market of the European Union, and preconditions were created so that commercial aviation activities of Latvia could operate and compete successfully in the air service market of the European Union. Infrastructure objects of the airport Rīga and the State joint stock company Latvijas Gaisa Satiksme [Latvian Air Traffic] were reconstructed and modernised according to the requirements of the European Union in a timely manner. Also possibilities to defend the interests of Latvia in the process of development and adoption of legal enactments of the European Union, as well as during modification of air traffic contracts of the European Union and the third countries; the intergovernmental contracts entered into with the third countries, which created preconditions for expansion of the regular flight network, were the factors promoting development.

As a result of the policy implemented in the field of aviation new air carriers entered the air service market of Latvia, thus creating possibilities for expansion of the route network of direct and connecting flights, which is important for the development of commercial activity and tourism.

Since 1998 freight carriage takes place only from the Rīga airport. In general carriage of freight by air does not have a significant role in the national economy.

At present three airports are certified in Latvia - the airport Rīga belonging to the State and two airports, Liepāja and Ventspils, belonging to local governments. 99% of flights are performed from the airport Rīga. The passenger flow in airports Liepāja and Ventspils is low and income from primary activity do not cover the expenditure related thereto. The first general aviation airfield Ikšķile has also been certified.

During the last years substantial changes took place in the field of aviation in Latvia. Infrastructure of the State joint stock company Latvijas Gaisa Satiksme [Latvian Air Traffic] (hereinafter - LGS) and the airport Rīga was reconstructed and modernised according to the requirements of the European Union in a timely manner, which increased the traffic capacity of the airport up to 2 mill. passengers a year and allowed to service 500 passengers an hour.

Upon increase in the number of passengers and volume of freight, it is necessary to receive aircrafts with larger passenger and freight capacity, which cannot be ensured at present because the existing runway is not sufficiently long. The existing length of runway makes it impossible to ensure the functions of the merchant country of NATO forces in good quality.

1.1.5. Transit Development

Geographical location of Latvia along the East coast of the Baltic Sea with its ice-free ports and infrastructure of motor roads and railway, which has been largely created for the export needs of the resources of Russia and other CIS states and for the import needs of other goods, as well as the modern logistical tendencies in the space of Eurasia, serve as a precondition for the provision of efficient transit services and the increase in export of services of Latvia, contributing largely to the balancing of the external trade balance of the State. The range of transit services comprises services of ports, railway, road carriers, customs warehouses and brokers, as well as ship agents, forwarding agents and operators of oil product pipelines. They all operate in the conditions of international competition and mainly compete with other Baltic States, Finland and Russia. Moreover, they very largely depend on the foreign policy situation of the State, relationship with neighbouring countries, tax norms and norms of customs law, as well as actions of other services working in the border control.

Regardless of reduction of the part of transit services in the sector, the proportion thereof was still relatively high, substantially influencing the total output of the sector. Changes in external demand also created the main fluctuations in the sectoral dynamics. They were based on the transport policy of Russia with the objective of directing transit freights through its ports. Rail tariffs in the territory of Russia were two to three times higher for the direction to Latvia than to the ports of Russia. No improvements in facilitation of border-crossing were performed, which created long lines at the Latvia-Russia border; the number of permits for carriage by road was consequently restricted for carriage of Latvia. After the building of a new oil terminal in Primorsk, the oil transit flow by main pipelines in the direction of Latvia was also cut off. There is also a risk that the oil product flow by main pipelines could also be cut off.

In transit services each 10 million tons give at least 1% GDP. Therefore, it is within the interests of Latvia to recover the lost amounts of freights and to attract new ones. In such a way the transit flow could be increased by at least 30% during the subsequent three or four years.

According to the tendencies of the preceding years in the transport sector in the space of Eurasia, particular attention should be paid to the development of new services and entering of new markets, improving the qualification of logistics specialists and developing new possibilities for the creation of logistics and distribution services and infrastructure, which provide substantially larger contribution to the economic development of Latvia.

1.1.6. Development of Public Transport

In general the functions of the public transport organisation in Latvia are implemented by 34 State administrative institutions of different levels - the Ministry of Transport, district councils and city councils. Taking into account this principle of shared competence, sometimes such situations arise when the common principles for the creation of route network are not observed in the creation of route network, causing also substantial differences in the quality of services in different regions of Latvia. It is necessary to determine a uniform standard for public transport services, perceiving it as the requirements put forward to the access to the route network (density of the route network and intensity for specific territories, regulatory, price level, compatibility of routes (transfer possibilities)), to the merchant (personnel and quality management system in a commercial company, the range of services to be performed, equipment etc.) and to the service (the type and possibilities of ticket sale, requirements for equipment of vehicles).

