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

In the politician's opinion, the entire procurement saga has been a very strange affair, especially since the day a new board was appointed for Pasazieru vilciens, which has not been able to reach agreement with CAF during the past six months. Pasazieru vilciens was fooling everybody, blaming CAF for not being ready for a compromise, says Zarins. "However, after I achieved, during Saeima Economic Policy Committee's meeting last week, that an open meeting be held to discuss the procurement contract and that CAF representatives be permitted to participate in the meeting – it turned out that there were no problems with the Spanish company. CAF confirmed that they were ready for tackling all problems and alter the contract so it would meet the procurement requirements and Latvia could receive Europe's financing", writes LETA.

"During the meeting, Pasazieru vilciens and the Transport Ministry confirmed that such amendments would be prepared and promptly submitted to CAF," says Zarins. Everybody was pleased that a solution had finally been found. "However, when CAF arrived for the meeting with Pasazieru vilciens, the Spanish company was presented with the same old ultimatum, which had led both sides to an impasse a half-year ago".

Zarins notes that CAF and Pasazieru vilciens signed the contract this past spring, and CAF was acting on the basis of the contract. "All was fine, but then the government all of a sudden told the European Commission that it had a feeling that the contract, signed under the supervision of the government and the prime minister, was possibly not in line with the Commission's requirements. And the government inquired if the European Union would give us money in such a case. Of course, the EU replied that they would not," informs Zarins. "Nevertheless, CAF was ready to continue work and look for solutions."

"And now the final act of the saga: the Economic Policy Committee's meeting was held on Wednesday. The amendments which Pasazieru vilciens had promised to submit were only presented to CAF next Monday, when a little more than twenty-four hours remained until the deadline. And Pasazieru vilciens submitted not five amendments as it had said it would, but seventy," says Zarins. "CAF nevertheless continued to work and tried to harmonize everything".

Furthermore, with just two hours left, Pasazieru vilciens set a new requirement for CAF – to sign a separate train maintenance agreement with Latvijas Dzelzcels. It was a very unexpected twist, but CAF nevertheless promptly started talks with Latvijas Dzelzcels, which agreed to the proposal but said nailing the deal down would take some 15 days.

When CAF told Pasazieru vilciens about it, it was ten minutes to midnight. "What did Pasazieru vilciens do? Presented the Spanish company with a neat letter drawn up in advance: "Sorry, guys! Your time is up, you have not managed to meet the deadline." And the media were invited to a press conference already the next morning," says Zarins.

Zarins adds that Pasazieru vilciens possibly did not even have the right to unilaterally terminate the contract because it said that, should the parties be unable to reach agreement, their dispute would be settled by the Mediation Institute of the Stockholm Chamber of Commerce. Therefore, it is possible that a new procurement will be announced while the previous contract is still valid. As a result, Latvia may not only fail to receive the EU funding but also find itself involved in a lawsuit.