Latvian Post is most likely to have to raise prices
Latvian postal company Latvijas Pasts (Latvian Post) (LP) will most probably have to raise the prices of its services, Latvian Transport Minister Ainars Slesers said on Tuesday.
LP will have to take several important decisions concerning the future development of the company. The minister said that he has a development plan to offer tot he company management, but he would like to see the plan developed by LP first. The minister said that he would meet LP management on Wednesday to discuss the action plan that the company will present concerning its further development.
“For several years the post was a very inert company, with not enough investment done,” said the minister. He added that in the time when there was unemployment in Latvia, people held to any work they could have to earn some money, but an opportunity was given to the residents to go abroad to earn living, thus the pressure on salary rise is huge.
“This is why the post should be more dynamic and use tactics to increase revenues,” said Slesers. He added that problems exist as the post is performing social functions as well.
“There are lots of post offices that make loss and will never make profit. The question is if the company has to sustain such branches? If they have to be sustained, the next question is — How?” said the minister, adding that the unprofitable post offices are sustained by the post workers. He admitted that press delivery price problem is the same, as these have not increased lately on the face of increasing costs.
Slesers said that a consideration should be given to the postal services to be subsidized by the government and the ones to be sustained by the company itself.
He said that the privatization of LP is not an issue at the moment. It is not planned and will not be allowed, but as postal liberalization is on the approach in the EU, possibly, decisions will have to be taken to attraction of private partnership to separate postal functions, not the post in general.
Slesers did not want to comment on the necessity of the resignation of Gints Skodovs, the head of LP.
Latvian Prime Minister Aigars Kalvitis during a government session on Tuesday said that the salaries of the unprofitable offices and postal workers in general is the issue of the company management as the management of the company receives the salaries, which are among the highest in the country and, thus have to solve the crisis situation.
LP will prepare proposals for raising postal workers salaries. The Trade union of Latvian communications workers planned requiring salary raise for postmen and did not deny the possibility of a strike if their demands are not met.
Skodovs in his turn circulated an address in the media asking postal workers not to strike, as the customers will suffer as a result of the action and the issue is already being decided.
LP closed last year with 4.8 million lats (EUR 6.8 mln) in the red, with the loss exceeding the planned figure by 2.9 million lats and its unaudited turnover was 43.7 million lats. In 2005, Latvijas Pasts posted a 1.65 million lats loss on 32.8 million lats in turnover.
Latvijas Pasts provides mail, philately, transportation, express mail, financial, press and IT services, as well as is involved in retail trade. Latvijas Pasts, which currently has about 900 post-offices, is a fully state-owned company.
(EUR 1 = LVL 0.7028)
