Major hospital to lose millions of EU funding over missed deadlines

Pauls Stradiņš' Clinical University Hospital will lose €23 million in European Union co-financing due to delays in the construction of the new building complex, the hospital's interim board told Latvian Radio on December 13.

Construction of Stradiņš Hospital A2 Building is still delayed, and on Wednesday, December 13, representatives of the hospital explained to the Saeima Committee on Social and Labour Affairs that due to an incorrect construction sequence at the beginning of the year, mold was detected in the basement of the building, work had to be stopped and the premises disinfected.

The board also said it did not see enough workers at the site and builders were delayed with repairing defects previously found. Construction works are carried out by “Velve” Ltd, but there is also a large variability of subcontractors, which also delays everything.

Previously, the hospital estimated that €46 m of European Union co-financing could be lost due to construction delays, while the estimated amount rose to as much as €70 m in October. However, currently, the manager of the newly appointed board of the hospital Lauris Vidzis said that the amount could be lower/

He said if all deadlines are met as planned by the end of the year, then some €23.3 million co-financing could be lost from the European Regional Development Fund.

Given the loss of co-financing, members of the Social and Labour Committee asked what penalties for delays were intended for builders and who overall took responsibility for it.

The hospital's new board said an independent audit of the progress of the project has now been launched and the first results will be at the beginning of the year. The audit will highlight more clearly the responsibility of project supervisors and also sanctions against the builder.

Initially, Stradiņš Hospital's new building was due to be completed by the end of this year, but deadlines were extended in August, and now it should be ready in March 2025.

The total cost of the project is currently estimated at EUR 156 million.

Ministry of Finance spokeswoman Diāna Rancāne noted that although the hospital would not absorb €23 million from the European co-financing state, overall the state would not lose it.

The money will be redirected to the children and youth psychiatric unit of the Children's Hospital, with another part taken over by the Ministry of Health as compensation for previously higher-than-stipulated amounts invested in the project. So the money will stay in the industry.

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