Regardless of the low development rate of the quality of services, in 2004 the number of the passengers who had used services of the suburban public transport exceeded the indicators of 2000 by 20% (on average by 10% in the public transport), and each year the number of passengers who had used public transport services continues to increase in the amount of 2-4%.

Approximately one third of the passengers carried in suburban traffic are carried in domestic carriage of passengers by rail. In separate regions (particularly the electrified railway in the vicinity of Rīga) railway is an integral part of the public transport system. In case of cessation of the traffic of electric trains, other types of transport would not be able to provide adequate services.

1.2. Analysis of Strengths, Weaknesses, Opportunities and Threats

Strengths

1. Advantageous geographical location in the market of international transport services.

2. Optimum layout of the motor road and rail network.

3. Rapid development of private providers of transport and logistics services.

4. Flexible, experienced labour force and comparatively low costs.

5. Experience of transport operators of Latvia in the market of Eastern neighbouring countries.

Weaknesses

1. Insufficient quality of the transport infrastructure (including lack of city bypasses of good quality, insufficiently good condition of access roads to ports etc.).

2. Low traffic safety level on motor roads and streets.

3. Insufficient traffic capacity of railway lines in individual sections of the major lines.

4. Low load of the rail infrastructure of regional significance, which results in high utilisation cost of the infrastructure.

5. Insufficient amount of private investments, which slows down the development of the infrastructure.

6. Insufficiently developed public transport system.

7. Relatively low remuneration for the persons working in the sector, policies for the preparation and attraction of the staff and specialists have not been determined.

8. Applied research, on which taking of decisions could be based, is not supported.

Opportunities

1. Stable economic development of the State (rapid GDP increase rate).

2. Development of the transport system of Latvia in the joint transport system of Eurasia, which has been co-ordinated with the long-term objectives of the State.

3. Possibility of using the financial resources of the European Union for the development of transport.

4. Use of the modern IT (traffic organisation in cities, information regarding the condition of roads, GPS, traffic management etc.).

5. Increase in the competitiveness of transport services and access to the European Union market of transport services.

6. Modernisation of traffic networks, improvement of the quality and competitiveness thereof.

7. Increasing of the traffic safety level.

8. Infrastructure, including oil and oil product pipelines are used efficiently for transit freight deliveries to the ports of Latvia and in other directions.

9. Rapidly growing market of carriage of passengers.

10. Development of the airport Rīga as the air traffic centre of European significance.

11. Promotion of the development of less developed State regions and development centres.

Threats

1. Measures for increasing the traffic capacity of railway in direction to inland border crossing points of Latvia are not planned and performed on behalf of Russia.

2. Retraining and migration of the labour force due to the low remuneration.

3. Dependence of the transit freight flows on external unforeseeable political and economical factors.

4. Danger caused by carriage of dangerous goods.

5. Terrorism.

1.3. Regulatory and Institutional Base of the Transport Policy

Policy documents:

1) the National Development Plan 2007-2013 (handed over for public discussion);

2) the National Strategic Reference Framework 2007-2013, approved by the Cabinet on 31 January 2006;

3) the National Lisbon Programme of Latvia for 2005-2008, approved by the Cabinet on 13 October 2005;

4) the Long-term Economic Strategy of Latvia, approved by the Cabinet on 17 July 2001;

5) the Sustainable Development Guidelines of Latvia, approved by the Cabinet on 15 August 2002;

6) the Uniform Strategy of the National Economy, approved by the Cabinet on 17 August 2004;

7) the Regional Policy Guidelines, approved by the Cabinet on 2 April 2004;

8) the National Programme of Transport Development (1996-2010), approved by the Cabinet on 14 November 1995, and the update thereof National Programme of Transport Development (2000-2006), approved by the NPTD Co-ordination Council on 25 February 2002;

9) the Programme for the Preservation and Development of the State Motor Road Network (2000-2015), approved by the NPTD on 25 February 2002;

10) the Guidelines for Arrangement of the State Second Grade Motor Roads, approved by the Cabinet on 30 November 2004;

11) the Guidelines for the Development of the Public Transport for 2005-2014, approved by the Cabinet on 29 September 2004;

12) the Concept for the Creation of the State Route Network Agency, approved by the Cabinet on 7 September 2005;

13) the Concept for the State Contract of Carriage of Passengers by Rail for 2007-2016, approved by the Cabinet on 4 November 2005;

14) the Concept On Solving Issues Related to the Co-ordination, Safety and Protection of Carriage of Dangerous Goods, approved by the Cabinet on 6 December 2005;

15) the Programme for the Development of the State Major Motor Roads of Latvia for 2007-2013 (co-ordination among the structural units of the Ministry of Transport is taking place); and

16) the Strategy for the Daily Maintenance of State Motor Roads (2007-2014), approved by the Ministry of Transport by Order No. 160 of 28 September 2005.

