Municipal Capitalism: Riga's Enterprises Turnover Dropped by 164 Million Euros in Two Years

Politics
BB.LV
Publiation data: 15.04.2026 16:38

Янис Ланге на страже муниципального капитала.

The Executive Director of the State City of Riga, Jānis Lange, released the annual report: “According to operational data, in 2025, the total turnover of capital companies exceeded 811 million euros (in 2024, they amounted to 814.8 million euros).

The most significant impact on turnover changes was caused by the decline in the turnover of the joint-stock company RĪGAS SILTUMS, related to the tariff change, which, in turn, is closely linked to energy resource prices, as well as the reduction in turnover of SIA Getliņi EKO due to a significantly lower volume of waste. Nick KABANOV

Investment Leap

However, the dynamics of income is better understood through the following statistics: in 2025 – 811.5 million euros, and in 2023 – 975.2 million euros. The difference is almost 164 million euros, which unfortunately is not explained in the document of the leading municipal official...

In terms of investments in enterprise infrastructure, 2025 was quite impressive compared to the entire previous five-year period – a total of 197.7 million was invested, which is more than in any other year.

The dividends also look quite decent: for 2025, 12.2 million were paid, compared to 7.1 million the year before. The capital companies thus made a significant contribution to the capital's budget! Moreover, compared to the first year of the “change coalition” government, 2021, the difference is more than double: 12.2 million euros versus 6 million euros.

Incidentally, it was under Mayor Mārtiņš Staķis that on June 16, 2021, decision No. 691 “On Dividends in Capital Companies in which the Municipal Government of the State City of Riga has a decisive influence” was adopted, establishing that the minimum forecasted share of profit paid as dividends is 40% of the reported annual profit of the capital company.

With the note: “unless otherwise specified in the strategy.” Thus, for the water utility Rīgas ūdens, a special decision from January 29, 2025, allowed the payment of only 30% of the profit for 2024. The remaining funds of the enterprise were permitted by Riga to be directed towards the implementation of wastewater drainage system projects in Mangalsala and the development of the water supply and sewage system in Dārziņi.

The Capital Provides Jobs

“The capital companies of the municipal government of the state city of Riga are capable of balancing economic and social goals while adhering to the principles of good governance and responsible entrepreneurship,” states J. Lange in his report.

In 2025, 9,861 people worked in enterprises with municipal capital (in 2023 – 10,016). Some reduction in personnel was accompanied by a smooth increase in wages, which last year was at the level of 2.6%, exceeding that only in the 1st and 2nd city hospitals, for which an exception was made. While managing the enterprises, the municipality participated in 58 shareholders' meetings. At the largest of them, held at the Great Stage of Mežaparks, 110 participants were gathered, also inviting the State Chancellery, the Competition Council, and other experts.

Transparent as Water

Last year marked a milestone for the water utility Rīgas ūdens – the enterprise was the first among the capital companies of municipalities to conduct a bond issuance worth 20 million euros. “Considered very successful,” states J. Lange's report, referring to the rating received from Moody’s of A3. Last year, SIA Rīgas ūdens received the Latvian Corporate Governance Award – “for outstanding governance culture, transparency, and purposeful development of the enterprise.”

On the agenda – much more: “Considering the regulation of Article 11 of the Law on the Completion of the Privatization of Residential Houses of the State and Municipalities, which affects the justification of the current participation of the municipality in the management of Rīgas namu pārvaldnieks (RNP), the municipality’s participation in RNP has been prematurely re-evaluated, and based on the conducted assessment, a draft decision of the Riga City Council has been prepared to terminate the municipality's participation in the state city of Riga, reorganize RNP, and sell shares in a public securities offering, which needs to be considered at a meeting of the Riga City Council.”

To those skeptics who doubt the transparency of the aforementioned enterprise and the quality of its management practices, we can point to the same Latvian Corporate Governance competition, in which RNP received an award in the category “Leap into Openness” at the end of 2025.

“The award,” is noted in J. Lange's document, “was presented for the significant contribution of the enterprise to protecting client interests and strengthening openness, as well as for professional actions that promote fair competition in procurement processes in Latvia.”

Port in the Fog

As for the former largest source of income for the capital, things are complicated. At the Cabinet of Ministers meeting on May 13, 2025, a new wording of the Ports Law was adopted, which, according to part 1 of Article 7, states: “Port management is a separate legal entity of public law... Thus, the management of the Riga and Ventspils ports are now separate legal entities of public law, the regulations of which are approved by the Cabinet of Ministers.”

In the first reading, these amendments passed through parliament on May 29 of last year, however, in the second reading, which was supposed to take place after the municipal elections – on June 19, they were... excluded until further decision by the Saeima commission.

“The municipality has no information about further decisions of the commission,” states the report of the executive director of Riga. “Accordingly, with the support of the Saeima for the proposed decision or the actual repeal of the reform, the decisions made by the municipality... will need to be recognized as having lost their validity.”