Investments are needed to make a breakthrough in the development of the Riga metropolis. This region generates the largest share of the country's gross domestic product (GDP), so it needs investments, support to entrepreneurs with access roads and infrastructure, and support programs for young specialists, scientists and innovations, said Edvards Ratnieks (NA/LRA), Deputy Chairman of the Riga City Council, Chairman of the Riga Planning Region Development Council and Co-Chairman of the association of Riga and Pieriga municipalities, Riga Metropolis, in an interview with LETA.

You are currently the Chairman of the Development Council of the Riga Planning Region. How long will you be in the office?

Until the end of the election cycle. The whole election cycle is four years, two of which are chaired by a Pieriga municipality leader and two by a Riga City Council representative.

Despite the overall slow development pace in the region, introduction of a single public transport ticket next year has recently been announced. Which routes will it apply to?

The single ticket will operate in Pasazieru Vilciens passenger train Zone A, which includes Riga and the immediate surroundings outside Riga. This zone will be a pilot of the single ticket, which means that a passenger with this ticket can both travel by train and transfer to Rigas Satiksme municipal public transport, using it as a 90-minute time ticket. Initially, this will be a pilot project. In the future, it would be important for the same single ticket principle to work in the Riga and Pieriga region. It is important to create attractive conditions for the residents of the Pieriga region to switch from their cars to public transport, saving both time in traffic jams and financial resources.

This immediately leads to the next question: where will these tickets be available and what will they look like?

Most likely they will be in electronic systems such as Mobilly. A ticket could cost EUR 2, of which EUR 1.5 will go to Rīgas Satiksme and EUR 0.5 to Pasazieru Vilciens. The Transport Ministry will cover the subsidy to Pasazieru Vilciens, which will be EUR 1 per ticket.

This project had not moved forward for several years and so we decided to convene all the parties involved - the Road Transport Directorate, Pasazieru Vilciens, Rigas Satiksme and also the transport minister. The minister made it clear to us that he was in favor of this project going ahead and we, as the Development Council, called on the Directorate of Road Transport, Pasazieru Vilciens and Rigas Satiksme to resolve this issue over the summer, because the biggest problem was the financing model, as it is clear that with the expenses that Rigas Satiksme has at the moment, we cannot take on additional costs. The solution is that the losses will be covered by the Transport Ministry.

I do not wish to give specific dates at the moment, because it depends on the other parties involved, not just on us.

The Finance Ministry has, however, currently expressed its objections to the single ticket financing model, but we will see how this plays out.

Pasazieru Vilciens will receive a subsidy, but does Rigas Satiksme ticket price of EUR 1.5 cover the costs?

No, Rigas Satiksme has also been subsidized. This problem is quite acute for us on routes that extend outside Riga, because the citizens of Riga subsidize Rīgas Satiksme through the Riga municipal budget.

The single ticket has indeed been discussed for many years, and I suppose many people had given up hope that it would ever appear. Why is joint regional planning and development so slow and painful?

First, for many years, while Nils Usakovs was in charge of the Riga City Council, Riga did not talk to the Pieriga region at all. The municipalities of the Pieriga region had even created their own association - the Association of Pieriga Municipalities. Now it has been transformed into the association of Riga and Pieriga municipalities, Riga Metropolis, because the Pieriga municipalities are very close partners of the Riga City Council and there are a number of things that we need to address together. Of course, everyone wants to be the decision maker in their own municipality, and no one wants to give up their own interests anyway, but this association format allows us to find common ground, and then we can move forward.

There was also a plan to create extended Rigas Satiksme routes to some neighboring municipalities, but this has been stalled due to shortage of funding, as these municipalities would have to subsidize the journey. However, it is clear that people need this service. So why cannot the municipalities agree on an issue that is important to their residents?