Laws:

1) Road Transport Law;

2) Road Traffic Law;

3) Law On Motor Roads;

4) Law On Annual Fee for Vehicles;

5) Railway Law;

6) Carriage by Rail Law;

7) Law On Aviation;

8) Maritime Administration and Marine Safety Law;

9) Maritime Code; and

10) Law On Ports.

The Ministry of Transport is the governing State administrative institution in the transport and communications sector, which develops draft legal acts regulating the sector and draft policy planning documents, ensures the implementation of the policy in the State administrative institutions subordinate to the Ministry and in capital companies, in which the Ministry is the holder of capital shares.

The transport policy in co-operation with the Ministry is implemented by:

the State institution of direct administration Road Transport Inspectorate;

the State limited liability company Road Transport Administration;

the State joint stock company Latvian State Roads;

the State joint stock company Road Traffic Safety Directorate;

the State institution of direct administration State Railway Administration;

the State institution of direct administration State Railway Technical Inspectorate;

the State joint stock company Latvian Railway;

the State joint stock company Maritime Administration of Latvia;

the State institution of direct administration Air Accident and Incident Investigation Bureau; and

the State agency Civil Aviation Agency.

Also other ministries (the Ministry of Economics, the Ministry of Finance, the Ministry of the Interior, the Ministry of Health, the Ministry of Welfare, the Ministry of Education and Science, the Ministry of Environment, the Ministry of Regional Development and Local Government), regional development agencies and local governments are involved in the implementation of the policy.

1.4. Transport Development Within the Context of the European Union

The White Paper is a European transport policy document for 2010, accepted in 2001. The most important objectives to be achieved and measures provided in the White Paper are:

1) shifting the balance between modes of transport:

- revitalising the railways (mainly in relation to carriage of goods);

- improving quality in the road transport sector (tariffs, protection of carriers);

- striking a balance between growth in air transport and the environment; and

- development of intermodal transport (Marco Polo project);

2) eliminating bottlenecks: Trans-European network:

- creation of multimodal transport networks giving priority to carriage of freight by rail;

- high-speed network for passengers (railway);

- major infrastructure projects;

- traffic management (Galileo project); and

- promotion of maritime and internal waterway transport (motorways of the sea, safety of maritime traffic etc.);

3) creation of fair and impartial payment system for the users of infrastructure;

4) placing users at the heart of transport policy:

- improvement of road traffic safety;

- recognising the rights and obligations of users;

- intermodality in carriage of passengers;

- development of urban transport of high quality; and

- research development;

5) globalisation effects:

- managing the globalisation effects (International Maritime Organization (hereinafter - IMO), International Civil Aviation Organization (hereinafter - ICAO), etc.); and

- determination of medium and long-term environmental objectives oriented towards sustainable development.

In 2005 mid-term evaluation of the White Paper took place, after which the most important areas in the development of transport in Europe were determined for the subsequent five years, including implementation of priority projects of infrastructure, creation of multimodal transport networks giving priority to carriage of freight by rail, creation of high-speed network for passengers, traffic safety, ensuring traffic management (Galileo project), promotion of maritime and inland waterway transport (motorways of the sea, maritime traffic safety, etc.), ensuring intermodality in carriage of passengers, development of urban transport of high quality.

In accordance with the Lisbon Strategy, the objective of implementation of which is to make the European Union the most competitive participant in the global market, Latvia has developed the National Lisbon Programme of Latvia 2005-2008, in which the arrangement of the transport infrastructure has been specified as one of investments and factors necessary for the creation of attractive environment. The European Commission has marked this very aspect as one of the strengths of the National Lisbon Programme of Latvia (Progress Report of the European Commission of 25 January 2006 on Lisbon Strategy). Moreover, the Lisbon Strategy brings forward investments in education, research, innovations as one of the main fields of action, which are important to be ensured also in the transport sector.

The solution to the transport problems of Latvia largely fits in the general implementation of the European Union transport policy, bringing forward the improvement of the traffic safety, the development of the public transport, the preservation of the significance of rail transport, the promotion of environmentally-friendly transport by arranging motor roads, as well as the improvement of education and qualification of transport professionals in order to improve their competitiveness in the labour market of Europe, as the most important sectors.

