Blog entry

Way off track in Riga, as controversial EU-funded tram project plows ahead

Half a year ago I questioned a EUR 100 million investment in the project dubbed the “Cemetery tram line”. The Riga City council continues to push for the construction despite its questionable value for the general public:

By all standards, it is a very expensive project;
It will primarily serve a small posh area;
The involved construction company has suspicious connections with high-ranking officials within Riga’s municipality;
Project planning process is shielded from the public view and commentary.

My complaint letters and several meetings organised at the highest level had barely any impact. Even placing the project and its questionable value for money in the political spotlight did little to shaken the decision-makers’ faith in the dubious project.

Skanste: the [future] cultural hub

The justification for a tram connection to Skanste rests on ideas and assumptions one less realistic than the other. For example, I was told that Skanste will become home to a number of initiatives essential for Latvian art and culture. Among others, there will be a:

‘multifunctional cultural centre’ that can be used as a concert hall, art gallery, exhibition space, or a venue for corporate events, with a capacity to host 1000+ guests;
Museum of contemporary art; and
House of music.

The Skanste development agency website says:

In the Riga city development strategy for up to 2030, Skanste has been defined as a priority territory for development and is set to become the 21st century business card of Riga: the central business district of the capital, a platform for European-scale events and, what’s most important, a quality life and work environment for many thousands of Rigans.

The plan in place predicts a substantial growth for Skanste – from the current number of 1 300 residents to as many as 37 000 residents by 2024. The growth of public and residential spaces will follow. Now, Skanste developers are pushing for the tram line.

Private interests

All those plans can be traced back to private sector representatives with business interests in the matter. Their participation, much-needed but absent for a long time, was welcomed by the Riga City Council. Never mind the not-well-connected ‘ordinary people’ who are also in need of convenient, environmentally-friendly tram infrastructure.

Plavnieki host 30 times more inhabitants than Skanste and also requires more developed transport lines

Photo by Kārlis Dambrāns – CC BY-SA 2.0

I see the rationale; boosted by private investors, Skanste will develop at lightning speed. Maybe this is what is written in the secret part of the project proposal that is still not available to the public? The confidential document was meant to explain the choice of the tram line and its role in increasing the capital’s environmentally-friendly public transport rolling stock, as well as to promote the use of public transport in Riga more broadly.

Talis Linkaits, a traffic and spatial planning expert commented:

The Skanste tram line project is an example of wasting EU funds. The whole idea of the project is the result of Skanste’s real estate lobby. […] At the moment, there are around 2000 inhabitants in Skanste, and by constructing the tram line in this direction we risk having a route to nowhere.

Reality check

It is an open secret that the local business sector is highly unstable: ever-changing regulations are a real plague for Latvian banks. The privately-held ABLV Bank, the major investor in the grand Skanste project, is no exception. While decision-makers confidently use ABLV Bank’s interest in Skanste as a predictor of future growth and prosperity of the region, the future of the bank itself is under question.

U.S. authorities accused ABLV bank of involvement in money laundering schemes and bribery. On 26 February 2018, bank shareholders decided to start the liquidation process to protect clients’ and creditors’ interests. This also means that “New Hanza” and all other Skanste-related projects and construction works are now stopped.

This is yet another example that demonstrates how businesses can have colossal plans and make irresistible promises to entice the government into redirecting public funds into “appropriate” assets. This blind belief in the private sector without proper risk assessment is the approach too familiar for the Riga residents. The abnormally expensive Southern Bridge is another case in point.

The same goes for the tram line. How much can we afford to take from EU funds? The strategy to “take it all” is one way to do it. But it is also the hardest one for regular taxpayers.

This month the EU sets its priorities for the next budget period 2020 – 2027, and we need to push for more public participation and improved transparency on the allocation, disbursement, and use of funds that are meant to work, first and foremost, for the people.

Join the campaign #PeoplesBudget and see how you can shape the budget of Europe.

The Baganuur women affected by coal burning

Long and cold winters in Mongolia prompted the people in the capital – Ulaanbaatar – to come on the streets and protest against high levels of air pollution coming predominantly from coal burning.

