RB Rail and EDzL need to cut administrative costs and salaries - PM Silina

RIGA - Baltic joint venture RB Rail and Eiropas Dzelzcela Linijas (EDzL), the company responsible for the Rail Baltica railway project in Latvia, need to cut administrative costs and salaries, Prime Minister Evika Silina (New Unity) said on Wednesday after a meeting with President Edgars Rinkevics on Wednesday.

"At the moment, I do not see any significant pay cuts. When I see a clear result in that respect, we will of course meet our international obligations," the head of government said, adding that a solution has to be found on how the three Baltic states can save the project's costs at the expense of administrative expenses.

"This project is equally important for all three Baltic States and it is equally important for all three Baltic States to find the funding that they all lack," the prime minister said.

As reported, the supervisory board of the Baltic joint venture RB Rail, which coordinates the Rail Baltica railway project, decided last Thursday to defer a decision on a EUR 9 million funding necessary to cover the company's expenses until February 20, LETA was told at the company.

RB Rail CEO Marko Kivila told LETA earlier that Latvia's co-funding necessary to cover the company's expenditure in 2025 is EUR 9.026 million.

The Transport Ministry in a report on the project's funding needs for 2024 and 2025 indicated that if the funding is not allocated to cover RB Rail's costs, the company's supervisory board plans to decide on Thursday on suspending all Latvian activities for which funding has not been allocated.

However, the Transport Ministry's Parliamentary Secretary Girts Dubkevics (Progressives) assured lawmakers on Wednesday that the project would not be suspended on Thursday, as RB Rail was waiting for Latvia to settle these obligations.

LETA was told at the Transport Ministry that the State Chancellery still has not included the ministry's information report on the national financing needed for RB Rail in 2025 in the government's agenda despite the ministry's reminders of the urgency of the matter.

According to the Transport Ministry, if the government delays its decision of additional funding for RB Rail, the ministry will be unable to comply with the government's decision on the implementation of the first phase of the Rail Baltica project, as it requires an involvement of RB Rail experts. Latvia will not be able to complete the design work, receive support in fundraising and legal matters, and use other support functions provided by RB Rail.

Meanwhile, Prime Minister Evika Silina (New Unity) said after Thursday's government meeting that she would not accept any blackmail from the Rail Baltica team until a solution is found to save the project's enormous costs.

The prime minister made this comment when asked when her Cabinet will assess the Transport Ministry's information report on the need for additional funding for covering the expenses of the Baltic joint venture RB Rail and other activities of the Rail Baltica project.

Silina stressed the importance of the tasks the government has ordered the Transport Ministry to tackle. "It is necessary to achieve economy in the project, it must be done," the prime minister said.

"Nothing will be discussed in the government until there is clarity on how the project's costs will be saved, I will not accept any blackmail from the Rail Baltica team, the economy must be found. It is absolutely clear that these costs, which were previously announced, must be cut by at least 20 percent," the Prime Minister said.

If such a cost saving solution is not delivered to the government, the government will not be able to review the Transport Ministry's report, Silina said.

As reported, on December 10, 2024, the government agreed in principle that a technical and economic analysis for connecting Riga to the Rail Baltica main line will be carried out by November next year.

The Ministry of Transport (MoT), together with the Ministry of Finance (MoF) and the Ministry of Economy (MoE), should submit to the Cabinet of Ministers by November 1, 2025 a technical and economic analysis and an assessment of the possibilities of attracting private investment to connect Riga with the Rail Baltica main line by building a European gauge (1435 millimeters) railway infrastructure to one of two international stations - either from Upeslejas to Riga Central Station or from Misa to Riga Airport.

Transport Minister Kaspars Briskens (Progressives) said at a press conference that the technical/economic analysis would not have a significant cost and could be carried out by the project implementers.

At the same time, the Minister stressed that Latvia could not afford two separate railway holdings - Eiropas Dzelzcela Linijas (EDzL), responsible for the construction of Rail Baltica in Latvia, and national rail company Latvijas Dzelzcels (LDz). He said that in the near future the MoJ would push forward the first part of the sector reform, including the integration of EDzL into LDz, as well as the structuring of LDz.

Briskens said that Latvia should move towards consolidated administration, which could also help the implementation of the Rail Baltica project.

The Baltic joint venture RB Rail estimates that the Riga Upeslejas-Riga Central Station section would require EUR 629 million, while the Misa-Riga Airport section would need EUR 924 million.

However, the priority tasks for the first phase of Rail Baltica will be to establish the cross-border connection from Lithuania to the Estonian border in a sequential manner and subject to the availability of funding, as well as to complete the construction works at the Rail Baltica passenger station at Riga Airport and the southern part of Riga Central Railway Station within the minimum scope to ensure their functionality within the existing railway infrastructure, and to provide a transfer possibility between Rail Baltica and the existing 1520 mm railway network in Salaspils (Daugavkrasti).