2. Formulation of Problems Requiring Implementation of Definite Government Policy

It is necessary to specify the transport development policy more precisely because there is no policy document, in which the objectives and results to be achieved in the whole transport sector for the time period from 2007 to 2013 had been aggregated. Upon analysing the situation in the transport sector, the following should be distinguished as the main blocks of the problems to be solved:

- the quality of infrastructure and the traffic safety, which would ensure the sustainability of the transport system,

- passenger and freight transport services of good quality accessible to the inhabitants and merchants of Latvia, which would ensure the mobility of people,

- maximum export of transport and logistics services, which would ensure substantial income to the State,

- education, research and co-ordination thereof with the ministries of other sectors and planning regions, which would ensure taking of more justified decisions, as well as professional sectoral specialists.

All these aspects have not been completely reflected in the policy planning documents in effect at present, moreover, the operation period of several documents expires in 2006:

1) in 2006 the operation period of the updated National Programme of Transport Development (2000-2006) expires;

2) a range of policy planning documents in the transport sector has been adopted, the operation term of which exceeds 2006 (Guidelines for the Development of the Public Transport for 2005-2014, Guidelines for the Municipality Support to Arrangement of the State Second Grade Motor Roads, Concept for the State Contract of Carriage of Passenger by Rail for 2007-2016, Concept for the Creation of the State Route Network Agency, Concept on Solving Issues Related to the Safety and Protection of Carriage of Dangerous Goods);

3) activities for the improvement and accessibility of transport infrastructure, as well as the development of the transport system, have been specified in the operational programmes of the National Strategic Reference Framework (measure Large-scale Transport Infrastructure Improvements and Development, which includes the following activities: Improvement of TEN Motor Road Network, Reconstruction and Development of TEN-T Rail (development of the infrastructure for the East-West rail corridor and Rail Baltica), Development of the Infrastructure of the Large Ports, Development of the Infrastructure of Airports, Improvements of Urban Infrastructure for Linking with TEN-T, Sustainable Development and ERDF measure Development of Accessibility and Transport System, which includes the following activities: Arrangement of the State Motor Roads of the First Grade, Arrangement of Transit Routes in Urban Territories, Improvements of the Traffic Safety in Populated Areas, Improvement of the Infrastructure of the Small Ports);

4) there are fields, in which the major development directions in general (except the large infrastructure projects) have not been specified since 2007 (railway, ports, aviation);

5) accession to the European Union determines the necessity to co-ordinate the State policy with the European Union policy (the White Paper, Lisbon Strategy); and

6) the necessity to co-ordinate the theses included in the National Development Plan, the National Strategic Reference Framework, as well as other policy planning documents of the national economy regarding the necessity to develop transport, with the sectoral policy planning document.

3. Basic Principles of the Policy

1. Sustainability principle - the development of transport should ensure mutually balanced and concordant economic, environmental and social sustainability.

2. Integration and co-operation principle - the transport policy is created, taking into account the European transport policy and ensuring the provision of competitive services. Moreover, in a sense it may be a cross-sectoral area of activity to be created in co-operation with ministries of other sectors, planning regions, local governments, social partners.

3. Principle of openness and "transparency" - the openness and transparency specified in legal acts is observed during the development and implementation of any plans and projects.

4. Decentralisation (subsidiarity) principle - transfer of the competence from a higher level of administration to a lower level of administration.

5. Principle of mobility and accessibility - the transport policy should ensure accessibility and the free movement possibility, ensuring adequate infrastructure, traffic safety and services for acceptable prices.

6. Use of the modern IT - in planning the development of all modes and sectors of transport, the possibilities of the use of IT should be evaluated in order to achieve as high level of traffic safety as possible, the convenience of the users and providers of transport services and the efficiency of the services provided.

7. Principle of succession and co-ordination - the introduction of a policy accepted by the government and mutual co-ordination of policy planning documents is ensured in planning.

8. Principle of financial possibilities - in planning the measures for the development of transport, the possibilities of the use of the resources from the State and local government budget, financial resources of the European Union, as well as the possibilities of public and private partnership, are observed.

4. Policy Objectives

4.1. Overarching Objective

Competitive transport infrastructure of good quality, which has been integrated in the common transport system of Eurasia, environment for commercial activities, safe traffic, and transit, logistics and public transport services of good quality, accessible to everyone.

4.2. Sub-objectives

1. Comfortable and safe traffic in the State motor road and rail network, which conforms to the demand and the financial possibilities.

2. Efficient public transport services, which conform to the public interests.

3. Provision of the maritime transport safety in accordance with international standards.

4. Continuously increasing export of transport and logistics services, the traffic capacity of ports corresponding to the demand, provision of competitive services in ports and in the chain of the transport involved.

