In the context of the crisis in oil product prices in the road industry, immediate solutions are necessary, stated Minister of Transport Aitis Švinka on Wednesday at the annual conference of the road industry in Latvia organized by the state-owned company "Latvijas valsts ceļi" (LVC), according to LETA.
He noted that negotiations are currently underway at both the European Union (EU) level and with industry associations, as decisions need to be made without delay.
"The construction season has begun, contracts need to be signed, and construction projects need to be implemented. I have presented specific solutions to the government that address the issue of rising prices for bitumen components, as well as issues related to contracts governing deadlines for execution and conclusion," said Švinka.
The minister emphasized that the solutions were initially planned to be discussed at a government meeting this week, but now the discussion has been postponed to next week.
It was previously reported that the Ministry of Transport prepared an information report on the impact of the conflict in the Middle East on Latvia's transport sector, which outlines possible solutions and support mechanisms.
Information on the legal acts portal indicates that the report has restricted access status.
In developing the report, the experience from previous crises was utilized, especially from 2022 after Russia's invasion of Ukraine, when a methodology for recalculating the cost of construction works was applied under conditions of significant price increases in contracts.
The Ministry of Transport and the industry agree that it is necessary to find a similar or analogous solution now, updating this methodology in accordance with the current geopolitical and market situation to respond flexibly to significant changes in fuel and raw material prices.
In the area of roads, the Ministry of Transport, together with LVC, plans an approach that provides for more flexible application of contracts and a reasonable approach in implementing public procurement. At the same time, options for compensating for rising costs are being considered through recalculating unit prices for construction works, including for works using bitumen, as well as applying construction cost indices from the Central Statistical Bureau to cover changes in prices for other resources and materials.
There is also a possibility of extending deadlines for the execution or conclusion of contracts and, in certain cases, not applying sanctions for delays in starting work if the reasons are related to external circumstances beyond the control of the client or contractor.
It is also reported that in Jūrmala today and on Thursday, April 23, LVC is holding the annual conference of the road industry in Latvia.
The first day of the conference is dedicated to the development of the road network and traffic safety, while the second day focuses on technology and road maintenance issues.
The company LVC was established in late 2004 and is state-owned. It manages the network of state roads, administers its financing, and organizes procurement for state needs. LVC manages over 20,000 kilometers of state roads.
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