According to the PUC’s decision, Latvijas Pasts submits to the regulator the requested draft of the press delivery tariffs without a compensation mechanism
17.04.2020
Implementing the decision of the Public Utilities Commission’s (PUC) Council On the Universal Postal Service Obligations of the 3rd October 2019, Latvijas Pasts has submitted to the PUC a draft of tariffs for the delivery of subscribed press publications from 2021, calculated in accordance with the Methodology for the Calculation of Tariffs set by the PUC. This is not a proposal for delivery tariffs initiated by Latvijas Pasts, but the implementation of the PUC’s decision, including compliance with the applicable regulatory framework, which sets forth a single delivery tariff throughout the country. Latvijas Pasts believes that it would be more efficient and logical to differentiate the tariff according to the geographical areas of delivery and the volume of delivery. In addition, it should be emphasised that Latvijas Pasts had to calculate and submit the delivery costs without incorporating a possible compensation mechanism, as a particular decision regarding it has not yet been made in the country.
Latvijas Pasts has submitted to the regulator and for publication in Latvijas Vēstnesis a draft of tariffs for the delivery of subscribed press publications from 2021, which was prepared in accordance with the PUC’s Methodology for the Calculation of Tariffs and which had to be submitted in April 2020 as specified in the decision of the PUC’s Council On the Universal Postal Service Obligations of the 3rd October 2019. Latvijas Pasts points out that the submitted draft is not a tariff proposal initiated by Latvijas Pasts, but a cost calculation, observing the terms and conditions of the PUC’s tariff methodology.
In addition, it does not incorporate a mechanism for compensating for the delivery-related losses between the delivery prices set for press publishers and the actual delivery costs, as currently no specific compensation mechanism has been established in the country for the period from 2021 and decisions on this matter have not been made yet. Consequently, the submitted draft cannot be considered as a tariff proposal initiated by Latvijas Pasts, but as fixation of the costs in accordance with the Methodology for the Calculation of Tariffs set by the PUC.
Latvijas Pasts considers that the regulatory framework should waive the requirement to set a single delivery tariff for subscribed press publications throughout the country and should base its calculation on the factors that significantly affect the delivery costs, such as the distance or the number of units. Otherwise, the draft of tariffs does not reflect the actual situation where some of the delivery costs could even be reduced if the geographical areas of delivery and the delivered volumes were respected.
Public disclosure of this draft at present may create a misleading impression of the proposal initiated by Latvijas Pasts, which does not correspond to the truth, because Latvijas Pasts, as stated above, has a different view on tariff formation, which does not always mean an increase. It would be logical to wait for a concrete decision on the model of the compensation mechanism prior to submitting such costs.
Latvijas Pasts has repeatedly drawn the attention of the Ministry of Culture and the Latvian Association of Press Publishers to the need for maximum rapid action in developing the new compensation mechanism, taking into consideration both the deadline set by the PUC for submitting a draft of the delivery tariffs in April 2020 and the fact that in the middle of 2020 Latvijas Pasts must enter into contracts with press publishers for deliveries in 2021.
It should be reminded that the compensation for the losses of delivery of subscribed press publications is the payment that Latvijas Pasts receives for the work actually carried out, delivering subscribed press publications throughout the country at the prices set by the state, which do not cover the actual delivery costs. In accordance with Section 21 of the Transitional Provisions of the Postal Law, losses incurred in providing subscribed press delivery services consist of the difference between the actual costs of subscribed press delivery services and the prices set in accordance with the procedures referred to in Section 322 of the Postal Law.
Cabinet’s Regulations No. 292 of the 28th of May 2013 – Regulations on the Prices of Delivery Services for Subscribed Press Publications set the prices for press publishers that they pay to the universal postal service provider. However, the prices specified in the Cabinet’s Regulations form only a part of the total actual delivery costs of subscribed press publications, thus causing losses to Latvijas Pasts.
The universal postal service provider calculates the losses in accordance with the PUC’s Methodology for the Calculation of Tariffs of the Universal Postal Service and the Methodology for the Calculation and Determination of the Net Costs of Fulfilment of Obligations of the Universal Postal Service and submits the calculation to the Ministry of Transport together with the audited report.
About SJSC Latvijas Pasts
Latvijas Pasts ensures the widest availability of postal services throughout Latvia by maintaining more than 600 post offices. The primary function of the company is provision of the universal postal service; Latvijas Pasts also provides commercial transport, express mail, payment, press subscription, retail and philatelic services. Latvijas Pasts is a wholly State-owned company with over 3,400 employees. The quality measurements of Latvijas Pasts domestic mail deliveries are regularly conducted by Kantar TNS, one of the leading market, social and media research agencies in Latvia. In turn, the quality measurements of the cross-border deliveries are provided within the framework of the International Post Corporation through the intermediary of the research companies Kantar TNS, Ipsos and Quotas.
Additional information:
Gundega Vārpa | Head of External Communications