5. Dynamic air transport system, which ensures increased contribution to the national economy of Latvia. Rīga as the air traffic centre for direct and transit passengers. The development of regional airports supported as much as possible.

5. Outcomes, Outputs and Indicators

Table 5.1. Results to be Achieved in the Transport Sector

Result	Indicators
1.1. Outcome
State motor roads and city transit streets have been arranged in serviceable level (the proportion % of the State motor roads in at least satisfactory condition)	Major State motor roads in at least satisfactory condition - 62%
	State regional motor roads in at least satisfactory condition with asphalt surfacing - 49%
	State local motor roads in at least satisfactory condition with asphalt surfacing - 59 %
	State regional motor roads in at least satisfactory condition with gravel surfacing - 63 %
	State local motor roads in at least satisfactory condition with gravel surfacing - 64 %
Outputs:
1.1.1. TEN-T (major State) motor roads have been constructed and reconstructed, applies also to the outcome referred to in Paragraph 1.2 of this Table	103.9 km have been constructed and reconstructed (including 47.9 km - the project Jēkabpils-Varakļāni terminated in 2009)
1.1.2. Regional motor roads have been arranged, applies also to the outcome referred to in Paragraph 1.2 of this Table	330 km have been reconstructed
1.1.3. Urban transit streets have been reconstructed, applies also to the outcome referred to in Paragraph 1.2 of this Table	20 km have been reconstructed
1.1.4. Urban traffic safety has been improved, applies also to the outcome referred to in Paragraph 1.2 of this Table	100 projects for improvement of urban traffic safety have been implemented
1.1.5. The infrastructure of the large cities has been improved for a link with TEN-T	Two projects have been implemented
1.2. Outcome
Road traffic safety has been increased	Reduction in the number of road accident fatalities in comparison with 2001 - 70%
Outputs
Outputs have been specified in the Road Traffic Safety Programme for 2007-2013
1.3. Outcome
Train speed has been retained, preventing restrictions of technical operation	Average technical movement speed of freight trains 42.8 km/h
	Relative level of railway traffic accidents (this level is the number determined for each particular EU country. It is reviewed once every three years. At present 5.03x10-9 is specified for Latvia. The referred to level is calculated by the European Railway Agency)
Outputs
1.3.1. TEN railway tracks have been constructed,	Railway tracks in length of 52 km have been constructed,
TEN railway tracks have been reconstructed	railway tracks in length of 260 km have been reconstructed,
1.3.2. Modernisation of the train movement control system and the rolling stock Hot-box detection system of the East-West Rail Corridor has been performed	Modernisation of the train movement control system of the rail corridor - 100% of the amount provided for in the project (to be terminated in 2010)
	Modernisation of the system for detection of overheated boxes of the rolling stock - 100% of the amount provided for in the project (to be terminated in 2010)
2.1. Outcome
Access of passengers with special needs to the services of the public transport has been ensured, by adapting busses, railway stations	The proportion of busses adapted to passengers with special needs in regional carriage of interurban significance - 10%
	The proportion of busses adapted to passengers with special needs in regional carriage of local significance - 5 %
	The proportion of railway stations adapted to passengers with special needs - 5%
Outputs
2.1.1. Supervision of the fulfilment of contractual liabilities of the providers of public transport services has been performed, applies also to the outcome referred to in Paragraph 2.2 of this Table	The proportion of the inspected carriers (%) from the total number of carriers - 15% (for interurban carriers - 100%)
	The proportion of the surveyed runs (%) from the total amount of services - 10%
	The number of examinations of the utilisation of finances - 15% (for interurban carriers - 100%)
2.2. Outcome
All inhabitants have been provided with a possibility to get to the municipality centre, to attend educational institutions, to get to workplaces and State and local government institutions during their regular working hours, using public transport	The proportion of rural territories where at least two runs a day are ensured, which connect rural territories and the municipality centre - 100%
	The proportion of municipalities where at least two runs a day are ensured, which connect municipalities and the centre of the region or the capital - 100%
Outputs
2.2.1. The interurban route network has been maintained	Yes
2.2.2. The regulatory base in the public transport sector services has been arranged	Yes, until the end of 2010
2.3. Outcome
The proportion of carriage of passengers by rail in the total amount of carriage of passengers has been increased	The proportion of the number of rail passengers in the total amount of carriage of passengers - 8%
