Topics Topics

Attempt to calm fears over train lease costs

Board chairman Artis Brikmanis of state-owned joint-stock company, the rail passenger carrier Pasažieru Vilciens (PV) said Wednesday he has assured Transport Minister Anrijs Matīss that no additional state subsidies would be required to cover the costs of leasing a new fleet of electric trains for Latvia’s passenger rail system.

“We are in fact operating under the current scope of subsidies needed to keep running. There have been reports that we will have problems with financing the transaction but this is not true,” the CEO told the BNS newswire Wednesday. He explained that the lease agreement for the new trains would mean economic gains worth up to €37 million euros over its duration.

However, Transport Minister Anrijs Matīss has questioned whether the transaction should proceed in the face of looming deficits in the company’s budget.

The decision comes also in the wake of appointed board member Aigars Štokenbergs’ resignation over objections regarding available funding sources for the deal. “We can decide when the money is there,” he said. “I cannot in good conscience drive the enterprise into obligations that have no financial coverage whatsoever,” he told Latvian Public Radio Tuesday. “This is a pipedream for which PV has no budget in 2014,” he said. “I’m getting out before the board meeting full of deaf ears.”

As reported, PV announced the selection of Swiss firm Stadler Bussnang to supply 25 electric trains in a 15-year lease agreement worth €150 million euros Tuesday. The current fleet is rapidly nearing the end of its term of use, prompting the tender announcement in November 2013. The two other applicants in the tender, from Poland and South Korea, respectively, were both rejected according to the qualification requirements, leaving Stadler as the sole pretender to the bid. The second of the rejected bidders, South Korea’s Hyundai group, can still appeal the result within 15 days of Tuesday’s announcement.

PV was established in 2001 to separate domestic passenger services from other functions performed by the state-owned Latvijas Dzelzceļš (LDz). Although initially PV was a fully owned subsidiary of LDz, in October 2008 it was restructured into an independent state-owned company.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Economy
Economy

Please be aware that the LSM portal uses cookies. By continuing to use this site, you agree that we may store and use cookies on your device. Find out more

Accept and continue