RIGA, June 1 (LETA) - The Latvian Association of Passenger Services Providers (LPPA) calls on the new Transport Minister Rihards Kozlovskis (New Unity) to address the long-standing problems in the transport sector as a priority, the association informed LETA.

The association pointed to two urgent tasks to be tackled in order to remedy the critical situation in the sector.

The first is to ensure that long-term contracts are indexed to the current situation, including the increase in fuel costs caused by the crisis in the Middle East, which is placing an additional financial burden on the sector. The second challenge is to ensure that the contracts are adequately financed by the national base budget for the provision of services.

The association stressed that if the state does not find mechanisms to compensate for cost increases, the population will suffer and access to public transport in the regions will be reduced.

Ivo Osenieks, President of LPPA, stressed that the burden of cost increases on carriers has become critically high over several years and that it is therefore important to take decisions quickly, which should be the primary task of the minister in the coming months, in order to continue the uninterrupted provision of public transport services on the regional route network in September.

"The availability of public transport in the regions is not an issue that can be postponed to the next minister after the elections. It is important for people in the regions to get to work, to doctors, to institutions and to do their business, so we must not allow the situation to escalate to the point where they are deprived of such opportunities because of homework that is not done on the national side," Osenieks stressed.

The association hopes that with the new transport minister there will be constructive cooperation with the LPPA and the industry and that long-standing issues will be resolved.

The association claimed that once again the ministry responsible for the sector has decided to engage a consultant to carry out another assessment, delaying the process.

The significant impact of the Middle East conflict on energy prices continues to undermine the economic stability and viability of regional passenger carriers.

The association stressed that the current situation calls for immediate action as the outlook for energy prices remains unfavorable. Thus, solutions need to be found to cover unforeseeable costs over the lifetime of long-term contracts.

The association reminded that the industry met with the Road Transport Directorate (ATD) at the end of April, which proposed solutions, but at the moment their further progress depends on political decisions and the ministry.

At the same time, the association stressed that improving the indexation of contracts is essential not only to cover fuel costs, but also to ensure competitive wages for bus drivers, which is critical for the continuity of the industry.

The association added that currently, quality and affordable regional public transport services are essentially run at the expense of the operators. The critical situation of the sector in terms of long-term service provision is therefore only exacerbated. It is therefore important to find immediate solutions in cooperation with the industry so that the population in the regions does not suffer.

Carriers stressed that the availability of passenger transport in the regions is also a matter of national security.

ATD previously told LETA that the directorate had found a solution to index the prices of long-term contracts concluded with regional public transport carriers once a year. ATD believes that a move to more frequent indexation is the most effective way to preserve the business logic and fair competition offered by carriers in the procurement process.

At the same time, the change in indexation frequency will address rising fuel costs and also driver wage increases.

According to ATD calculations, the amendment of the contracts would require financial resources of €10,348,907 in 2026. ATD has informed the ministry of the financial resources needed to implement the amendments and has submitted proposals to the ministry to find funding.

ATD stressed that the amendments to the contracts and the resulting financial commitments will only be possible after the relevant decision of the Public Transport Council and the approval of the necessary funding, in accordance with the provisions of the Law on Budget and Financial Management.