New trains by 'end of next year' says rail chief

Passenger Rail (PV), which is presenting a new company development strategy on Wednesday, will try its luck in financial markets to procure funding for new trains, Andris Lubāns, chairman of the board of Passenger Rail told Latvian Television Wednesday morning. If all goes well, passengers will be able to ride the new trains by the end of 2016. 

Previously, it was thought that the new trains would be financed with money from the EU Cohesion Fund and from the company's own pocket.

Andris Lubāns told the Rīta Panorāma broadcast that the new development strategy will be a good basis for convincing banks to hand out loans for purchasing new trains, which could be put to operation by the end of next year.

As the funds will be coming from a private source this time, the company will have to prove to lenders that Passenger Rail will be able to function well in the next years to pay back the loans.

Previously, Pasazieru Vilciens held the tender for supply of 34 new electric trains and seven diesel trains, and the Spanish company Construcciones y Auxiliar de Ferrocarriles was declared as the winner of the tender. The procurement costs were estimated at 144 million lats (€205 mln).

The tender failed as the agreement was inconsistent with the tender requirements. Subsequently, the project lost access to support from the EU Cohesion Fund, estimated to be about 142 mln euros.

The case of the failed tender is under investigation, having been handed to the prosecutor in June.

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