Existing combined heat and power coal plants in the capital already account for over 50 % of SO₂ and NO₂ emissions in the city. Another massive contributor are the urban poor in Ulanbaatar. Living in ger districts disconnected from public utilities, including heating, they are forced to rely on coal and waste burning as the primary source of energy.

Overlooked social impacts

Besides environmental and health concerns, coal mining in Baganuur has excerbated certain social issues that are systematically overlooked. Domestic violence, economic exclusion and unemployment have been on the radar of concerned women’s groups for some time.

In the light of Chinese companies’ interest in construction and expansion of coal mines and other energy projects in the region, these impacts are only expected to increase. The influx of foreign workers and increasing crime rates will put pressure on the already strained social infrastructure.

Moreover, impact assessments of the Baganuur coal mine expansion are not consulted with local population, which really worries local women groups.

Coal – a false solution

The dominance of coal in the Mongolian energy sector strategy and plans for new power facilities in Ulaanbaatar and Baganuur rest on myths about coal, rather than robust feasibility studies, impact assessments and an analysis of alternative scenarios.

The strategy prioritises a number of coal-based power plants across the country using arguments of reliability and affordability of coal-based energy that have been proven wrong. Mongolia’s ambitions to export energy drive the expansion of the mining industry.

Last year’s Bankwatch report argued that the energy plans of the Mongolian government – which have the backing of international financial institutions – are disconnected from the urgent need to improve the efficiency of an ageing energy system and to address the massive potential of solar and wind energy in the country.

One of these, the World Bank’s Mining Infrastructure Investment Support (MINIS) project, reviews the feasibility of the Baganuur mine expansion and carries out a cumulative study of its potential impacts. None on these studies have been made available for public review and commenting.

While international financial institutions continue neglecting innovative, efficient and resilient solutions (decentralised development of solar and wind energy, and demand-side energy efficiency measures) and, instead, promote the continued dependence on coal and the export of commodities, women groups of Baganuur would like to be sure the impacts on women would not increase.

Indigenous Svan communities unite to block hydro development in Svaneti

Representatives of all 17 communities of Upper Svaneti gathered in Mestia for a traditional Svan Council meeting, Lalkhor, to oppose the development of gold mining and hydropower projects in Svaneti that threaten local livelihoods and ecosystems.

The protesters restated their demands – discontinuation of over 50 dam projects, including the Khudoni and Nenskra dams and the Mestiachala hydropower plant.

The Lalkhor came up with the joint statement and developed a petition addressing the Georgian government, diplomatic missions accredited in Georgia, and international financial institutions.

The Lalkhor demands to recognise Svans as ancient, indigenous, aboriginal, autochthonic people with appropriate rights for customary and community property in Svaneti and to ban development of any infrastructure without their prior consent.

“We categorically and forever prohibit construction of hydropower plants, gold mining and any other activities that harm natural livelihoods, material and non-material cultural heritage! From now on, the HPPs in Svaneti will not be constructed. As defined by the international legislation, any infrastructural development project will require our consent,” says the statement.

In relation to the Lalkhor meeting and demonstration that was held in Mestia, the special police forces were called to the region to presumably counteract the protest.

About Mestia:

Mestia is a home for an indigenous community and a historical starting point for alpine climbers and adventurers. Recently, its hydropower potential turned the region into a honeypot for large dams investors.

The interests of local communities are swept aside, and the potential construction risks are largely underestimated or ignored altogether. Besides adverse effects on local livelihoods, a cascade of dams will irreversibly change the pristine mountains of Svaneti leading to a number of associated geological risks.

Cohesion at crossroads: What we need from the next EU budget

It went relatively unnoticed, but last week signalled another important moment for the Future of Europe. Last Wednesday (February 14), the European Commission published a document which sets out options for the EU budget post-2020, and includes some concerning signals about the role of cohesion policy in the European project. Not least, this document also foreshadows the option of significant reductions in cohesion policy funding.

