Euro rails will become cheaper: the controversial Rail Baltica is becoming somewhat private 0 6

How the construction of the high-speed European gauge road is proceeding under new conditions was discussed last week in the Saeima Commission on Requests.

"Various solutions continue to be sought"

A number of opposition deputies, including former Prime Minister Maris Kucinskis and former Speaker of the Saeima Edwards Smiltens, addressed Prime Minister Evika Silina (New Unity) with a request titled – "On the introduction and financing of the Rail Baltica project."

For its part, the Ministry of Finance, represented by its head Atis Shvinks, prepared a justification document in advance. Considering the Cabinet's decision that the implementation of the project must be ensured in accordance with available financing, without taking on obligations without budget coverage, the Ministry of Transport, "in accordance with safe financial management, continues to seek various solutions to attract additional financing."

In particular, 114.6 million euros have been attracted from the Recovery Fund (all investments will occur in 2026), as well as funds from the Cohesion Fund amounting to 224.6 million euros (46.8 million euros in 2026).

"The Ministry of Transport, in cooperation with those responsible for the railway project JSC RB Rail and LLC Eiropas Dzelzceļa līnijas (hereinafter – EDzL), as well as participating consultants (designers and builders), needed to review all developed technical solutions to identify cost positions where it is possible to simplify technical solutions, assess changes in the context of reducing investments and/or transferring to other funding sources or later stages of Rail Baltica implementation, while simultaneously achieving the goals set by the TEN-T Regulation."

The TEN-T Regulation (Trans-European Transport Network rules) is an EU legislative act that establishes the principles for creating a unified transport network, including roads, railways, airports, and ports. The goal of the regulation is to ensure the seamless movement of people and goods, integrate the transport systems of EU member states, and promote economic development.

The road will be divided into 5 sections

In 2026, as indicated in A. Shvinks' report dated 01-08/3589, Rail Baltica will continue construction on 5 sections. The cost of the work ranges from 22.3 to 113.3 million euros, with a total of 247.2 million euros. At the Cabinet meeting on November 19 of this year, the government, having considered the proposals submitted for the second reading in the Saeima of the state budget for 2026, supported the allocation of additional resources for the Rail Baltica project – a total of 8 million euros for redesigning construction permits/developing optimization solutions for the southern section of the main route from the Lithuanian border to Misa, in order to stay within the available construction budget.

"Investments in redesign allow for the optimization of construction costs amounting to 200 million euros and reduce future budget burdens," promises the Ministry of Transport. At the same time, the ministry has been tasked with preparing an information message on reducing administrative costs for Rail Baltica and EDzL by January 30, 2026.

Negotiations with investors and foreign expertise

Furthermore, to ensure the diversification of financing and accelerate the implementation of the cross-border connection with Estonia, the implementation of the main section of the route "Skulte – Estonian border" is being considered using the PPP model – public-private partnership.

Why? "To maximize the advantages of private sector participation," claims the Ministry of Transport. RB Rail "has already begun preliminary negotiations with potential private investors to realize potential market interest."

Meanwhile, for the activities of EDzL in the coming year, 2.5 million euros will be spent from the Ministry of Transport's budget – this is only for salaries and administrative expenses.

The government has also instructed the state-owned JSC Latvijas Dzelzceļš to "organize a comprehensive and in-depth assessment of the implementation of the Rail Baltica project in Latvia, including an analysis of the managerial, financial, economic, technological, and legal aspects of the project, as well as recommendations for further implementation of the project."

Apparently, the railway giant did not have the necessary specialists, and LDz signed a contract with the international consultant Alvarez & Marsal Infrastructure & Capital Projects to conduct an in-depth assessment. The contract is valid from November 3, 2025, to May 31, 2026. The cost of the expertise is not specified in the public documents.

Show me the money!

However, A. Shvinks' ministry is ready to fight for every euro from Brussels:

"The Ministry of Transport is actively involved in providing feedback on the European Commission (EC) regulation that will determine the conditions for attracting financing after 2027, urging the EC to maintain as high a co-financing rate as possible. At the same time, the Ministry of Transport is aware of the risk that, according to informal signals, the EC plans to reduce the co-financing rate for member states. Especially for those with co-financing rates still above the EU average. For example, already under similar conditions, EC funding for regions of developed countries is only 40% compared to 85% for Latvia. This mentioned risk is mandatory at the national level..."

Apparently, Latvian officials in the EC corridors decided to emphasize the defense component of the project: "The diversification of transport infrastructure objects (including dual-use) contributes to the resilience and preparedness of not only civilian but also military transportation and logistics capabilities. At the state level, one of the strategic goals should be to assess and direct the transition to a gauge of 1435 mm across Latvia, thereby maximizing compatibility with allies, further ensuring the rapid and effective movement of personnel and material resources across Latvia."

One way or another, the detailed message prepared for the State Chancellery regarding the implementation of Rail Baltica is classified as "for official use only."