Outputs
2.3.1. The number of the new electric trains and diesel-engine trains purchased	Seven diesel-engine trains, 34 electric trains
2.3.2. The number of cities (outside Rīga), in which the system for carriage of passengers by trams has been improved	Two cities (Daugavpils, Liepāja)
3. Outcome
Admission to the White List of the Paris Memorandum of Understanding (PMoU)	The number of Latvian flag ships detained in foreign states versus the number of inspections (%), striving for reduction in the transition factor from 0.15 to 0 or negative (condition for inclusion in the White List)
4.1. Outcome
Increase in the turnover of transit freights in ports of Latvia is more rapid than in competitive ports	Increase in the turnover of transit freights - 10%
	Increase in the turnover of container freights and ro-ro freights - 20%
Outputs
4.1.1. Measures for popularisation of transit and logistical possibilities have been implemented, applies also to the outcome referred to in Paragraph 4.2 of this Table	The number of international exhibitions, in which the ports of Latvia and undertakings related to transit business are participating with national stands - five a year
	The number of trade missions and seminars, in which the ports of Latvia and undertakings related to the transit business are participating in the countries of Asia and the Far East - two a year
	The number of the marketing events and informative materials of the ports of Latvia and transit services - two a year
4.1.2. The infrastructure of ports has been improved	The number of the large ports, in which access roads have been improved in 2010 - two (in Ventspils, Liepāja)
	The number of the large ports, in which investments in improvement of accessibility and hydrotechnic structures have been made - three
	The number of the small ports, in which infrastructure has been improved - three
4.1.3. The project of the port information system has been implemented	Yes
4.2. Outcome
Increase of distribution services to other EU Member States	Increase in the collected customs tax - by 30%
Outputs
4.1.1. applies also to the outcome referred to in Paragraph 4.2 of this Table
4.3. Outcome
More rapid border crossing for freight road transport on the border Latvia-Russia	The average duration of standing on the border does not exceed twenty four hours
Outputs
4.3.1. Electronic control of the line has been introduced	Yes
4.3.2. Directing of the line of freight road transport to the parking lots next to the Terehovo BCP has been ensured	Yes
5.1. Outcome
Rīga - dynamically growing air traffic centre of the Baltic Region and European significance	The number of the passengers serviced at the airport in 2013: 6.8 million passengers (including 5.3 million passengers of the national airline)
	The number of transit and transfer passengers serviced at the airport in 2013: 3.75 million passengers (including 3.74 million passengers of the national airline)
	Entering of five new airlines in the airport
	Introduction of 20 new flight routes
Outputs
5.1.1. The infrastructure of the international airport Rīga has been improved	In accordance with the growth plans of the national airline the capacity for servicing of passengers will be increased by 10 million by 2013
	Expansion and modernisation of the runway and apron of the international airport Rīga has been performed in order to ensure the servicing of the passenger flow planned in 2013
5.1.2. Bilateral intergovernmental agreements on air traffic have been entered into	14 new agreements have been entered into
5.2. Outcome
Such safety level of flights has been ensured, which conforms to the international standards	The safety level of flights is not lower than the average level of the EU countries (the number of serious incidents per unit of carriage)
Outputs
5.2.1. Aviation accidents and incidents are investigated in good quality and in due time, the actual causes of aviation accidents, incidents and mishaps are determined		100% of the total number of incidents and accidents
5.2.2. Introduction of technical conformity and safety standards in the field of carriage by air has been ensured		10 certified airlines
		14 certified airfields
		3 certified providers of air navigation services
		11 certified organisations of technical maintenance
		9 certified organisations for the maintenance of airworthiness
5.3. Outcome
The development of regional airports (Liepāja, Ventspils, Daugavpils) has been promoted		Legal base has been prepared, which allows regional airports to apply to the Cohesion Fund projects and to develop the infrastructure of airports
Outputs
5.3.1. Construction and/or reconstruction of the infrastructure performed in airports		Upon implementation of all conditions (applications have been submitted, the necessary co-financing has been ensured), new infrastructure of regional airports has been constructed or the existing one has been reconstructed (depending on the activity applied and supported in the selection application)

