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Tuesday, 23.04.2024, 21:59
Latvijas Dzelzcels rail company might take Treasury loan for electrification project
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The minister said that the Treasury loan would be capitalized but that consultations with EU institutions were still needed to make sure that the solution is permissible and that it would not affect Latvia’s budget results. Clarity about the project’s financing might be received in the next few months.
Augulis underlined at the same time that the project is useful and will enable freight shipping companies to save EUR 15 million a year. It will also promote electricity consumption in Latvia, which in turn will have a positive effect on the electricity price’s mandatory purchase component. Furthermore, the railway electrification project might be implemented in synergy with Rail Baltica European-gauge railroad project.
Prime Minister Maris Kucinskis also stressed the project’s usefulness and confirmed that it is implementable. The only question is – can Latvia afford it, which is why solutions will be sought for its implementation without widening the budget deficit, the premier said.
As reported, the Latvian government supported the railway electrification project at a closed meeting today.
Even though initially it was planned to start the project in the direction of Ventspils, the final decision has been to start in the direction of Riga. Thus, during the first stage of the project between 2020 and 2025, the Daugavpils-Krustpils-Riga (Skirotava) lines on the route to Riga will be electrified, with a total cost of EUR 519 mln.
The estimated total cost of the project is EUR 1.3 bln. EUR 347 mln worth of EU cohesion funding have been made available for this project for the EU's 2014 to 2020 planning period.
So far only 14% or 257 kilometers of railway in Latvia have been electrified which is one of the lowest figures in the EU.
Also, last year both the Finance Ministry and the Transport Ministry reported to the government that there is a risk of losing the EU funding if no national decision is made about implementation of the railway electrification project by the end of 2016.
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