Chaotic Latvian train tender put on hold

The Public Procurement Monitoring Bureau has banned the Pasažieru Vilciens rail passenger carrier from concluding a train supply contract with the Czech company Skoda Vagonka, according to information released by the Public Procurement Monitoring Bureau and reported by the LETA newswire.

The Public Procurement Monitoring Bureau has banned the deal after reviewing a complaint filed by Spanish company Patentes Talgo S.L. (Talgo) over the procurement procedure organized by Pasazieru Vilciens to purchase new electric trains.

The Public Procurement Monitoring Bureau said that Talgo appealed the results of the tender because it had objections to the power consumption estimate provided by Skoda Vagonka. The Public Procurement Monitoring Bureau agreed that Talgo was right to question whether the energy saving equipment offered by Skoda Vagonka would be included in the Czech company’s trains in the first place and whether the information provided by Skoda Vagonka about its trains’ energy saving properties was reliable.

In their application, Talgo representatives also claim that the Czech company’s estimate of train maintenance costs is unreasonably low and does not include unscheduled repairs. The Public Procurement Monitoring Bureau has found these considerations to be substantiated.

Upon assessing Talgo’s application, the Public Procurement Monitoring Bureau has decided to prohibit Pasazieru Vilciens from concluding the purchase agreement with Skoda Vagonka and to invalidate the results of the procurement procedure. The Public Procurement Monitoring Bureau has also given Pasazieru Vilciens 20 days to deal with violations found in the process of reassessing the bids submitted in the tender.

Pasazieru Vilciens representative Egons Alers told LETA that the company’s legal and technical experts are currently going through the Public Procurement Monitoring Bureau’s decision and that steps would be taken based on the bureau’s instructions to enable the company to purchase the new passenger trains after all.

As reported, four companies offered to supply 32 new electric trains for Pasazieru Vilciens - Talgo, Polish subsidiary of the Swiss company Stadler, Spain's Construcciones y Auxiliar de Ferrocarriles (CAF), and Skoda Vagonka. Pasazieru Vilciens picked Talgo's bid, which offered to provide the new trains for EUR 225.303 million.

However, after Skoda Vagonka and CAF filed protests against the procurement procedure, the Procurement Monitoring Bureau banned Pasazieru Vilciens to sign contract with Talgo. After a repeat review of the bids, Pasazieru Vilciens decided to sign contract with Skoda Vagonka, which was asking EUR 241.888 million for the new trains.

Pasazieru Vilciens reported that the tender’s original winner, Spanish company Talgo, had offered to supply the trains for a lower price but that the maintenance costs offered by Skoda Vagonka for the trains’ 35-year lifecycle were lower, which meant lower overall costs.

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