Back to list Print 2. Dec. 2009

A part of passengers to pay more for public transport service.

It is scheduled that next year municipal company "Rīgas satiksme" will get a far less funding to provide public transport service in Riga city than this year. It is evident from the approved state budget, as well as the financial capabilities of the local government. To provide the public transport service, a deficit of more than LVL 13 million needs to be compensated in the company’s budget for the year 2010. A part of this amount may be made up by maximum expenditure cuts, but the remaining 8 million lats need to be compensated by tariff changes.

In conformity with the priorities set by Riga City Council, the current ticket prices and discounts will remain unchanged for schoolchildren, students, teachers, pensioners, parents of large families and other categories of passengers. The proposed changes in ticket prices concern residents not entitled to any discounts. For them, the basic price of one-time ticket will be 60 santims. "Rīgas satiksme" reminds that one trip will cost less if a passenger buys a one-month ticket or a ticket for several trips.

"Rīgas satiksme" calls on customers to be understanding and reassures once again that all possibilities have been exhausted to optimise the company and its costs.

Given the current economic situation, this year the company’s own income has dropped by about 20 %. In 2009, the VAT rate increased from 5 to 10 %, yet the prices of tickets did not change and the losses of about LVL 2 million were compensated at the company’s expense.

2010 will be even a more difficult year in terms of income. The amount necessary for the company’s operation is less than the sum of the subsidy to be provided by Riga City Council and the own income planned by the company.

This year we have performed a substantial optimisation of costs and evaluation of priorities. The only budget item where costs have grown are   repayments on loans (up to LVL 18 million). Production costs have dropped – not due to a fall in prices, but in proportion to the amount of work. Expenditures on salaries have been significantly cut – by making redundant a staff of 1000 (including the abolishment of conductor’s position), and cutting salaries by more than 20 %.

The next year’s budget has been also drafted, taking into account the current economic situation. The expenditures are planned so as to cover, firstly, the costs of the service, and, secondly, loan obligations, which make one sixth of the total costs. The basic operation costs have been planned with economic austerity, as we have cut expenditures by LVL 5 million already at the budget drafting stage.

Having optimised the company’s costs, we have also set off the deficit resulting from the fact that we keep on providing fare reductions which are no longer funded by the state and the new discounts introduced by the local government. 

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