6. Directions of Actions for the Achievement of Policy Objectives and Results

In order to achieve the objectives put forward, which conform to the requirements of policy planning documents of the national and EU level, the following directions of actions should be anticipated:

1) improvement of the quality of the infrastructure:

- maintenance and development of motor roads;

- modernisation of the railway;

- development of port infrastructure (including access roads); and

- expansion of the international airport Rīga and development of regional airports;

2) raising the level of road safety:

- co-ordination of the road traffic safety measures; and

- co-ordination of safe handling of dangerous goods;

3) organisation of the public transport services in the State and regional bus and train routes of local significance of the route network;

4) promotion of transit services:

- elimination of barriers for the development of transit and logistical market;

- popularisation of State and transit services;

- searching for new markets;

- introduction of new technologies and services; and

- raising of qualification of specialists;

5) creation and implementation of the transport policy on the basis of studies and professional specialists.

7. Financing from the State Basic Budget and European Union Funds for the Implementation of the Transport Development Guidelines

Table 7.1. The Anticipated Financing for Implementation of Directions of Actions

(millions of lats)

	2007	2008	2009	2010	2011	2012	2013	Financing from EU funds available for the time period 2007-2013
Improvement of the quality of the infrastructure
State Road Fund	194.3	235.8	121.8	89.7*	98.7*	0*	0*
incl. arrangement of State local motor roads	12.0	12.0	0	0	0	0	0
Development of motor roads (CF, ERDF)	77.5	70.9	40.2**	57.2***	14.5	0	0	426.9
Modernisation of the railway (CF)	16.8	16.0	28.1	18.5	0	0	0	91.7
Development of port infrastructure (including access roads) (CF, ERDF)	6.5	6.5	7.1	5.3	0	0	0	117.6
Expansion of the international airport Rīga and development of regional airports (CF)	4.0	5.3	0	0	0	0	0	51.7
Studies (CF, ERDF, TEN-T)	1.5	0.4	2.9	2.2	0.7	1.9	0	0
Public transport (ERDF, CF)	0	0	0	0	0	0	0	114.1
Development of the Public Transport System
Grants for covering of losses for the providers of the public transport	48.5	74.4	71.1	56.0*	53.5*	0*	0*
Promotion of transit services
Popularisation of State and transit services	0.03	0.03	0.03	0	0	0	0
Searching for new markets	0.02	0.02	0.02	0	0	0	0

1. * The financing in the Table has been indicated in accordance with the Law On the State Budget for 2010. The amount of financing for 2011-2013 will be determined during drawing up of the draft budgets for the subsequent years.
2. ** Including 6.5 million lats - loan from the Treasury.
3. *** Including 22.6 million lats - loan from the Treasury.
4. The financing from the EU funds for 2011-2012 has been indicated in accordance with the Law On the State Budget for 2010 (Annex 11 regarding long-term liabilities). It is not possible to anticipate the financing in 2013 because it will depend on the indicators of the implementation of the budget for 2010.
5. Information regarding the financing from the European Regional Development Fund and Cohesion Fund, as well as budget projects of the Trans-European Networks (TEN-T), for the planning periods of 2000-2006 and 2007-2013 has been included in the Table.

8. Planning of Further Action

In planning further actions, the conformity to the following policy planning documents of national significance should be ensured:

1) the National Development Plan of Latvia 2007-2013 (Cabinet Regulation No. 564 of 4 July 2006, Regulations Regarding the National Development Plan of Latvia 2007-2013);

2) the Action Plan for Introduction of the Programme for Stabilisation and Restoration of Growth of Economy of Latvia (LESIA) (Cabinet Order No. 123 of 19 February 2009, On the Action Plan for Introduction of the Programme for Stabilisation and Restoration of Growth of Economy of Latvia);

3) the report on medium-term policy directions of recovery of economy (draft); and

4) the Plan of Measures for Improvement of Entrepreneurial Environment for 2010 (draft).

By making amendments, the Guidelines for the Municipality Support to Arrangement of the State Second Grade Motor Roads for 2008-2015 and the Guidelines for the Development of the Public Transport for 2004-2015 are integrated in the Guidelines, thus ensuring optimisation of the hierarchy of policy planning documents without losing the results to be achieved, which have been specified in the referred to documents. They have been updated according to the existing and anticipated resources of the State budget, taking into account the present economic situation in the State.

Further development of new policy planning documents will take place if it is provided for in the documents of political guidelines of the European Union or national level, as well as if a problem in the transport sector is detected, for solving of which special policy is necessary. In relation to the potential increase in the financing of the field of motor roads (upon improvement of economic situation in the State), it is planned to develop a plan for arrangement of State local motor roads from 2012.

9. Reporting and Assessment Procedures

Once every two years the Ministry of Transport prepares Report on the Progress of Implementation of the Guidelines, which is submitted to the Cabinet in the form of informative report by 1 July. If necessary, also proposals for updating of the Guidelines are submitted.

10. Link of the Guidelines with the Priorities Specified in the Development Programmes and Strategies of Planning Regions

Upon developing policy planning documents for transport development, mutual co-operation and co-ordination takes places with the development agencies of Rīga, Kurzeme, Zemgale, Vidzeme, Latgale regions, which develop plans, programmes and strategies for the territory of the planning region. The results of transport case studies and development matters reflected in the policy planning documents of the development policy of planning regions have been taken into account in the Guidelines.

