Railroad electrification project failed also because of actions of Transport Ministry and Latvijas Dzelzcels - Audit Office

  • 2020-06-17
  • LETA/TBT Staff

RIGA - The railroad electrification project failed not only because of the geopolitical situation, but also because of the actions of the Transport Ministry and railroad company Latvijas Dzelzcels, the State Audit Office has concluded.

The major railroad infrastructure modernization projects, which were supposed to attract investment of at least EUR 534 million, including EUR 454 million from the Cohesion Fund, will not be implemented on time and in the projected amount, the Audit Office told LETA.

Following the Audit Office's audit, completed in mid-March, the Audit Office has concluded that the failure of the infrastructure modernization project was caused by shortcomings in planning the development of the railroad industry and a lack of initiative by the parties involved.

"The Transport Ministry has not acted as a responsible policy planner in order to strengthen competitiveness of the infrastructure in time and help the industry prepare for changes," the Audit Office said.

The Audit Office explains that freight transportation by rail continued to decrease in 2019, with the amount of freight transportation by rail decreasing 15.8 percent from 2018 to just 41.5 million tons, the lowest amount of freight transported by rail since 2002.

The largest project, in terms of financing, was the Latvian Railroad Network Electrification project, which was five years in development and has already been abandoned by Latvijas Dzelzcels due to the company's financial situation. The project dealt with the first electrification stage on the Daugavpils-Krustpils, Rezekne-Krustpils and Krustpils-Riga railroads.

According to the Audit Office, only one of the four original railroad infrastructure modernization projects is still being planned - modernization of the Sarkandaugava-Mangali-Ziemelblazma section of the Riga railroad network.

"Unfortunately, the planned development of the railroad sector has mostly remained on paper, and if the preparation and implementation of investment projects in the industry does not improve, we may not be able to implement the revised railroad development plans in the remaining period when Structural Funds are available for the projects," said the Audit Office.