There are several things here. One of them is that there are regional buses that run from the municipalities of the Pieriga region and, like Riga public transport, go to the city center. If these routes were shortened to the Riga border, then the municipalities of the Pieriga region would have funds with which to subsidize Rīgas Satiksme. The other thing is that perhaps the municipalities of Pieriga should become co-owners in Rigas Satiksme and contribute with investments from their own municipal funds. This is, of course, a challenge for mutual cooperation. At the same time, Rigas Satiksme already now is carrying the residents of Pieriga, and it would therefore be only fair for such cooperation to take place.

Why does it not happen? Maybe the Riga City Council has not developed an offer that would satisfy the municipalities of the Pieriga region?

There are discussions on this format. The municipalities of the Pieriga region say that they would prefer to pay a bill rather than join into the capital of Rigas Satiksme and take all the responsibility as a shareholder.

However, if we look at the length of the routes and the number of passengers carried, then, of course, the share in Ulbroka or Marupe is the smallest share, so the municipalities of the Pieriga region could be the minority shareholders in Rigas Satiksme. Perhaps they are concerned that they will have no influence on decisions?

Maybe. I think we already provide a pretty good network of routes for the municipalities of the Pieriga region. Of course, under these circumstances, when municipalities are catastrophically short of money and they have to cover new functions, local governments simply do not want to pay more, which is understandable. The Riga Metropolis work group, set up by the Smart Administration and Regional Development Ministry, is currently working on these issues.

One issue is cooperation in transport. What is happening in other areas?

We have already had cooperation with a number of municipalities in the field of water utilities, but of course there is also the question of what happens next with the funds. It is not just a question of laying water pipes or sewers. Anything that drains or flows away has to do with facilities that have to be maintained, and so there have to be investments made there too, and all municipalities should participate.

Can this all be regulated through tariffs?

It can, but then the tariffs will be very different from what they are now. Moreover, there are also neighborhoods in Riga that still have neither centralized water supply nor sewerage. For example, it costs tens of millions of euros to lay a network in Darzini.

Relatively recently, there was a question at the Riga City Council about how to organize repairs in the street bordering Marupe. Is it clear now how to deal with such situations, where one side of the street is one municipality and the other is another?

First of all, the municipalities have to talk to each other. This is what we saw when they wanted to close Darzini and Rumbula railway stations, which are not in Riga at all. The municipalities, the residents, the other stakeholders came together and we discussed the problem and came to a common solution on how to solve this problem.

What is needed to make local and regional cooperation more active and easier? For example, there was an idea to create second tier municipalities, but now it is not being discussed any more.

First of all, it is mutual negotiations. I have already mentioned the example of connecting infrastructure. Such negotiations are actually taking place. It is not that we leave Riga and the road ends. But it is a different story, for example, with public transport. We have discussed in the Riga Metropolis work group that we could, for example, set up a company to provide this service, in which each municipality would have a share.

There is also the issue of joint tourism development and how to look at this. Tourists who come to Riga do not think about municipal borders, so here, too, we need to think about mutual cooperation. For example, when cruise ships come to Riga, their passengers are offered excursions to Jurmala, Sigulda. So, even though we have municipal borders, we are in the same tourism ecosystem.

Then there is the question of the school network. It is clear that the schools in Riga take in the children from the Pieriga region. We are also aware that the Pieriga region cannot build as many new schools as it needs, because the Riga Planning Region is growing. As a result, parents from the Pieriga region bring their children to Riga, while the residents of Riga maintain the schools, and then there is mutual settlement. I understand that the new system will provide a better balance, because until now, the citizens of Riga have paid for a lot of things with their taxes.

How to deal with all this? Riga promoted development of the Pieriga region with its economic activity, because studies show that people of a certain age want to own their own house and live in a green environment. Riga also has enough land that could be given to investors to build private houses for people who want to live in green areas. So, it is not necessary to move to Pieriga region. We have the opportunity here in Riga.

But it still does not show the right direction. A new joint venture can be set up for transport, but how can we deal with schools, healthcare, so that decisions apply to the whole region and not just to a particular municipality?

