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International Internet Magazine. Baltic States news & analytics Tuesday, 16.07.2019, 13:46

CFLA terminates agreement with Rigas Satiksme on Skanste tram project

BC, Riga, 02.05.2019.Print version
The Central Finance and Contracting Agency (CFLA) has made a decision to terminate the agreement with Rigas Satiksme municipal public transport company on implementation the Skanste tram project co-funded by the EU funds, the agency reported LETA.

The decision today has been sent to Rigas Satiksme.

So far CFLA has paid EUR 451,304 to Rigas Satiksme for the project activities, and the company will have to pay back this sum by August 3, 2019.

CFLA has assessed the information and explanations provided by Rigas Satiksme, the upgraded action plan concerning risks, reports of Ernst&Young Baltic audit company and other available information on operations of Rigas Satiksme. Based on all these findings, CFLA has made a decision to unilaterally terminate the contract.

CFLA Martins Brenics said that the risks are unacceptably high and, in fact, exclude a possibility to implement the project in line with the plan and report its expenses to the European Commission in due time.

“Also, the company is still struggling with organization of its activities and project management, there are suspicions about possible fraud in procurements. I would like to remind that there is zero tolerance to fraud and corruption in projects co-funded by the EU,” said Brencis.

Rigas Satiksme had planned to implement the Skanste tram project by August 31, 2023. In line with the project, in total of 6.6 kilometers of tram line would be upgraded or built anew, and 12 low-deck trams would be purchased. The total costs of the project were estimated at EUR 97.4 million, excluding value added tax (VAT). EUR 65.66 mln would be financed by the EU Cohesion Fund, EUR 27.4 million by Rigas Satiksme and EUR 4.33 million would come from other public funds.

As reported, the Corruption Prevention Bureau (KNAB) has launched criminal procedures in relation to three procurements conducted by Rigas Satiksme.

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