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

The criminal case accuses four former Pasazieru vilciens board members of breaching the law in signing a high-risk deal with the Spanish company Construcciones y Ayxiliar de Ferrocarriles, S.A. (CAF). After the deal fell through, the state sustained a loss of EUR 1,484,945, the prosecutor's office said.

The four stand accused according to Section 318 of the Criminal Law.

The case has been submitted to the Riga Latgale District Court.

As reported, the Prosecutor General's Office opened the criminal case in March 2013, after the Transport Ministry asked the prosecutor's office to probe the failed procurement of new passenger trains for Pasazieru vilciens.

Following the probe, the prosecutor's office concluded that the actions by Pasazieru vilciens board, in concluding the new train procurement and maintenance contract with CAF in April 2012, had violated the Criminal Law.

Four persons were given the status of suspects pursuant to Section 318 of the Criminal Law. This particular section of the Criminal Law deals with misuse of power, the maximum applicable jail sentence is up to eight years.

It was estimated that the 34 new electric trains and seven diesel trains would cost EUR 205 million (LVL 144 million), of which EUR 142 million (LVL 100 million) would come from the European Union's Cohesion Fund, and the rest would be Pasazieru vilciens co-financing. It turned out later that the contract signed by the Pasazieru vilciens board, then headed by Nils Freivalds, differed from the original procurement rules, therefore the EU could refuse funding for the project.