RIGA - The first phase of Rail Baltica railway project in Latvia is planned within the current scope, which calls for establishing a Rail Baltica cross-border connection from Lithuania to the Estonian border, as well as to complete construction work at the Riga Airport and the southern section of the Riga Central Train Terminal to ensure the connection between Rail Baltica and the existing railway network, Transport Minister Rihards Kozlovskis (New Unity) told the media on Wednesday following a meeting of the thematic committee on Rail Baltica project implementation.
The minister emphasized that this is a solution for the first phase of the project and that the idea of the "Riga Circle" remains a part of the project. "We would like to look at it differently, but it is 2026 and we have to think rationally," the minister stressed.
He reported that on Wednesday, the committee heard a presentation on the results of the in-depth assessment of the Rail Baltica project, which outlined three scenarios.
"One scenario was to continue as before, which is neither supportable nor feasible. The second scenario is to reassess and scale back the requirements, while the third scenario is to immediately halt any further activities," Kozlovskis explained.
He emphasized that the focus should be on optimizing the project - that is, building and financing only what is technically necessary, rather than "funding various visions and, to a certain extent, dreams."
Prime Minister Andris Kulbergs (United List) noted that Latvia must establish a "minimum program," or base scenario. He said that in their assessment, the consultants concluded that, for example, on the 600-kilometer high-speed rail section between Madrid and Barcelona, there are technically two stations, but only one is primarily used, whereas in Latvia, 17 stations are planned for a 200-kilometer section. He also noted that the planned length of station platforms is 400 meters, but technically this can be reduced to 200 meters.
The Prime Minister stated that the Ministry of Transport must develop proposals by September 15 to reduce the technical and construction material requirements for the within the current scope of the first phase to reduce technical and construction material requirements to the minimum necessary for the creation of a functional and permanently operational railway line. "So we are going down to the bare minimum to understand what we can build and what we cannot," Kulbergs emphasized.
He added that, taking into account the proposals provided in the consultant’s assessment regarding the project’s cost estimates, the Ministry of Finance and the State Treasury, the Ministry of Transport, and the Ministry of Economics must, by September 15, assess the potential scope of state budget funding for the implementation of Rail Baltica in the coming years, as well as other sources of funding and opportunities to attract investment.
He explained that the law currently stipulates that the Rail Baltica project involves military mobility, making it possible to secure military funding - a possibility that had not been explicitly provided for until now. "We need to think outside the box to see what other options exist, because Europe will not provide enough money in the next budget to carry out this project," Kulbergs emphasized.
The third task, meanwhile, calls for the State Chancellery, in cooperation with the Ministry of Transport, to evaluate the project management changes proposed by the consultant. Kulbergs stressed that management has not been effective so far, as the state’s interests are not being defended in negotiations with the contractors.
He stressed that the contract for the construction of the main line, signed in December 2023, has "put us in a bind," as it was concluded without verification by experts or project documentation. According to him, this contract does not set a maximum ceiling, as there are no defined upper limits on what Latvia can afford.
"This is a good contractor who can build it, but the question is whether we can afford it. This contractor charges a very substantial amount every month. If we continue to build as we have so far, no one will know when it will be ready or how to finance it. Likewise, no one will be able to afford to buy a train ticket," Kulbergs emphasized.
As reported, in accordance with a decision by the Cabinet of Ministers, an in-depth assessment of Rail Baltica project was launched on November 3 of last year, conducted by the international consulting firm Alvarez & Marsal.
The value of the contract is confidential.
The purpose of the assessment is to obtain an objective and comprehensive analysis of the implementation of Rail Baltica project, to conduct an in-depth examination of the risks, the financial and contractual status, and to develop recommendations and a practical action plan for the project’s future effective, transparent, and sustainable implementation.
It was also reported that, at the end of July this year, the government established a thematic committee for the implementation of Rail Baltica, comprising ten members of the government. It was established to ensure, under the leadership of the Prime Minister, cross-sectoral consultation and coordination among government members regarding the systematic, technically functional, and financially sound future implementation of the Rail Baltica project.
As reported, according to project implementer RB Rail, the cost of the first phase of the Rail Baltica project in the Baltics could reach EUR 14.3 billion, including EUR 5.5 billion in Latvia.
The total cost of the project could reach EUR 23.8 billion in the Baltics, according to the cost-benefit analysis. A previous cost-benefit analysis in 2017 estimated the total cost of the project at EUR 5.8 billion.
The Rail Baltica project will build a European standard gauge railway line from Tallinn to the Lithuanian-Polish border to connect the Baltic States with other European countries by rail.
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