RIGA, March 28 (LETA) - Ventspils City Council has decided against development of an industrial park of national importance in the municipality.

This decision was taken to avoid possible risks and to avoid a financially critical situation for the city council.

Members of Ventspils City Council decided to terminate agreement signed last year between Ventspils Port and the Central Finance and Contracting Agency (CFCA) on development of an industrial park of national importance in Ventspils, for which EUR 10 million was to be allocated from the Recovery and Resilience Facility.

The municipality explains that the project was essentially divided into two parts: one was to be implemented by the municipality and the other by private companies.

The municipality's responsibility is to prepare the infrastructure for the companies' operations, including the development of construction projects, procurement and construction works, arranging co-financing for the project and other activities. The municipality is fully prepared for implementing its part of the project.

The other part is the project's performance indicators. The project has to achieve specific objectives, such as job creation and non-financial investments of dozens of millions of euros.

Performance of the companies in implementation of the project is critical for receiving EU co-financing. The municipality has no control over the companies' operations and at the same time the companies' operations carry certain risks. If the project's performance indicators are not achieved, the municipality will have to reimburse either all or part of the EU co-financing received in proportion to the performance indicators.

Repeated surveys of Ventspils companies and a summary of their performance indicators by February 2025 revealed that the total amount of projected non-financial investment by new investors and existing companies in Ventspils did not reach the planned indicators. Ventspils City Council concluded that the project would be subject to financial corrections, which would cause critical losses to the municipality and have an impact on other development projects and the municipality's autonomous functions.

As documents for construction of industrial buildings have already been approved, the buildings could be used in other projects, with some changes in the buildings' design solutions.