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International Internet Magazine. Baltic States news & analytics Wednesday, 16.07.2025, 11:09

Latvia could end up paying the entire cost of new trains due to faulty contract signed with CAF

Alla Petrova, BC, Riga, 16.05.2012.Print version
Due to shortcomings in the contract on the construction of new trains for the joint-stock company Pasazieru vilciens(Passenger Train), signed with the Spanish company Construcciones y Auxiliar de Ferrocarriles, S.A. (CAF), Latvia could lose all the European Union funding earmarked for the project, and cover the entire cost of the project itself, Prime Minister Valdis Dombrovskis (Unity) said in an interview with the LNT television today.

If errors are found in the contract, Latvia may lose up to 100% of the relevant EU funds, said Dombrovskis.

 

This is the reason why the Finance Ministry is highly concerned about the deal and has asked the Transport Ministry to establish all circumstances thereof.

 

Sanita Jemberga, head of the Press and Information Department at the European Commission Representation in Latvia, told LETA that the Commission would not comment the contract for the time being.

 

As reported, the Finance Ministry has concluded after evaluation of the draft contract on procurement of new trains that, in organizing the procurement, Pasazieru vilciens ot only failed to observe official objections from several ministries and other authorities, but also ignored the government's recommendations.

 

The management of Pasazieru vilciens insists that all the official provisions have been fully observed.

 

Pasazieru vilciens CEO Nils Freivalds previously declined to name the amount that the company would have to pay if the contract was terminated, but he stressed that termination of the contract would mean losing EU funds and damage to the country's prestige, plus LVL 170 million tax money that would not be paid into the state budget.

 

In the meantime, Transport Minister Aivis Ronis has ordered representatives from the ministry and Pasazieru vilciensto meet with the European Commission's representatives in order to discuss the Finance Ministry's concerns.






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