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

He said that the project had been rushed because the previous government wished to fall into the deadline for the EU funds. As there had not been earlier experience in running such projects, there was no proper plan on how to do it.

Augulis said that initially 19 companies applied to receive information about the tender, but only one candidate submitted the offer. It means that business representatives did not believe they could meet the deadline.

As reported, the EUR 22 million worth project for modernization of diesel trains will not be completed also by the extended deadline on June 30 therefore the Latvian government today is expected to grant another extension until September 20.

The agreement on upgrading of 19 DR1A diesel trains was signed on January 31, 2014, and the original deadline was late September 2015 but then it was extended until June 30, 2016.

The Transport Ministry said that yet another deadline extension was necessary due to several factors, notably the fact that certain defects had been discovered after putting into operation the first group of the upgraded trains and parts from the trains in the fifth and sixth groups had been used to correct those defects but suppliers from Russia had been slow in making the delivery of spare parts and some parts still had not been received.

The Latvian state-owned rail passenger carrier Pasazieru Vilciens has asked for a repeated extension of the deadline to ensure completion of the project and avoid the risk of losing EUR 10 million EU financing. The company claims that the diesel train upgrading project will be completed by September 20.

The Transport Ministry pointed out that the first three groups of upgraded trains, each group comprising three trains, have been put into operation on May 6, May 30 and June 10 this respectively, and the fourth group is to be handed over to Pasazieru Vilciens before June 30. The fifth group is to be delivered by July 15, and the sixth group consisting of four trains is to be delivered by September 15. The ministry will inspect the project implementation ahead of the Cabinet meeting expected to grant yet another deadline extension.

The total cost of the project is nearly EUR 22 million, of which about EUR 9 million is co-financing from the EU Cohesion Fund. Some of the EU financing was already lost when the previous deadline was missed.

It is planned to claim a late delivery fine up to EUR 2.2 million or 10% of the agreement amount from the contractor, DMU Vilcieni general partnership, for its failure to meet the deadlines for delivery of upgraded diesel trains, Andris Lubans, CEO of Pasazieru Vilciens, earlier told LETA.