Latvia risks losing €4m in EU funds for tram line

Take note – story published 6 years and 2 months ago

The Riga City Council must evaluate the development plans of the Skanste business neighborhood where a €97.4 million tram project is planned, a Saeima committee ruled on March 13.  

As reported, the crash of ABLV Bank has spelled the end of two major infrastructure projects in Riga, namely the New Hanza investment project and the Museum of Contemporary Art, both at the Skanste neighborhood in Riga.

Ministries don't think the project should be halted because of this development, but nevertheless the Environment Ministry has asked to evaluate risks, its parliamentary secretary Jānis Eglīts told Latvian Radio.

Meanwhile Ilze Purmale, an official at the Riga City Department of Development, said that proposed tram line is necessary to develop tram traffic in Riga by connecting the existing lines.

And despite that major projects were halted, the municipality still things Skanste is a prospective business neighborhood, the development of which should be prioritized.

"Of course we have an ambition that Skanste will become our modern center, the central business district," she said.

Even before the ABLV Bank imploded, however, it was clear that there's a likelihood Latvia will lose €4.3 million in EU funds, as a critical tender has seen delays.

"Specifically, in 2018 there's a critically important tender for low-deck trams. A comparatively big advance payment is earmarked for the tender, and this is reflected in the cash flow," Diāna Rancāne, the head of the EU Funds Monitoring department at the Finance Ministry, told LTV March 13.

"We would encourage people not to be too optimistic, seeing as the risks will be sufficient in the future as well, and that unforeseen circumstances may arise," she said.

The new tram line should be finished by late 2022, and a delay of up to one year can be negotiated with the European Commission. 

The Saeima Public Expenditure and Audit Committee will return to the matter in a few months, and in the meantime the Riga City Council will have to review the development plans of the Skanste neighborhood.

The total eligible cost of the project is €97.4 million, of which nearly €65.7 million will come from the Cohesion Fund. €4.3 million has been set aside and will be disbursed after the end of 2018 if the project meets the necessary criteria. Rigas Satiksme will contribute €27.4 million to the project.

A number of NGOs have protested the plans for the Skanste tram line, fearing that the construction will disturb the graves in the nearby historical cemetery Lielie Kapi and that a number of trees will have to be cut down, and also insisting that other neighborhoods in Riga needed a new tram line more than Skanste.

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