Surely, the EU budget should cut inefficient and harmful spending, but an ambitious budget also needs to be transformational – a budget that is a key pillar in determining the future of Europe. This has become a particularly contentious question, but the Commission’s paper avoids many of the real questions of how reforming Europe’s cohesion policy could in fact contribute to addressing it. And it’s all the more worrying when this paper comes as civil society is increasingly being pushed out of the political debate about the next EU budget.

In a recent opinion article, MEP Lambert van Nistelrooij broke down the Commission’s proposal into three scenarios:

“Scenario 1: Maintains support from the European Regional Development Fund, European Social Fund and the Cohesion fund for all Member States. Efficiency gains will be made through modulating aid intensities and better targeting support.

Scenario 2: Ending support for the more developed and transition regions, leading to a reduction of EUR 95 billion. Countries like Belgium, Germany, the Netherlands and even many regions in Spain and Italy would lose support.

Scenario 3: The third and final option would discontinue investment for less developed regions altogether and focus solely on cohesion countries. This would lead to a reduction of almost EUR 125 billion.”

And there are serious questions underlining the debate around the future of the EU’s cohesion policy. What will it mean for Europe if cohesion ceases to be a pan-European policy? And how might cuts affect vital investment choices in public infrastructure towards the sustainable future Europe needs?

Last week, in response to the Commission’s document, the President of the European Committee of the Regions, Karl-Heinz Lambertz, warned that EU cohesion funds must not be cut and must continue to be made available for all regions and cities if the European Union is to have a more united, inclusive, greener and prosperous future. “If we want a Europe of ambition, we need a budget of ambition. The EU should be doing more with more: we will never achieve a truly social, inclusive and greener Europe that improves the lives of every citizen unless Member States contribute more to the EU purse. Europe’s future now lies in the hands of the leaders of the EU27. We hope that they create a people’s budget that is effective, flexible and ambitious to allow Europe to respond to the challenges of today and overcome the challenges of tomorrow,” Lambertz wrote.

The current multiannual Finance framework (MFF) that covers the period of 2014-2020 and includes a budget of close to one trillion euro, which corresponds to roughly one percent of EU gross national income of the EU Member States. Cohesion policy represents about one third of the EU budget, and in several Member States, public infrastructure investment is highly dependent on EU Funds.

It is also one of the most visible components of the EU Budget, with potential to improve the daily lives of citizens. Cohesion funds help Europeans access finance for warmer homes, they support measures that lead to cleaner air, and they help make our public spaces greener. It would be a grave mistake to cut this piece of the budget at the very moment when many citizens actually doubt the added value of the European project.

For Latvia, where I live, EU funds are hugely important. According to the Commission’s paper this is one of Europe’s least developed regions, and indeed nearly 70% of the total public finance available in Latvia is EU Funds. I cannot imagine how Latvia would look without EU-funded investments in areas like energy efficiency, nature protection, water and waste management,. not to speak of the impact on the country’s economic development.

At the same time, it is disappointing that all attention remains on structural matters with little political discussion on how a future cohesion policy could be made genuinely transformational.

There is a lot of work to do here. Despite many positive programmes, EU funds from cohesion policy funding are too often unsustainable, contradictory to the EU’s climate and energy goals, or commitments on sustainable development. The case of Bulgaria’s Kresna Gorge case is a prime example. Billions of EU funds could soon be spent on building a motorway through this beautiful Natura 2000 site, where alternatives exist, and without the proper participation of local citizens and farmers. These and other cases illustrate how Europe’s cohesion policy still lacks the mechanisms to exclude or reduce harmful and contradictory spending.

The EU’s future budget needs a clear definition of the sustainability criteria with a balanced view of the social, economic and environmental dimensions of sustainable development. That is the only way to reduce uncertainties in decisions about EU funding. The EU budget also needs to include stronger ex-ante conditionalities (including social, climate and environmental impact assessments and safeguards) for all programmes and instruments that could help ensure that funds are properly spent in support of sustainable development across Europe.

The same applies to climate mainstreaming – that is, EU funding that serves higher ambition within the EU 2030 climate and energy framework and in line with the Paris Agreement. In some countries, such as Latvia, the National Energy and Climate Plan is still a mystery, but the next EU budget can and should include financial incentives for increasing national ambitions that would in turn be reflected in these climate action strategies.

