New contract still questionable

RIGA - Latvia’s passenger train company Pasazieru Vilciens has an alternative in case the Spanish company Construcciones y Auxiliares de Ferrocariles (CAF) decides against altering the new train procurement contract, Transport Minister Aivis Ronis said in an interview with television station LNT on June 20, reports Nozare.lv. The alternative proposal will not be as ambitious as the current contract, and it could stipulate buying trains for Pasazieru Vilciens without the provision that part of the train manufacturing process must be implemented in Latvia, explained Ronis.

Nevertheless, Ronis hopes that the talks with CAF will be successful. The Spanish company has asked for two weeks to evaluate contract amendments proposed by Pasazieru Vilciens, said the minister.
Pasazieru Vilciens officially submitted the new version of the train procurement contract, harmonized with the Finance Ministry and the Transport Ministry, to CAF on June 11.
The Finance Ministry said that the risk of violations of procurement procedures was significantly reduced in the new version of the contract; nevertheless, several articles of the contract should still be altered. This, however, does not prevent Pasazieru Vilciens’ board from holding talks with CAF regarding the amendments to the contract, said the Finance Ministry.

The European Commission previously warned Latvia that if the contract was not altered, Latvia might itself have to cover the co-funding from the European Union’s Cohesion Fund, 100 million lats (142.8 million euros) in total.
The total cost of the new train procurement is estimated at 144 million lats, of which 100 million lats is to be provided from the EU Cohesion Fund. The other part of the contract deals with train maintenance for a thirty-year period. The total amount of the contract is 610.7 million euros.