Rail Baltica project faces money issues in Latvia: LTV's De Facto

The total costs of Rail Baltica's Latvian section have risen a lot. Instead of the two billion euros initially discussed, it could actually cost six or seven billion. The existing inflow of money could not even be enough for the construction works already ongoing, Latvian Television's De Facto reported on April 23.

A recent mistake lost EUR 100 million that could have gone to the project. Last year, the Transport Ministry pitched several project funding applications to the European Union's Military Mobility Fund. The biggest of them was for the bridge across the Daugava near Salaspils, within the Rail Baltica framework. It turned out afterward that the application had not been properly formatted and was therefore not considered. Two other projects in Rīga Free Port and one from the Latvian Air traffic manager got the funding for the total amount of EUR 37 million.

A service inspection was done in that case, with two officials lowered in position. Current Transport Minister Jānis Vitenbergs said that "this issue will be under my control. We will start preparing new applications in time."

The 100 million euros would have benefited the Rail Baltica project. The lack of steady funding is currently one of the biggest problems of the project.

The biggest construction object that has already been started is now the Central Station and its bridge across the Daugava. The initial sum agreed on with the builder Bererix was EUR 430,538,203. Over three years the sum has accumulated to EUR 523,329,072, not counting the indexation in accordance with inflation which could add another 100 million. 

“In the course of the performance of the contract, we have met the need to improve construction project requirements, guidelines have been established which meet stricter explosion safety requirements, stricter operational requirements, and many functional requirements have also been improved,” said Kaspars Vingis, Chairman of the Management Board of 'Eiropas Dzelzceļa Līnijas' Ltd.

The time limits originally set for the works have also been extended. The project of the station's vicinity and the bridge over the Daugava should have been completed by 2027, but it is likely that it could actually take place later.

"We have some jobs that have gone much more slowly because there is no funding. Rather, it is not clear whether it will be included in the contract or not. We have had very long negotiations, agreements on these attachments, which often take up to half a year. And that certainly doesn't help the pace. At the moment, it looks like the biggest issues have been resolved, we are going at a good, steady pace,” Bererix Executive Director Guntis Āboltiņš-Āboliņš said.

Asked how much funding is currently available for the contract of 523 million, Vingris said: “I can't say clearly right now. At the moment, we have the mention of some 200 million, which is the money we have received so far and for which orders have been made. In fact, that means work until the end of the year."

Funding is one of the reasons why a special committee was set up in the government. At the end of the year, it is planned to finally start the construction of the tracks. Until then, nearly two thousand land assets have to be repurchased, and now only a hundred have been seized.

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