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Project Management in the Port Development Project in Latvia

FEATURED PAPER

By Emīls Pūlmanis

PhD.cand., MSc.proj.mgmt.
State Audit Office (Latvia)
Development project manager

Riga, Latvia

 


Abstract

This paper analyses a case study of performance and compliance audit in the port development project in Latvia. Author has participated in the audit process evaluating project management application in the project implemented by the Riga Freeport Authority and co-funded by the Cohesion Fund “Development of Infrastructure on Krievu Island for the Transfer of Port Activities from the City Centre”. Despite the mass media reports that the Riga Freeport Authority has successfully completed the project, only the construction phase of the project has been completed. During the following two years the stevedore activity must be transferred to the newly built port infrastructure on Krievu Island and coal handling operations must be commenced. In order to implement these activities the stevedores have to build internal infrastructure objects, to install equipment and to restructure logistics. Furthermore, in order to obtain positive opinions from the responsible institutions on the completion of the project and attainment of the defined objectives, by March 2019 it must be proved that the project objective has been reached and the benefits must be presented. The project was initiated in 2006 when the Riga Freeport Authority made a decision on using degraded Krievu Island territories for port activities and commenced the planning estimating that the construction phase of the project would be completed by the end of 2012. In accordance with the initial plans, active cargo handling should be currently taking place in the new port territories on Krievu Island. However, the implementation of the project has been delayed by almost three years (detailed project implementation timeline see as annex 1), as we see it – due to ineffective solutions to project management issues and untimely, poor communication with the parties involved in the project, such as stevedores, builders, credit institutions etc.

Introduction

The implementers of the project have a lot to do in order to be able to be eligible for the full amount of the European Union co-funding intended for the planning period of 2007 – 2013, which amounts to 77.2 million euro, but we already see several factors which constitute a significant risk of corrections in the European Union co-funding. Firstly, during the development process of the project its objectives have been narrowed by cancelling complete removal of port operations from Andrejsala and Eksportosta territories. Secondly, during the project significant changes in its technical documentation have been made by changing the technical solutions and scale of the construction work. Thirdly, in implementing the project the Riga Freeport Authority has failed to provide for complete conformity with the regulatory enactments, such as deficiencies in the formation of the project team, outsourcing for tasks which should be executed by the employees themselves.

Over the last two years the Riga Freeport Authority has worked on problems arise during the previous period due to faulty project management, however the measures taken by the Authority have not been sufficient for prevention or reduction of all the risks. We conducted this performance audit for the purposes of facilitating the progress of other projects co-funded by the European Union, which are important for the State and its inhabitants with special attention paid to the strengthening of project management institutions in the public administration. We thank all the employees of the Riga Freeport Authority, the Ministry of Transport and the Ministry of Finance, the builder’s representatives, experts and others which we asked during the audit to provide their opinions or information, which helped to gain understanding on the implementation of the project.

Meanwhile the Freeport of Riga is an important part of global and regional cargo transport chain as well as of the Baltic Sea region passenger traffic network. Being an integral part of the city of Riga, the port is fully aware of its social and environmental responsibility, so one of the main principles of the Port operation is high efficiency and quality of services provided.

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About the Author

pmwj37-Aug2015-Pulmanis-PHOTO
Emils Pulmanis

Riga, Latvia

 

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Emils Pulmanis is a member of the board of the Professional Association of Project Managers in Latvia and development project manager at State Audit Office of the Republic of Latvia. He has gained a BSc. in engineer economics, a professional master’s degree in project management (MSc.proj.mgmt) and currently is a PhD candidate with a specialization in project management. He has elaborated and directed a number of domestic and foreign financial instruments co-financed projects. He was a National coordinator for a European Commission-funded program – the European Union’s financial instruments PHARE program in Latvia. Over the past seven years he has worked in the public administration project control and monitoring field. He was a financial instrument expert for the Ministry of Welfare and the European Economic Area and Norwegian Financial Mechanism implementation authority as well as an expert for the Swiss – Latvian cooperation program as a NGO grant scheme project evaluation expert. He has gained international and professional project management experience in Germany, the United States and Taiwan. In addition to his professional work, he is also a lecturer at the University of Latvia for the professional master study program in Project management. He has authored more than 25 scientific publications and is actively involved in social activities as a member of various NGO’s.

Emils can be contacted at [email protected].

To view other works by Emils Pulmanis, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/emils-pulmanis/