New passenger train tender halted

The newly-appointed board of Latvia’s passenger rail carrier Pasažieru vilciens (PV) has canceled a controversial tender for leasing a new fleet of electric trains, which led to the sacking of their predecessors.

Company spokeswoman Ieva Miežubrāle told media Wednesday that the procurement was being called off because to continue the search for a long-term lease agreement would be contrary to the interests and financial capabilities of the company.

In the two weeks since its appointment the board has perused and approved the company’s annual report for last year. The new board has prepared amendments to the state enterprise’s 2014 budget that will optimize resources and reduce losses by at least €5m.

By the end of August the board plans to have completed a roadmap for achieving the successful turnover of a new fleet of electric locomotives and cars for Latvia’s passenger train system by 2016.

In addition, the PV board has negotiated in principle a fee-schedule agreement with state joint-stock company Latvijas dzelzsceļš (LDz) to continue using its infrastructure facilities and services.

The leasing tender was announced in November 2013 as the best way to replace Latvia’s aging fleet of passenger trains in the long-term. While the winning bid was awarded to sole remaining contender Stadler of Switzerland amidst doubts over PV's ability to finance the terms, South Korea’s Hyundai Rotem challenged the results after its significantly less expensive offer had been disqualified by the previous PV board following considerable delays in the procurement process.

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.

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Economy
Economy