Thursday, May 1, 2008

The May 1 surprise in Latvia...from just finished Chinese bridge (updated)

Today small number of Latvian leftists celebrated the International Worker's Day. The old guard communist and leader of the Latvian Socialist Party Alfrēds Rubiks called those couple of hundred elderly who gathered in Grīziņkalns to continue to fight ("šodiena ir cīņas diena, A. Rubiks) for their rights. It did not create any social reverberations in this sunny day, because most of folks travelled instead with budget airlines to European and Middle Eastern destinations. Also the group of about thirty Latvian Social Democrats gathered near the monument of the spiritual father of the Latvian Social Democracy Jānis Rainis today, and listened to their leader and former Popular Front star activist Mr Dainis Īvāns.

In his speech Dainis Īvāns reminded his listeners about the significance of the May 1 and called people to remember that Latvia is a country not only for the rich people, but also for the blue collar workers, teachers and pensioners. It sounded strange, however, from the man who supported ill famed "dumpster bill" of the odious member of the AAA team Mr Šķēle.

Also, while being member of the Riga City Council he never raised a voice about absurdly expensive Southern bridge. Because city councilors voted to keep the final costs of this lucrative project as secret it is impossible to know exact costs now. However rather many experts have mentioned the sum of 568 million lats (about 812million euros under current rate of exchange 1EUR=0.70Ls), as the final number for this hyper lucrative project.

I wrote about the absurdly high costs of the Southern bridge across the Daugava river already before. And today news came from Shanghai about finishing the longest suspension bridge in China - the New Runyan bridge. The latter bridge is 36 times (!) longer than the bridge built in Riga. Final costs of the Runyan bridge according to Delfi stand at 763 million lats (1,09 billion euros).

Workforce is definitely cheaper and also more effective in China (it took them 3 years to build that bridge, while Latvian counterparts are in their third year and not finished yet). Technology for building Runyan bridge was probably more sophisticated (more technological innovations used for suspension of such a long bridge) than for building its tiny (just 800m long) cousin in Riga. It is especially significant considering that technology to build the Southern bridge was brought not from the West but from Russia.

Technologies is not the most significant aspect here, however, but the total costs of the bridge. According to the official data from China (one should always be healthily suspicious about statistics from non-democracy as well:) and experts estimates about total costs of the Southern bridge, constructing 100m of the Southern bridge should cost about 1,015mlj euros, while building 100m of Runyan bridge cost 30 277 euros. Simple arithmetic's says that Riga taxpayers should pay for construction of 100m of concrete bridge 3252% (!) more than Shanghai taxpayers. Is it good news from China about "relative" ineffectiveness of Latvian builders only?


It is Friday morning and I passed by the Southern bridge whilst taking my car to garage. Because there is official holidays in Latvia (May 1-4) no one was working on it. And no one will be working on it till Monday, while in the meantime the Deutche Bank issued credit obligations are there, what a waste... . No wonder then that the 800 meters Southern bridge is considered as the "biggest" construction site in this land, and with the cost equivalent of nearly 10% of the current Latvian GDP. Sad... .


Anonymous said...

Believe it or not, but when I talked to member of council of Riga she was hardly aware of sum of money spent on construction. She did not know what scheme was used to walk through legislation that states that regional administrations are not permitted to take loans. (Scheme: DB->AS Dienvidu Tilts->City Council of Riga) To pass legislature they used law that reads fallowing: "..are permitted to sign long term contracts of construction (AS DT and CC of Riga).
It is as easy as fallows- all info that members of city council reach is provided by comities. And it is well known what staff of comities are like- amenable and corrupt. And if there is a project to promote of this scale- it is obvious that administration of city council has once again proved its irresponsibility that borders mental illness.

Baltic said...

Dear Anonymous reader:

Thank you for your timely and precise comment. The fact that city government wasn't allowed to take the loan directly from the DB was noted also by The Head of the State Audit Office Ms Ingūna Sudraba and the investigation should end in December 2008. However, until then monies will be flushed into correct black holes and party illegal treasuries...

We are discussing it here, journalists have raised this issue in Dienas Bizness, NRA, Diena and to no avail... . When Brussels will finally WAKE UP?????

KT said...

ummm ... and what are you waiting from Brussels? what kind of reaction?

Baltic said...


I met persons who visited the EU Audit office. However, Bruxelles Audit office looks for hard evidence, which is hard to get from corrupt politicians and their lobbyists (Deutche Bank having a superlucrative deal here in addition to that:).

Ideal reaction could be putting any money transfers (structural and cohesion fund, as well as CAP payments) for Latvia on hold, until gross violations are properly investigated (JTB, Southern bridge, Latvian Road cartel) and those responsible (also top notch politicians)punished. That would initiate change of the political clans, however, and I am afraid that Brussels is afraid to allow such precedent to happen:)

Brussels has the choice between swift surgery barring funds and initating structural change of the political system, or allowing the existing political class to remain intact and transfigure itself into permanent Italy of the North:)

Anonymous said...

Yeah.. Hi again. This is same anonymous..

Just came back to check if there are more opinions posted in Mr. Spolitis personal blog. (/off topic/-btw Your personal info including code may be reached in list of donations to LNB building.. even if it is publicated neither in knab's nor cvk's nor salaspils local administration's home page, it would be wise checking where You personal info is available as You seem to be brave enough to post at least provocative comments concerning on going politics+ why Your nationality is such a secret? /end of off topic/)

Well, I assume that scheme of Southern bridge is not a short term deal among state, political parties, local and foreign banks. I can not disagree with Mr Spolitis opinion severals times mentioned in discussion concerning Latvia's geopolitical position- it is certainly clear that closest and geographically most convenient business partner for Latvia is its Eastern neighbor (EST has Scandinavia, LIT has Poland and Europe). However I have my own theory- could it be so that profit to black cash boxes to party (-ies) and Parex is not a single deal. My assumption is that even though current political elite is believed to be pro-russian in its own way- money paid from budged will return to Latvia's parties (I would say orange or green colored- need to check out who exactly were those people in Riga CC that suggested this project to deputies) in order to finance lobbying pro-western policy and anti-russian policy (as Deutche Bank is western institutional and financial tool by definition).

I would be pleased to see any comment on this..

Anonymous said...


Forgot to mention a few more things.

All this return to money in my theory of conspiracy is planed in long term. The West has had an experience of lack of rule of law in Latvia. Due to Latvia's slow progress in area of rule of law they (the West) might be looking for alternative strategy to develop pro-wester policy holders and financiers in our own soil. And if it is clear that rules of the game have nothing in common with legal law and it would take at least ten to fifteen years to move at least an inch closer to understanding of legal state thy find in more convenient to play by our own rules.

And the game is fallowing: we illegally pay to the West money that will return to Latvia to finance policy in Latvia that would provide profit to the West.

Could this be an explanation to Mr Spolitis's question- why the EU is unwilling to act?

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