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

''Yesterday's meeting mostly focused on presenting the further development of Latvia's rail infrastructure, and no decisions were made,'' the European Commission's Regional Policy Directorate pointed out, adding that it intends to analyze in detail Latvia's proposals before making any announcements.

As reported, representatives from the Finance Ministry and the Transport Ministry visited Brussels on Tuesday to meet with representatives from the European Commission's Regional Policy Directorate to discuss redistributing funds from the failed train procurement for other purposes. As the Transport Ministry previously informed the business information portal Nozare.lv previously, the length of the discussions is not known at the moment, but the ministry believes that these funds must be redistributed as soon as possible.

Jemberga told LETA previously that the European Commission expects Latvia to present practical and well-defined proposals regarding redistribution of European Union funds originally earmarked for the procurement of new trains. According to the European Commission, it is currently unknown how long the talks will take, however, given that there is not much time left and any of the new projects offered by Latvia will have to be implemented by the end of 2015, the Commission expects Latvia to present practical and well-defined proposals.

Jemberga reminded that if Latvia wishes to use the funds for the implementation of other projects, these projects would also have to deal with the development of environment-friendly public transport systems, just like the original train procurement project.

LETA also reported, during a closed Cabinet meeting on October 23, the government decided to give the Transport Ministry and the Finance Ministry mandates to begin discussion with the European Commission on redistributing Cohesion funds from the failed train procurement for other purposes. The Transport Ministry believes that these funds must primarily be distributed to improve rail infrastructure, as well as maintaining roads, that lead to rail infrastructure objects.

At the beginning of October Latvia's passenger train operator Pasazieru vilciens and Spain's train manufacturer Construcciones y Auxiliares de Ferrocariles S.A. (CAF) failed to reach an agreement on the procurement of new trains.

Pasazieru vilciens announced the train procurement in December 2009. In March 2011, the European Commission confirmed that LVL 100 million would be provided from the European Union's Cohesion Fund for the project. Under the failed contract, the total cost of new 34 electric trains and seven diesel trains that Pasazieru vilciens wanted to buy was LVL 144, of which LVL 100 million would have been covered from the bloc's Cohesion funds, whereas Pasazieru vilciens co-financing would be LVL 44 million.