The delay in the design work of the railway project “Rail Baltica” is mainly due to the inability of the Spanish design company “Idom” to fully fulfill its obligations, according to the informational report of the Ministry of Transport (SM) on the progress of the implementation of the “Rail Baltica” project in Latvia in the first half of this year, published on the Legal Act Portal (TAP). .
The Memorandum of Understanding indicates that currently there are significant delays in the design works, including the expected delay of the design works on the main route through Riga (section Upeslejas-Misa) is 32 months, on the section Vangaži-Salaspils-Misa the expected delay of the design works is 34 months, and on the sections Vangaži-Estonian border and the Misa-Lithuania border expected delay is 17 months.
The ministry states that the Spanish company “Idom”, which works with its partners on three sections of the main Latvian route, including the section through Riga, which is particularly difficult, is not able to fully fulfill its obligations. Taking into account that the company in question also works on separate sections of the basic track in Lithuania and Estonia, it must provide significant design capacity in the “Rail Baltica” project.
The report states that the assessment of the situation carried out by the joint venture JSC “RB Rail” shows that “Idom” has submitted low-cost bids in the procurement of basic track construction projects, which do not correspond to the complexity of the “Rail Baltica” project and the legal and institutional framework of the construction process in the Baltic States. . This means that “Idom” has not provided sufficient financial resources for effective and timely fulfillment of contractual obligations, which has created a crisis in the design process, but it is being actively addressed.
At the same time, the ministry notes that when evaluating delays, it should also be taken into account that they are affected by the late issuance of technical regulations by third parties, including local governments, the inclusion of non-project-related requirements in the technical regulations, and the resistance of landowners to geodetic works.
The Memorandum of Understanding indicates that delays have also been identified in the design of point objects, which are related to the late announcement of procurement tenders and the non-inclusion of bids submitted by applicants in the available budget. For example, delays in the design works of the Salaspils intermodal logistics center and the design works of regional stations have reached 12 months, the development of the management model of the Riga Central multimodal railway hub is delayed by 11 months, and the development of the management models of the multimodal transport hub of the “Riga” international airport is delayed by 17 months .
According to the Ministry’s explanation, delays in the development of the mentioned management models do not allow to start work on attracting private capital for the construction of those elements that are not financed by the Connecting Europe Facility (CEI).
The report also states that the “Rail Baltica” project is basically financed from the European Commission’s (EC) EFSI financial resource. In 2014-2022, the EC announced tenders for project submissions, in which by participating and signing seven financing agreements, the Baltic States and the Baltic States’ joint venture “RB Rail” received EISI funding in the amount of 1,476,397,152 euros, including the foreign financial aid part of 1,235,599,906 euros amount. For the implementation of Latvia’s activities, the ECSI allocation is 528,391,762 euros, including the foreign financial aid part of 441,416,153 euros.
As a result of the 2021 EISI military mobility envelope project competition, Latvia received EUR 9,845,135 in funding, including a portion of foreign financial assistance in the amount of EUR 4,922,568.
In the 2022 application competition, Latvia applied for EUR 553,222,750 in funding, including EUR 470,239,338 in EISI funding, providing EUR 82,983,412 in budget co-financing. As a result of the competition, Latvia receives indicative funding of 377,626,051 euros, including foreign financial aid in the amount of 298,022,019 euros.
The draft financing agreement is being coordinated with the European Climate, Infrastructure and Environment Agency (CINEA). The signing of the financing agreement is planned for October 2023.
The report also states that in the period from 2014 to the end of 2023, Latvia will have received 915,862,947 euros in funding, including a portion of foreign financial aid in the amount of 744,360,739 euros. The financing is structured in eight signed financing agreements and one yet unsigned financing agreement with CINEA.
Explaining the costs of the project, the MoU report states that the 2017 cost-benefit analysis predicted the cost of the Latvian part of the “Rail Baltica” project at 1.9 billion euros, while in 2021 the costs were estimated at 4.6 billion euros. In 2022, the cost of Latvia’s part is estimated at 7.5 billion euros, but as the Memorandum of Understanding emphasizes, it will be possible to calculate more precise costs of the “Rail Baltica” project only after the construction design stage is completed and the new cost-benefit analysis is completed at the end of 2024.
The report also states that approximately 1,700 real estates need to be expropriated for the construction of the “Rail Baltica” railway infrastructure. Of these, 192 have been expropriated, including 17 in the first half of this year.
The MoU explains that the slow pace of real estate expropriation can be explained by the fact that Latvia is trying to avoid the forced expropriation process. Currently, a law has been passed on the forced expropriation of four immovable properties, and another immovable property could soon be submitted to the Saeima for consideration of the forced expropriation.
According to the ministry, the expropriation of property is also prolonged by delays in the design of the “Rail Baltica” track, as the designer is required to provide sufficiently accurate data on the property to be expropriated before the full development of design solutions in order to expropriate exactly the part of land required for the project.
According to the published information, the expropriation of assets on the “Rail Baltica” section Misa-Lithuanian border is planned to be concluded by mid-2025, on the section Vangaži-Salaspils-Misa – by mid-2026, on the section Vangaži-Estonian border – by mid-2026, but on the section Misa-Upeslejas (via Riga) – until the end of 2027. Property expropriation has been completed in the Riga Central Station, while it is planned to be completed in the section of the “Riga” airport by the end of this year.
The planned infrastructure objects of “Rail Baltica” in Latvia include 18 passenger crew places, including two “Rail Baltica” international stations and 16 regional stations, a cargo terminal, a rolling stock depot and two infrastructure crew points.
The informative report for consideration was published on the TAP portal on Wednesday, September 27. The deadline for its coordination is October 11.
It has already been reported that Transport Minister Kaspars Briškens (P) said in an interview with Latvian Television (LTV) program “Morning Panorama” on Thursday that the cost of designing the railway project “Rail Baltica” currently amounts to about 18 million euros. “At the moment we have an overbill of about 18 million euros for design services,” the minister said, adding that there is actually some downtime in the design process.
It is also reported that the “Rail Baltica” project envisages the creation of a railway line of European standard gauge from Tallinn to the border of Lithuania and Poland, so that it would be possible to connect the Baltic states with other European countries by rail. In the Baltic States, it is planned to build a new, 870-kilometer-long railway line of European gauge (1,435 millimeters) with a maximum train speed of 240 kilometers per hour.
Initially, it was expected that the costs of “Rail Baltica” would reach 5.8 billion euros, but the parties involved have repeatedly stated that they have significantly increased. Part of the costs will be covered by EU funds. The railway line “Rail Baltica” is planned to be opened sequentially in stages between 2028 and 2030.
2023-09-29 11:56:17
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