I have seen plenty of examples of policy incoherence and EU spending on unsustainable or harmful projects all over Europe. So I strongly believe that a reform is needed, but a truly ambitious reform would be one that makes the next EU budget `sustainability, biodiversity and climate proof`, and guarantees the implementation of the Paris Agreement and the Agenda 2030 for Sustainable Development.

Spending under the cohesion policy often lacks transparency, and it does not properly engage citizens and local stakeholders. But it doesn’t have to be this way. We need clear rules for spending and improved transparency on the allocation, disbursement and use of funds as the basis of a just and integrative EU budget after 2020.

The Commission’s document from last Wednesday talks about investing massively in the digital revolution – shouldn’t that include new, user friendly tools to help all citizens, and investors, easily see where EU funds are flowing in their area, and who is benefiting? There is a serious lack of clarity about the results and benefits of EU funds for citizens. Europeans need to know how EU public money facilitates sustainable development and wellbeing, how it helps building a sustainable economy, and eventually how it shapes the narrative for Europe..

Lambertz of the Committee of Regions, is right to call for a People’s Budget at this very moment. Civil society groups across Europe have been campaigning exactly for this since mid-last year. The cohesion policy must not be castrated. If the Commission does not seize the moment to reform it to become the driver of genuinely transformational projects empowering citizens to build a more environmentally and socially sustainable future, then we risk further Brexits.

To read the positions and work of the PeoplesBudget campaign, a cross sectoral alliance representing over 70 civil society organisations, please visit www.peoplesbudget.eu

Protests spread in Western Balkans along with air pollution

On Saturday hundreds marched in the centre of Tuzla to protest worsening air quality in the coal-dominated town of Bosnia and Herzegovina’s north-east, carrying banners that read “Clean air, not cancer!” and “Stop poisoning us!” .

As the legal limits for pollutants PM2.5 (fine particles) and SO2 were breached during this long winter, the Clean Air Movement – a group of citizens living in Tuzla concerned about the worsening health condition as a result of air pollution exposure – took to the streets to demand that authorities find long-term solutions to this ever-present problem.

The air quality in Tuzla is notorious, ranked second by the World Health Organisation among Europe’s most polluted towns in 2017. The news echoed far and wide and was reported on by the BBC, Arte TV and RAI.

In 2017 Bankwatch’s independent dust metering (PM10 and PM2.5) revealed worsening levels of emissions compared to the same period in 2016, which is particularly worrying given that the year was much warmer, so in theory the need would be less for individual house-hold heating – the scape goat used by authorities.

These findings have been used by locals to argue that source of the pollution is the town’s 715 MW power plant, which burns approximately 3.8 million tons of brown coal and lignite a year. A striking observation in both 2016 and 2017 independent monitoring periods is the pattern of emissions skyrocketing as soon as it gets dark, after seven in the evening, suggesting that the dust filters at the Tuzla power plant are turned off during the night.

In spite of this, a new unit is planned by the state owned energy company, Elektroprivreda BiH, which signed a financing agreement with China Exim Bank in November 2017. The 450 MW proposed Tuzla 7 project would require additional coal capacity.

The new unit would only replace two of the four current units, increasing the overall capacity and perpetuating the particulate matter pollution attributed to coal mining and the coal ash deposit. Regardless of how modern and efficient the new unit may be, coal mining and ash storage will not decrease.

Our 2017 monitoring results, based on an analysis of wind direction, show exactly that PM 10 levels were much higher in 2017 than in 2016, pointing more towards the ash dump and the mine, rather than to combustion processes (either the power plant or traffic, normally responsible for PM2.5 emissions and less so than PM10).

Tuzla 7 promoters claim that the new unit would be in line with EU pollution standards, but the project’s environmental permit clearly suggests the project will not meet the recently-adopted Best Available Techniques (BAT) . Rather, the project is much more likely to result in an increase of coal that would need to be mined and an increase in ash production, which, as seen above, plays a critical role in aggravating local air pollution.

