Back to list Print 3. May. 2019

Information of “Rīgas satiksme” Board about the most significant events (April 22 – 28)

The week started with receiving unpleasant, however predictable information from the Competition Council – a fine of EUR 2 417 000 was imposed on “Rīgas satiksme” for its participation in a prohibited agreement. It should be noted that although materials of the case do not include any evidence that “Rīgas satiksme” participated in the cartel referred to in the council’s decision in any form whatsoever, and actually this is an attempt to punish the company for an infringement committed by an employee and the companies involved in the cartel. The expectedness of such result was evidenced by procedural violations committed by the Competition Council – “Rīgas satiksme” was denied the right to review the full file of the case, as well as was denied the extension of the deadline for submitting explanations, which is a common practice in cases where it is necessary to review and process a large amount of material related to the case. The decision of the Competition Council will be appealed against to the court, and the Board decided to appeal the case at its meeting of April 25.

At the “technical meeting” of April 23, the Board continued to discuss possible solutions for the optimization of “Rīgas satiksme” organizational structure. In this context, the Board listened to the opinion of representatives of audit company “PricewatehouseCoopers” about the implementation of recommendations resulting from the survey carried out in 2009 and current trends in logistics companies. It was concluded that overall the recommendations included in the 2009 survey had been implemented. Still, it is necessary to improve a part of the company’s structure related to its main service (passenger transportation), the management of reserves, to evaluate the possibility of separating the structural units dealing with development issues. A conceptual agreement was reached with “PricewatehouseCoopers” about further cooperation in solving these issues, including the organization of a seminar for the company’s top management.

On April 23, a shareholders meeting of SIA “Rīgas acs” was held on the premises of “Rīgas satiksme” to approve the annual report of SIA “Rīgas acs” and to appoint an auditor. SIA “Rīgas acs” is a company 100% owned by “Rīgas satiksme”, the task of which is to implement information technologies in public transport (passenger information system, safety, operation control, accounting of passengers etc.) and to manage transport flows in Riga. It was decided to use the profit earned by the capital company in 2018 in the amount of EUR 208, 000 to cover losses of the previous years. It shall be noted that in the process of planning the extension of SIA “Rīgas acs” operations, “Rīgas satiksme” established a new data centre which meets the latest standards in this field. It is planned that in May the data centre will be audited to make an objective assessment of whether the project has achieved its goals. The data centre is due to be launched in 2020. The meeting of shareholders has given Board of SIA “Rīgas acs” one month to prepare proposals for improving the business model.

On April 24, Riga Vice-Mayor V. Baraņņiks, acting Director of the Riga City Council E. Jakrins, Chairman “Rīgas satiksme” Board Chairman Dr .iur. E. Saulītis and Board member J. Meirāns, as well as other employees of the municipality participated in the meeting organized by the State Police to discuss issues related to the closure of the viaduct in A.Deglava Street. “Rīgas satiksme” under the guidance of the Board member J. Meirāns has prepared in time for the most negative turn and performed the re-planning of routes. Unfortunately, the most negative forecasts became true, which caused significant public transport delays. Every day the closure of the viaduct in A.Deglava Street causes additional expenditures of “Rīgas satiksme” in the  amount of about EUR 5000 (additional transport costs, increased fuel consumption). The question of opening new public transport lanes to increase the speed of public transport is also being solved.

Considering the increasing role of internal audit in further operation of the company, in the afternoon the Board Chairman Dr.iur. E. Saulītis met the head of “Rīgas satiksme” Internal Audit Unit, Ņ. Lasmane, and her staff at Kleistu Street 28, to discuss issues that are topical for the employees and the company. It was noted that it is necessary to strengthen the functions of audit, to improve working methods and cooperation with other structural units of the company that control the system of risks and quality management. Later on, the Chairman of  Board met the head of the Quality Control Unit I. Grunte, who is now making preparations to start the implementation of anti-corruption standards in the company.

On April 25, the Board of “Rīgas satiksme” held a meeting where Board members listened to several reports, as well as decided to establish the top level management group that will work on improving the long-term strategy of the capital company (until 2033). The Board also decided to start developing the plan of action for the coming 1.5 years. It is planned that the development of the action plan will be finished late in May or early in June. The main tasks of the plan is to finish the stabilization of the company, to streamline the process of financial planning, to improve services and the organizational structure and to restore reputation. The Board also listened to a report by the head of the Interior Audit Unit, Ņ. Lasmane, about the results of terminated contracts with individuals. The results of the audit evidence that no infringements were committed according to the documents, yet the practice of signing and supervising such contracts needs to be improved. The Board also ordered the continuation of the audit to find out whether the company has enough documents confirming the receipt of provided services.

On May 25, the working group that will lead the evaluation of work-related corruption risks held its first meeting. The working group was introduced to the experience of other municipal institutions in the evaluation of such risks, as well as to the methodology used to evaluate such risks in other institutions. The working group called on the company management to invite an expert who has the experience of performing such evaluation in some municipal institution of Riga city and could provide methodological support to ensure the conformity of the evaluation with the requirements of laws and regulations, and the Riga City Council Bureaucracy Combating Centre.

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