EU – Baltic States, Latvia, Legislation, Railways, Transport

Photo by J. Mendzins.

Alstom so far has not participated in the tenders announced by Latvian passenger transportation company Pasazieru vilciens as the company is focusing on production of rolling stock for the European standard or 1,435-milimeter gauge railway, while Latvia still uses a wider rail standard as in Russia and former USSR territories – 1,520 milimiters. Besides, Alstom's business practice does not include rental purchase model that was wanted by Pasazieru vilciens.

The Rail Baltica II project seeks to re-establish a direct connection between the Baltic states and the European railway network. The project is expected to facilitate regional integration by means of a railway link from Helsinki that would link Tallinn, Riga, Kaunas, Warsaw and Berlin and might potentially be extended to Venice. It is planned that 85 percent of the projects costs will be be financed from the EU funds. According to estimates drawn by Aecom LTD consultancy, Latvia's costs for the project will be 1.27 billion euros, while the project will cost a total of 3.68 billion euros in the three Baltic States.

Following difficult negotiations, the three Baltic countries' ministers in September 2013 signed a declaration on the establishment of a joint venture for the Rail Baltica II, but the parties were not able to reach an agreement on inclusion of Lithuanian capital Vilnius in the project. The joint venture was established in October 2014.

"Our new high-speed trains Pendoline would meet the needs of Rail Baltica project," said Chardon.

On December 14 Alstom launched high-speed train traffic in Poland, linking Warsaw to five largest Polish cities – Gdansk, Krakow, Katowice, Wroclaw and Poznan.

Marcin Celejevsi, the head of Polish PKP Intercity railway company, told BNS that the company has invested 665 million euros in the project. Alstom has supplied 20 high-speed trains Pendolino and built a new depot for the trains. The agreement includes maintenance of trains for 17 years.

Latvia's Pasazieru vilciens and Spanish company Construcciones Y Auxiliar de Ferrocarriles S.A. (CAF), which had been declared the winner of a train supply tender, signed a contract in April 2012. But later it turned out that the contract was inconsistent with the original tender requirements and that Latvia could therefore lose 100 million lats (EUR 142 mln) of co-financing from the EU Cohesion Fund for the train project. Pasazieru vilciens tried to negotiate with CAF about amending the contract but the parties failed to agree on the amendments by the deadline on October 2, 2012, and the contract did not take effect.

Pasazieru vilciens then decided to lease electric trains for 15 years and renovate the diesel trains, announcing new tenders. Swiss company Stadler Bussnang was declared the winner of the tender. The agreement was not signed. The Transport Ministry announced that the Pasazieru vilciens board had failed to prove that the company can afford the new train lease contract. The company's board later announced its decision to step down, and a new board was appointed on July 8. The new board has been commissioned to find a solution to procurement of trains and Pasazieru vilciens financial problems – by 2024 Pasazieru vilciens budget had been planned with a deficit of 14 million euros annually.