Local opposition to a new ash disposal site is high as well, with the local community representatives delivered a petition with 2100 signatures against the proposal to the Federal Ministry of Environment and Tourism in April 2016.

With a growing citizens’ movements against industrial pollution in the Western Balkans and increasing evidence that coal power plants carry much of the blame, the region deserves an energy transition away from coal, as well as a real consultation with the public. Authorities need to act on the locals’ concerns when planning for the development of the country’s energy sector, a process now underway in Bosnia and Herzegovina.

Bulgaria’s EU presidency off to rocky start, as protests highlight EU funds for nature destruction

For almost two months now, Bulgarians from across the country and abroad have taken to the streets to defend the country’s natural mountainscape against new developments.

At stake is the Pirin National Park, home to bears, chamois, wolves and centuries-old pine forests whose unique value has won it the status of a World Heritage site.

What sparked the protests was a government decision from 28 December 2017. This decision seeks to change the park’s management plan and effectively opens the door to new development, commercial construction and logging of up to 48 percent of the park’s 400 square kilometres territory. But our protesters are not only about Pirin – these are about democracy and about ending corruption.

About 15 years ago ago the ski lift and new ski runs were allowed in the National Park. The company involved performed a number of illegal developments on the Park territory without being ever fined for polluted river, illegal logging, building illegal ski runs and a huge reservoir lake, etc. People fear that the new plan is just a pre-text for another massive destruction of the mountain.

The current management plan only allows for construction in 0.6 percent of the park’s territory, but with the changes approved a massive extension is now possible. A ski resort located in the nearby town of Bansko is already encroaching on Pirin’s mountainous forests, but the owners have future plans for expansion. The current concessioner has already gone beyond the allowed territory of the concession with an estimate of 60 per cent.

The park’s management plan is funded with EUR 10 million from the previous EU budget period (2007-2017), and both the parks authority and the Bansko municipality are beneficiaries of EU funds. It is especially worrying that the European Commission has permitted EU funding for environmental destruction, given how poor is the state of infrastructure in the town of Bansko.

Za Zemiata and other civil society groups have already warned that the park’s new management plan could allow, not only for further development of the ski resort at the expense of the vulnerable natural habitats that are part of the World Heritage site, but also for clear cutting of centuries old forest and thus endangering protected species.

The government has repeatedly tried to argue that it’s local residents who stand to gain from this development. But there is a growing recognition among the public that the ultimate beneficiaries would in fact be the current concessioner and big hotels.

The once small, picturesque town of Bansko is already littered with construction works, ghost houses that stand empty throughout most of the year, and water pollution that the local residents believe originates from the artificial snow used in the ski resort.

In fact, the media in Bulgaria hardly reported on the issue until it received considerable international attention. That is why protesters, who wanted to ensure the government does not ignore their call, felt they need to be particularly creative and organised flashmobs, marathons, music concerts, art installations and even meditation sessions.

The inauguration of Bulgaria’s EU Presidency on January 11 was met with an escalation of the protests when over 8,000 people marched on the streets of Sofia and more in towns across the country and throughout Europe. Rallies took place even in Australia and Tanzania to join the calls to protect the Pirin national park.

Protesters now gathering in Sofia every Thursday have developed a set of demands from Bulgarian policymakers. They urge the government to withdraw its decision on the park’s management plan, they demand the resignation of the infamous climate sceptic environment minister Neno Dimov, and they want full transparency about the concession contract including the identity of the real owner of the ski resort.

New demands were added following the visit of the co-chair of the European Green Party Ska Keller in Bulgaria last week. She joined the Thursday night protest and visited local communities in both the Kresna gorge (another biodiversity hotspot threatened by plans for a motorway) and Bansko. But in response, Bulgaria’s nationalist Deputy Prime Minister published a statement insulting the German MEP and threatening to expel her.

But the protesters are not backing away. In the latest Thursday rally, in front of the Ministry of Environment and Waters, protesters also demanded government stops the proposed changes to both the Forest law, which would allow for opening up the forests to cutting and construction, and the law on protection of agricultural lands, which could make development in such areas much easier than it is now. Speakers at the demonstration also called for an investigation into the over-construction of the Black Sea coast.

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