Builders demand over 2.4 million euros in compensation from the Riga City Council. For what?

The consortium of builders for the Skante revitalization project "RR Nord" has filed a claim against the Riga City Council demanding the payment of over 2.4 million euros for damages and unpaid work during the implementation of the project and as a result of the unilateral termination of the contract by the Riga City Council, reported "RR Nord" representative Janis Dzintars.

According to the builders, the Riga City Council illegally unilaterally terminated the contract in 2022, despite the fact that most of the work on the project had already been completed. The termination of the contract occurred for formal reasons that did not correspond to the terms of the contract and the actual state of affairs, while the municipality had been informed in advance about the deficiencies in the project.

The claim includes unpaid remuneration for the work already completed, damages from the suspension and downtime of the project, as well as the consequences of the unilateral and, according to the builders, illegal termination of the contract.

"For many years, the municipality was aware of the deficiencies in the project and the facts revealed on site. However, instead of solutions, there was inaction, followed by the termination of the contract and failure to meet financial obligations," said Dzintars.

The contract for the revitalization project of Skante was concluded with the company "RR-Eko," which included LLC "Riga Rent" (operating under the name "RR Nord" since 2021), LLC "Eko osta," and LLC "Baltijas būve." However, due to the contractor's inability to provide the necessary guarantees for the completion of the work, the municipality unilaterally terminated the contract and announced a new competition for the work in 2023.

As a result of the open competition, the contract was awarded to LLC "ACBR."

The total cost of the work was initially planned to be nearly 16.7 million euros, part of which was financed by the European Regional Development Fund. Subsequently, the municipality made several decisions to allocate additional funds for the implementation of the project, the cost of which exceeded 21 million euros.

After the opening, it was found that the sewage system in Skante Park was sinking into silt. Not all necessary calculations were made during the design of the sewage system, and the absence of these calculations went unnoticed.