The first round of construction works requires EUR 165 million without value-added tax. When signing the contract, Latvia will assume the State budget liabilities only for the first round of construction works, for which financing of the Connecting Europe Facility has already been ensured, the Ministry of Transport said.
The government has also given permission to contract for main line procurement. The tender amount is substantial – EUR 3.7 billion.
The contract includes the construction of the Rail Baltica main line outside Rīga in the sections Estonian border-Vangaži, Vangaži-Salaspils-Misa, Misa-Lithuanian border, as well as a section of the railway line, which includes Riga City crossing and connection to Riga airport in two branches. Construction work of the Rail Baltica main line outside Rīga will include construction of the railway substructures and superstructures (tracks). These works are divided into two regions of approximately 230 kilometers (km): southern (approximately 130 km long) and northern (approximately 100 km long), which in turn are divided into shorter stages or building permits.
However, according to the government, the state is only committing to the part of EUR 165 million for which European funding has already been received.
Starting every next job will need to get a new government permit, and stages of construction work are to be ordered according to the availability of financing.
“This only happens when building permits have been received, when properties have been acquired, when there is certainty about the availability of funding,” Transport Minister Kaspars Briškens (Progressives) said.
Briškens said the money received so far had been at 85% European co-financing rates. “No one has guaranteed Latvia or other Baltic States that 85% of European Union funding will be available in an unlimited amount,” the politician said.
As a result, alternative sources of financing are currently to be actively sought: both European Union fund programs and private-public partnership opportunities, and pre-financing borrowings that could be repaid from funds in the future should be considered.
Speaking about the total construction costs of the project, Briškens told Latvian Television that the cost-benefit analysis of possible first-phase scenarios of the project has not yet concluded.
“In the long term, we want to create infrastructure in full scope, including two tracks, full integration of Riga, also freight bypass with the multi-modal Bridge of Saulkalne. Estimates are large and scenario-dependent, but the increase compared to the 2016 estimate of 1.9 billion is substantial,“ Briškens said.
“We will name the exact digit at the moment when it is clear what scenario the Latvian government will choose.”
Meanwhile, the finance minister drew attention to the fact that there has been no one in charge of the project for years. This is something the government is determined to change. The Transport Ministry promises to come up with concrete solutions by spring.
