Construction, Covid-19, Economics, Financial Services, Good for Business, Latvia, Transport

The Finance Ministry told LETA that EUR 75 mln would be allocated from the budget's contingency funds to the Transport Ministry for implementation of different road construction projects.

The Transport Ministry explains that the move will prevent the economy from cooling down and stimulate economic growth and entrepreneurship. "During an economic downturn, funds are traditionally invested more in such public infrastructure development projects as construction of roads and bridges, which promote development of construction and other related industries, create jobs and tax revenues to the state budget," explained the ministry.

According to the Transport Ministry, investments in national infrastructure development projects will form the basis for the overall recovery of the Latvian economy after the state of emergency is over. "They will serve as a successful economic stimulus solution, as the construction sector adds value to the related design, building materials and services sectors, which are also currently affected. There is an opportunity for the construction sector to attract labor from sectors impacted by the crisis," said the ministry.

Said EUR 75 mln will be spent on renovation and reconstruction of bridges and highway and road sections that are currently in poor condition, renovation and reconstruction of which has been postponed so far due to insufficient funding.

In total, EUR 255.27 mln has been allocated to the State Highway Fund from the 2020 budget, but after the allocation of additional funds, the total funding will amount to EUR 330.27 mln.

The final decision on allocating additional funds for road reconstruction and renovation during the crisis will be made by the Cabinet of Ministers.