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Lithuanian railway company and Lithuanian Transport Ministry at odds over Rail Baltica project

BC, Vilnius, 30.09.2016.Print version
After the three Baltic states reached agreement after lengthy and complex negotiations to hold contractor tenders of the European-gauge project Rail Baltica in every individual country rather than via a joint enterprise only, Lithuania's Transport and Communications Ministry holds a different stance on the matter from that of the state-run Lietuvos Gelezinkeliai (Lithuanian Railways, LG), reports LETA/BNS.

Lietuvos Gelezinkeliai would like to hand over all project functions to the joint Baltic enterprise RB Rail, which the company has an indirect stake in, however, the company wants a right to participate in Rail Baltica construction projects – a right it does not have a the moment. Nevertheless, the ministry sees the statement as merely an opinion of the railway firm's executives, saying it will not be taken into consideration.

The dispute between the ministry and the railway company emerged on the eve of the signing of the project management contract scheduled for Friday, RB Rail told. The transport minister's spokesman told that the minister would sign the document next week.

Albertas Simenas, deputy general manager at Lietuvos Gelezinkeliai, says the project should be fully centralized, with the functions transferred to RB Rail.

"In the opinion of Lietuvos Gelezinkeliai, all of the management functions and accountability should be handed over to RB Rail in order for the project to be successfully implemented. The alternative suggestion of successful implementation of the project in every individual Baltic state did not work out – Lithuania has made substantial progress in the project work, while Latvia and Estonia have hardly started," reads the letter.

Simenas told he wanted Lietuvos Gelezinkeliai be allowed to take part in Rail Baltica contracting tenders, as the company cannot apply now as the indirect owner of a third of the company's shares via RB Statyba (RB Construction) subsidiary.

"Our accent is that the new system would allow Lietuvos Gelezinkeliai to take part in the tenders and use its potential. Under the current conditions, we have no right to take part in the tenders," said Simenas.

In his words, the railway company could participate in the tenders, if its subsidiary RB Statyba were handed over to the Transport and Communications Ministry. Companies that hold stakes in RB Rail, directly or indirectly, are not eligible for tenders.

In the joint company, Latvia is represented by Eiropas Dzelzcela Linijas, a company subordinate to the country's transport ministry, while Estonia is represented by Rail Baltic Estonia, also subordinate to the national ministry. RB Statyba is the only firm not subordinate to the ministry.

Ricardas Slapsys, spokesman for the transport and communications minister, refused to elaborate on the LG statement, adding it was the company's opinion only.

"The Rail Baltica project is managed by the state, not by Lietuvos Gelezinkeliai. The negotiations have taken place and have been confirmed. We do not comment on Lietuvos Gelezinkeliai's opinion," Slapsys told.

After the 12-month negotiations, representatives of the three Baltic states agreed in Brussels in early September on the scheme of calling Rail Baltica tenders, which was subject to major disputes. Under the agreement, acquisitions will be divided in three categories: tenders organized exclusively by the joint enterprise, consolidated acquisitions announced by the joint enterprise and acquisitions organized separately by the Baltic states but closely supervised by the joint enterprise.


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