Worry over road repairs funding post-2019

Almost half of central and local roads are in bad or very bad condition. A large part of the road infrastructure funding is made up by EU funds, the availability of which for this purpose will fall dramatically in 2019. The Transport Ministry has discussed setting up a road maintenance fund, reported Latvian Radio on December 21.

The Transport Ministry says that on the average about €100m in EU funds are spent on central and local road maintenance annually. However the funds will be cut by half in 2019 and completely removed in 2020. 

A memo over the state of Latvia's roads was presented to the government this week saying 46% of Latvia's paved and 42% of the non-paved roads are in a bad or very bad state.

"We have to find a solution on how to fund roads post-2019 when the available structural funds are steeply reduced, whether [by setting up] a road fund or earmarking funds from the excise budget," said Transport Minister Uldis Augulis last week on Latvian Radio's Krustpunktā.

Both maintenance and non-maintenance proves to be expensive, however.

"...roads in a bad state cause losses to the economy and, according to estimates carried out using an international method, losses make up around €880m a year," said Jānis Lange, council chairman of the Latvijas Valsts ceļi (Latvia's State Roads).

"The sum is made up by the extra car usage costs from driving on disintegrating roads; the extra time spent on driving a route; and the extra fuel use. However so that the system would be sustainable, €673m should be invested in road maintenance and reconstruction each year," he said.

Should the state not invest more money into road repairs, in 2020 the volume of maintenance will shrink three times in comparison to this year, said Lange.

"Supporting the renewal of the road fund will not bring more money to the state coffers. It's unlikely we can strip some other industry of funds so that more money is poured into roads," said PM Māris Kučinskis, defining the government's policy.

However ministries have come up with compromises, such as redirecting potential excise tax surpluses to road maintenance.

Finance Minister Dana Reizniece-Ozola was also skeptical over renewing the road fund. She says it would reduce funding for other industries for about €300m.

"The compromise solution currently in the protocol decision is not ideal. However we're not ready to say right now that we'll take away from others to get our roads in order, as the government has stated that next year too healthcare is an area of priority," she said.

Politicians and transport industry experts say that roads are the main arteries of the country's economy, there's no hope for a stable road maintenance funding model in the near future, and that will affect people in Latvia's regions in particular.

Meanwhile, on December 21 more than 50 people protested against road quality on the road leading from Kandava to Zante that had apparently been botched by repairs in late November. 

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Economy
Economy