Economic police probes diesel train upgrade tender, claims daily

The Latvian Economic Police has launched a probe over delays in a €22m project for modernizing diesel trains for the Pasazieru Vilciens (Latvian Railways) national train company, Latvian daily Diena reported Monday.

A letter--apparently obtained by the daily--addressed to the Transport Ministry and signed by Economic Police chief Pēteris Bauska, requests information from the ministry and asks it to assess responsibility of officials responsible for the project and estimate possible losses in case of further delays.

According to the daily, in December 2015 the Latvian Railways board was about to terminate the contract over modernizing 19 diesel trains and to ask €7.5m in compensation from the DMU Vilcieni company that had won the tender two years earlier and, according to the agreement, had to finish the upgrade by September 2015.

However the deadline was extended until June 30, 2016 by Interior Minister Rihards Kozlovskis, at the time serving as acting Transport Minister in place of Anrijs Matīss, who had recently resigned. Currently the Latvian government has granted another extension for the project until September 30.

Pasazieru Vilciens confirmed the news of the probe. The company has received questions from the Economic Police and is preparing answers. At the same time, the company claimed that the project is in progress – four groups of trains have been put into operation, the fifth one is being received, and the sixth group of trains is being tested.

The Transport Ministry said that the deadline extension was necessary as parts from the trains in the fifth and sixth groups had been used to correct some defects, however suppliers from Russia had been slow in delivering the spare parts. Some parts had still not been received by June 28 when the latest extension was granted.

Diena reported that most of the 19 trains have been certified, however the Baltijas testēšanas centrs company which has carried out the certification is partly owned by the very same companies undertaking the upgrade. Eduard Boze, council chairman and partial owner of the Rīgas vagonbūves rūpnīca (RVR), owns 25.3% of Baltijas testēšanas centrs, while RVR board chairman Gatis Kamarūts owns 12.9%.

The daily reported that the €21.9m tender two years ago was won by DMU Vilcieni, a partnership of three companies with what the daily calls a "specific" reputation. 

Latvia’s Daugavpils Lokomotīvju Remonta Rūpnīca is controlled by Estonian millionaire Oleg Ossinovski. RVR's council chairman is Russian citizen Eduard Boze, and it is indirectly controlled by Aleksandrs Brandavs, a board member of Honor To Serve Riga party, a ruling party in the Riga City Council. The third participant – VRC Zasulauks belongs to RVR (49%) and Pasazieru Vilciens (50.9%).

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