Rail Baltic opponents turn to Baltic auditor generals

  • 2018-01-26
  • LETA/TBT Staff

TALLINN – The opponents of the Rail Baltic high-speed railway turned to the auditor generals of Estonia, Latvia and Lithuania because in their opinion building the railway is not socioeconomically rational and does not correspond with the European Union's cofinancing requirements.

There are several mistakes in the Rail Baltic cost-benefit analysis which amount to at least 4.1 billion euros, the opponents of Rail Baltic said in their letter.

The letter has been signed by a member of the board of MTU Avalikult Rail Balticust, Priit Humal, chairman of the board of "Latvijas zeme, daba, tauta", Dzintars Livcans, and chairman of the Lithuanian Landowners Union's Pasvalys Branch, Vidas Damanauskas.

According to the signatories, the socioeconomic benefit of Rail Baltic has been artificially increased by manipulating emission standards and the fuel consumption of trucks. "The EY report does not cover the external costs of the environmental impacts arising during the period of railway construction, and ongoing environmental burden of the railway during its operation which is a requirement of the CBA guide," it is said in the letter.

The authors advise the Baltic auditor generals to investigate who are the independent auditors who assessed the cost-benefit analysis. They also want to know if it is among the obligations of auditor generals to conduct financial auditing of RB Rail AS, why the calculations behind the cost-benefit analysis have not been made publicly available, and how has the risk been mitigated that the EU might decide not to finance the project due to mistakes in the analysis.

Most of the road transport takes place without using any freight terminals. It is apparent from the response of RB Rail and EY that the replacement of such road transport with RB would not be feasible due to the costs of the last-mile delivery, the authors say.

EY has assumed that RB will compete with a small part of road transport where terminal handling is included but has not taken into account the additional transportation costs from the railway freight terminal to the main trucking terminal.

The CBA Guide requires that "a complete set of data and sources of evidence (used in the CBA) should be made easily available", however, none of the calculations and only a few of the sources referred to in the study have been made available despite frequent requests.

After the correction of these mistakes, RB will not be socioeconomically feasible. Instead, it will be detrimental for the Baltic states and the currently planned cofinancing by the EU will conflict with the EU rules, the authors conclude.

Rail Baltic leaders have affirmed that Ernst & Young based its analysis on the EU methodology. The analysis said that the project is efficient from the societal point of view and the accompanying socioeconomic benefits exceed the project's expenses.