EU funding suspended for proposed Rīga tram line amidst graft scandal

The Central Finance and Contracting Agency (CFCA) has suspended the release of the European Union’s co-funding to the Skanste Tramline project implemented by Rīgas satiksme municipal transport company and two infrastructure upgrade projects in Daugavpils, the government agency informed LETA.

This is related to the ongoing probes related to profiteering and bribery both in Rīgas satiksme and in the Daugavpils City Council; the step aims to prevent possible misuse of EU funds. 

The disbursement of EU funds has been stopped for two school renovation projects implemented by the Daugavpils City Council and the Rīga tramway infrastructure development project of Rīgas satiksme.

“Everyone must realize the fundamental truth – if fraud or involvement in corruptive activities are discovered in an EU-funded project, the EU funding is taken away. There is zero tolerance to fraud and corruption. And one must also realize the consequences – if EU funding is terminated, the project’s costs remain on Latvian taxpayers’ shoulders,” said CFCA director Mārtiņš Brencis.

The CFCA decision to suspend the EU funding ensures that Latvia does not lose the EU co-funding allocated to these projects and in case of necessity the money can be reallocated to other projects.

The total costs of the Skanste Tramline project are €97.4 million, excluding VAT, with EU co-funding accounting for €65.66 million of that amount.

The cost estimate of a school gym renovation project in Daugavpils is €675,500, with the EU providing €398,170 of the total costs. Another school infrastructure upgrade project in Daugavpils is expected to cost €6,268,270, with EU co-funding making up €2,795,506.

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