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

The Finance Ministry received the letter at the beginning of this week, as the Finance Ministry's Communication Department head Aleksis Jarockis told LETA. In the letter, the European Commission informs about the possible consequences that Latvia may face if implementation of the agreement continues.

The letter emphasizes that if the implementation of the agreement continues, the authorities of Latvia will not only violate the EU public procurement regulations, it is possible that Latvia will also have to provide the LVL 100 million itself.

The European Commission urges Latvian authorities to find an alternative and take the necessary decisions.

The Finance Ministry has turned to Transport Minister Aivis Ronis, repeatedly stating that alternative solutions should be found immediately for Latvia not to lose the EU co-funding, said Jarockis. The Finance Ministry's experts are ready to cooperate with the Transport Ministry to find alternative solutions.

As reported, Prime Minister Valdis Dombrovskis (Unity) said in an interview with LNT television at the beginning of this week that, due to shortcomings in the contract on the construction of new trains for Pasazieru vilciens, signed with CAF, Latvia could lose all the EU funding earmarked for the project, and cover the entire cost of the project itself.

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.

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.

During a meeting with representatives from CAF yesterday, Transport Minister Aivis Ronis said that all options must be used for Latvia to get new trains, as well as develop local manufacturing and create new jobs.

As the Transport Ministry informed the business information Nozare.lv, the two sides agreed that this project is very important for the modernization of Latvia's passenger transportation services by rail, as it foresees new electric and diesel trains for Latvian rail transport company Pasazieru vilciens (Passenger Train). Furthermore, another important point is that some of the manufacturing of these trains will take place in Latvia.

The CAF representatives have arrived in Riga to meet with Latvian officials.