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

The agreement was signed between Pasazieru Vilciens and DMU Vilcieni company on modernization of DR1A diesel trains was signed in January 2014. The sum of the agreement was EUR 21,979,348, including co-financing from the EU. The initial deadline was September 2014. On December 9, 2015, Pasazieru Vilciens had asked for an extension of the project deadline by June 30, 2016, submitting a detailed explanation and a time schedule for further project steps.

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.

In early June, Pasazieru Vilciens informed on the progress in the project. 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 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.

Pasazieru Vilciens has thus 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 has carefully assessed all available information and has made sure that the information provided on the circumstances and project performance comply with the real situationn.

The government has extended the project deadline by September 20, 2016. If the project deadline is not extended, Pasazieru Vilciens might lose the EU funding allocated for the project. Part of the EU funding has already been lost due to extension of the deadline.

Pasazieru Vilciens has paid for the first and second group of trains that have been put into operation, reducing payment for each of the group for the agreed late delivery fine of 10 percent of the agreed amount.

It is planned to claim a late delivery fine up to EUR 2.2 million or 10 percent 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.