It is clear that the essence of municipalities is the desire to govern their own territory, and this is built into the whole system, with the expectation that there will be mutual competition, mutual rivalry. However, if we see a mutually good result, then it is possible to reach an agreement.

Also, when it comes to attracting investors, investors also look at the Riga Metropolis area as a whole, not at individual municipalities. They are interested in issues such as how far the port is, how far the airport is, what the access roads are like, not in which municipality the company will be located.

All of this, in turn, raises the question of the availability of funding. If the Riga metropolitan area together generates three quarters of the gross domestic product (GDP) of the whole country, then some support mechanisms would also be needed. Not, as is the case now, that this year, Riga and the municipalities of the Pieriga region are paying EUR 185 million into the municipal equalization fund, while the state is paying EUR 35 million this year and EUR 50 million next year, which is not in the same proportions as Riga and the Pieriga region. From this fund, we support Daugavpils, Ventspils, Liepaja, Valmiera, Cesis, almost all the big cities, except Riga and Jurmala.

Our contributions to the equalization fund amount to around 10-20 percent of the municipality's annual budgets. This has a significant impact on the development of our city. And for the municipalities that receive this funding, it can even represent a much larger proportion of their budgets.

Of course, the poorest regions should be supported, but why do we have to maintain state cities? I do not understand that. We have also discussed this with business organizations, with the Latvian Chamber of Commerce and Industry, with the Latvian Employers' Confederation.

We need to help municipalities that are struggling, we need to help where there is a problem with human resources. We need to do all that. But at the moment it has gone to such an extent... Last year Riga alone had to pay EUR 126 million into the fund, this year EUR 133 million, next year already EUR 138 million. We could build the Mezaparks School without loans for the EUR 12 million difference. Now we will have to take a loan.

There is not enough money for everything, and we are taking loans instead of spending our own money. I have already suggested that it would be important to freeze this increase in municipal contributions to the financial equalization fund until the system is sorted out, without significantly damaging the development of Riga and other municipalities in the Pieriga region.

Do you have a clear idea of how to achieve an economic breakthrough for the region? Maybe there is no need for such an extra boost?

The region definitely needs a boost. If a region generates the bulk of the country's GDP, then it also needs to invest, it needs to help businesses with access roads, with the infrastructure necessary to facilitate economic activity. I have already mentioned that we are also working on the concept of private houses, which would be necessary for the population to remain living in Riga. We need support programs for young professionals, scientists and innovation. For this to happen, it is not enough to make small programs with EUR 100,000 for young entrepreneurs. That helps, but it will not make a big breakthrough.

Is it possible to agree on joint development projects with the neighboring municipalities? Or does Riga plan its own development, and other municipalities plan their own?

So far, each municipality has its own development plans, but cooperation is happening. We cannot imagine IKEA being built in Ropazi if Riga does not develop its access roads accordingly. This is a very concrete example.

However, does the very slow progress towards cooperation show that the administrative-territorial reform in the Riga region was not successful, and that this solution for many individual municipalities in the Pieriga region is only slowing things down?

What is done is done. Could there be another solution? The municipalities were created using different methodologies, the process was very controversial, and probably the best that could be obtained at that moment was created. Should this now be reconsidered? I think not. It is certainly premature at the moment and all the emotions should now settle down. I understand that Babite and Marupe are thinking about how to get rid of the "forced marriage". There is the question of what will happen to Garkalne, which is a bone of contention between Adazi and Ropazi. But I think that everything has to be allowed to settle down. We have to see how the regions themselves will start to live their own lives.

Following the regional reform, the Riga Region Sustainable Development Strategy was revised. Was it not worth developing a new one?

First, the planning region took on a completely different shape. The planning region no longer extends to the Estonian border and Kandava but has acquired the outline of the Riga metropolitan area, which makes it much easier for us to define the objectives to be achieved. This, in my opinion, is the best solution, because you will agree that the problems to be solved for Riga and the Pieriga region are much more similar than the problems to be solved for Ainazi. It is therefore very good that the planning region has taken the shape that it has today.