Due to questionable decisions made in the "Rail Baltica" project, Latvia will most likely have to return already allocated funds — a total of about 50 million euros received from the European Connecting Europe Facility (CEF) and the Military Mobility Fund, reports LTV.
However, there is already a lack of funds for construction on the first section of the route near Iecava, despite completed projects and initiated works. Yet, not a single meter of the railway embankment has been built so far. Work does not begin until the project is redesigned and cheaper technical solutions are found. Eight million euros have been allocated for redesign this year.
Kristīne Pūdiste, Deputy State Secretary of the Ministry of Transport, explained how they are saving money: if previously there was a shortfall of 180–190 million euros, now it is about 45 million euros for the entire section.
This would mean that the cost of constructing the southern section would be not 686 million euros, but around 465 million. The funding for construction is provided through the European CEF instrument.
It has become clear that it is impossible to carry out the promised works within the allocated funding. Although the problem was identified at the end of last year, there is still no exact assessment of the missing amount or a final decision. The company "Eiropas Dzelzceļa līnijas" mentions a shortfall of about 100 million euros, builders cite an amount almost half as much, while the Ministry of Transport acknowledges that estimates range from 30 to significantly more than 100 million euros.
According to the Ministry of Transport and the company RB Rail, the European Commission is unlikely to agree to a scenario where fewer kilometers of railway are built than promised for the allocated funds. Therefore, the only way to preserve the already allocated funding is through additional financing from Latvia.
At the same time, the issue of returning nearly 50 million euros to European structures is being addressed. Of these, 25.7 million euros were allocated in 2023 from the Military Mobility Fund for the construction of bridge supports over the Daugava near Salaspils.
These funds will have to be returned, as the proposed engineering solution for financing turned out to be too expensive. Cheaper options for bridge construction are currently being sought, but it is impossible to use the already allocated money for the modified project.
Moreover, the inclusion of the 10 infrastructure service points in Skulte in the CEF application turned out to be premature. Some funds are still being redistributed to other "Rail Baltica" projects, but it is likely that 23.7 million euros will also have to be returned to the European agency CINEA.
A new working group is created for each new challenge
The new Prime Minister Andris Kulbergs stated that he is not afraid to make difficult decisions. "It is necessary to create a serious working group led by the Prime Minister. The Prime Minister must personally participate in the process and show that this issue is a priority. A report on the progress made should be prepared every month," said Kulbergs.
The new Minister of Transport, Rihards Kozlovskis ("New Unity"), stated that it is necessary to realistically assess one's capabilities:
"We should not do what we cannot afford. We must understand our priorities."
When asked if this means the possibility of abandoning the project, Kozlovskis replied that such a step would be irresponsible.
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