Similar problems in the transport sector have been defined in all policy planning documents of the development policy of planning regions: transport infrastructure of poor quality, particularly motor roads and streets, unsatisfactory services and access to public transport, poor link between traffic networks and modes of transport, which conform to the problems identified in the Transport Development Guidelines. Thus, the directions of actions in the Guidelines comprise solutions to the problems identified in the programmes and strategies of regional development.

Upon developing State and regional planning documents, mutual exchange and co-ordination of opinions and information takes place by participating in meetings, meetings of work and co-ordination groups, providing conditions and statements.

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¹ Data of the Central Statistical Bureau.
² The Port of Lielupe operated only as a yacht port
³ The Baltic Palette II. Transport Coridors Network, Development Issues of Transport Infrastructure in Rīga Region. Final Report. 2004

Minister for Transport K. Gerhards

 

(Cabinet Order No. 518
of 12 July 2006)

Summary of the Transport Development Guidelines 2007-2013

The Transport Development Guidelines 2007-2013 are a policy planning document, which determines the basic principles, objectives and action directions of the transport policy for the time period from 2007 to 2013.

The main problems to be solved in the transport sector are:

1) the quality of infrastructure and the traffic safety, which would ensure the sustainability of the transport system;

2) passenger and freight transport services of good quality accessible to the inhabitants and merchants of Latvia, which would ensure the mobility of people;

3) maximum export of transport and logistics services, which would ensure substantial income to the State;

4) education and studies, which would ensure taking of more justified decisions, as well as professional sectoral specialists.

All these aspects have not been completely reflected in the policy planning documents in effect at present, moreover, the operation period of several documents expires in 2006.

In order to solve the referred to problems, an overarching objective has been put forward in the Guidelines - competitive transport infrastructure of good quality, which has been integrated in the common transport system of Eurasia, entrepreneurial environment, safe traffic and transit, logistics and public transport services of good quality, accessible to everyone.

In order to achieve the overarching objective of the transport development policy, the following action directions have been specified in the Guidelines:

1) improvement of the quality of the infrastructure;

2) increasing of the traffic safety level;

3) organisation of the public transport services in bus and train routes of State significance of the route network;

4) promotion of transit services; and

5) creation and implementation of the transport policy on the basis of studies and preparation of professional specialists.

In implementing the transport development policy, it is anticipated that by 2013:

1) all major State motor roads will be arranged, the anticipated increase in the proportion of the length of State motor roads with asphalt surfacing is 0.3% per year, reaching 42% in 2013;

2) upon modernising the railway, annual volumes of rail freight carriage will increase, reaching 100 million tons in 2013, technical and legal obstacles for the development of rail traffic with Central European and Western Europe will be eliminated;

3) provision of competitive and efficient services in ports and in the involved transport chain will be ensured;

4) the development of the infrastructure of the international airport Rīga will ensure annual increase in the number of the serviced passengers, reaching 10 million passengers in 2013, regional airports - of Liepāja, Ventspils and Daugavpils - will operate;

5) the level of traffic safety will increase - the number of persons who have died and been injured in road traffic accidents until 2010 in comparison with 2002 will decrease by 50% and until 2013 - by 70%;

6) preconditions for the development of other sectors will be created, developing public transport services, the number of passengers carried in the suburban public transport will increase by 50% until 2013; and

7) the competitiveness of the persons employed in the transport sector - education and qualification - will be increased, promoting more efficient creation and implementation of the transport policy.

It is intended to use different sources of financing for the implementation of the action directions specified in the Transport Development Guidelines - State and local government budget, financial resources of the European Union (Cohesion Fund, European Regional Development Fund (ERDF), budget of the Trans-European Network (TEN-T)), as well as private capital.

The following resources from the State and local government budget are necessary for the implementation of the Guidelines*:

Cohesion Fund projects of which:	1009.8 million lats
national public (State and local government) co-financing
	434.8 million lats
private co-financing	56.2 million lats
ERDF projects of which:	293.8 million lats
national public (State and local government) co-financing	71.4 million lats
private co-financing	7.4 million lats
State financing for the maintenance of motor roads, development of the public transport, promotion of transit, for education and research	2.32 billion lats

* State budget expenditure has not been evaluated, when implementing the Road Traffic Safety Programme, as well as when participating in public-private partnership projects.

Minister for Transport K. Peters

 

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Translation © 2010 Valsts valodas centrs (State Language Centre)