PM Silina wants clear division of responsibilities for Rail Baltica costs

RIGA - The government is not an institution that pays bills, Prime Minister Evika Silina (New Unity) told journalists Wednesday, commenting on a roughly EUR 30 million funding shortfall for the Rail Baltica railway infrastructure project.

Silina, who met with President Edgars Rinkevics at Riga Castle on Wednesday, said that she was  eagerly awaiting the results of the State Audit Office's examination of the Rail Baltica situation. Silina said that she wants to draw a clear line, indicating that she does not want to do things the way they have been done so far.

"There must be a clear responsibility for certain issues having been left to their own devices. We will review the Rail Baltic scope report. This will be the first report to the government that will give an overview of the whole project - how we could deliver it, what the approximate financing is. The Cabinet has not considered such a detailed report yet," the prime minister said.

In Silina's view, it is necessary to figure out how to resolve the train station issue, how much it would cost, as currently there are no answers to these questions. The next question is about the project's financing models. Silina said that perhaps it is necessary to work on various solutions until the fall or end of the year, because EU and government funding may not be sufficient to complete the project.

Silina pointed out that she and Transport Minister Kaspars Briskens (Progressives) had reached a common understanding that the management model proposed so far in the report was not sufficient, it had to be improved and a new model should be proposed to the government.

Asked whether the necessary EUR 30 million would be provided for Rail Baltica, Silina stressed that she was not ready to pay the project's bills and the government was not an institution that paid the bills.

"Unless I am reassured that everything is legal, I will turn to the law enforcement authorities. It is not quite clear to me how such a funding shortfall could occur," the prime minister said.

When asked whether there was confidence that the project would be continued and completed, President Edgars Rinkevics said that we as a society will be able to gain this confidence after several steps, first of all, after the reports of the audit institutions of all three Baltic states, including Latvia. The president assumed that the report of the State Audit Office would contain an analysis and proposals on what to do next with the project. Rinkevics noted that he plans to meet Auditor General Edgars Korcagins next week to study the report in more detail.

"As the prime minister said, the government will discuss this next week. I think that the prime minister is right - we need to see the whole picture, understand what needs to be clarified and in what way, transform the management model, understand what needs to be done, and let us not forget that this is not yet a decision discussed by the whole government," the president told journalists.

As reported, five years ago Latvia's total costs of the Rail Baltica railway project were estimated at around EUR 1.9 billion, but now the costs of the project's first phase have at least tripled, Transport Minister Kaspars Briskens said following the weekly coalition meeting on June 3.

Detailed information on the project's costs will be made public once the full cost analysis is completed. Compared to the five-years-old cost estimate, which for Latvia was around EUR 1.9 billion , this amount is now at least three times higher, the minister said. Briskens promised that the Ministry of Transport will declassify many of the previously prepared documents so that the public has the opportunity to get acquainted with them.

Briskens said that on June 11 the government could examine an information report, which, among other things, outlines the implementation scenario of the first phase of the project, which is also important for the partners in the European Union, in order to outline the path that Latvia is choosing.

"We are very well aware of the challenges related to the availability or partial unavailability of funding", the transport minister said, adding that the report notes some alternative sources of funding. The Ministry of Finance will also be more actively involved.

The transport minister is positive that "together" a way will be found to secure funding for the first phase of the project. Briskens' only concern is that the project's management so far has been "very weak", which has manifested itself on various levels - both in the implementing bodies and on the political level.

According to the minister, the current deadlines are "very, very ambitious", and only by moving forward decisively, finding financial solutions, can the infrastructure be built on time, without further delays.

It was also reported that construction of the mainline of the Rail Baltica railroad project is scheduled to start this summer, during the current construction season, representatives of the company responsible for the implementation the Rail Baltica project in Latvia, Eiropas Dzelzcela Linijas (EDzL), told LETA earlier.

EDzL representatives told LETA that deforestation works are currently underway in the vicinity of Iecava, while construction works are likely to start more towards the second half of the summer.

As reported, the Rail Baltica project, which has recently highlighted problems with meeting deadlines and absorbing funding, involves the construction of a European standard gauge railway line from Tallinn to the Lithuanian-Polish border to connect the Baltic states with other European countries by rail.

Rail Baltica was originally expected to cost EUR 5.8 billion, but stakeholders have repeatedly said that the cost has increased significantly. Part of the cost will be covered by European Union funds. Rail Baltica is planned to open in phases between 2028 and 2030.

The State Security Service stressed in last year's activity report that, despite the current difficulties, further delays in the construction of the Rail Baltica infrastructure are unacceptable and the project requires targeted risk management.