Baltic States agree on procurement model for Rail Baltica project

RIGA - Representatives of the three Baltic nations at the meeting of the RB Rail council, the joint venture founded by Estonia, Latvia, and Lithuania for managing the Rail Baltica European-gauge railroad project, agreed on Wednesday on the further procurement model and responsibilities in implementation the Rail Baltica project.

The Latvian Transport Ministry relayed that the meeting was a benchmark in co-operation between the Baltics as they progress on the project. The representatives talked over centralised RB Rail procurements and national procurements managed by RB Rail.

Latvian Transport Minister Uldis Augulis (Greens/Farmers) expressed pride in that Latvia's performance in the project so far had been exceptional. "Implementation of Rail Baltica project will be new and valuable experience as so far there have not been similar co-operation projects, therefore the beginning has not been easy. I believe that all three countries are interested in receiving and investing financing in the future, growth, and development. This, undoubtedly, is a challenge, but also a huge opportunity," the minister stated.

The Baltic nations opted to split all procurements into three categories — procurements coordinated by the joint venture only, consolidated procurements implemented by the joint venture, and procurements implemented by national companies under supervision of the joint venture.

During the meeting the parties concurred that RB Rail will be the central manager of public procurements in subjects related to the joint project standards, marketing and business research, among others.

The supervisory council decided to sign an agreement on the Model for Rail Baltica project financing and implementation model project by Sept. 30.

The parties also agreed to begin a tender for professional board members in the Baltics in a month’s time.

Michael Cramer, chairman of the European Parliament's Committee on Transport and Tourism, cautioned in an interview with Lithuania's 15min.lt news website last week that the Baltic countries were in danger of losing EU funding for Rail Baltica if they showed themselves incapable of reaching common ground on the project's implementation.

"The Baltic States must work together. A final decision is necessary, and it is not in place yet. I know they are lacking a political decision, which should be made by the Ministry of Transport of Lithuania," he remarked.

The Baltics have reportedly failed to come to a consensus on the allocation of Rail Baltica money. Lithuania worried that, with all orders conducted by the Latvia-registered company RB Rail, VAT would remain in Latvia. Lithuania has always preferred the VAT for the work done in Lithuania to stay in the country's territory. In July, ministers of Lithuania, Latvia, and Estonia agreed on VAT distribution, however, the nations still disagree about the final financing system.

The countries also have yet to agree on the selection of RB Rail board members.

Rail Baltica project coordinator Catherine Trautmann has also cautioned about the Baltic States potentially losing support if they could not agree on project implementation.

Last year, EC allotted 106 million euros for project implementation in Lithuania, in addition to almost 191 million euros earmarked this year.

As LETA has also reported, the Rail Baltica project manages construction of a new 1,435-millimetre standard-gauge railroad in the Baltics. The European Commission has awarded Latvia 238 million euros for the first round of the project.

By 2020, the three Baltic countries will have received a total of 442.2 million euros (co-funding of 81.83 per cent) for this project.

The goal of the Rail Baltica project is to re-establish a direct link between the Baltics and the European railway network. The project is expected to ease regional integration by means of a railway connection from Helsinki that would link Tallinn, Riga, Kaunas, Berlin, and Warsaw and may possibly be extended to Venice.