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Rail Baltica procurement agreement signed

11 Oct 2016

EUROPE: Nine government and railway organisations from Latvia, Estonia and Lithuania have signed an agreement setting out the procurement model for Rail Baltica II, the planned 1 435 mm gauge line which would run 728 km to Riga and Tallinn from the current standard gauge railhead at Kaunas.

Baiba Rubesa, CEO of the tri-national project promotion joint venture RB Rail, said the agreement was important because there is no European precedent for a three-way rail infrastructure project. Eight of the partners signed the agreement in Riga on October 5, with the participation of Lithuanian national railway Lietuvos Geležinkeliai delayed until October 7.

Under the agreement, procurements are to be divided into three categories. The first covers surveys, business development and marketing for the whole project, which RB Rail will manage to ensure common standards are followed.

The second category covers the consolidated procurement of interoperable systems, with RB Rail having a supporting role but the contracts being let locally in each country.

The third category covers domestic construction, planning and supply contracts, which are to be let locally with RB Rail only involved when a single contract exceeds a specified value.

The agreement confirms that contracts are to be awarded and tax paid locally in each country. This had been a sticking point in the negotiations, with the Lithuanian side having rejected a previous proposal to channel all procurement through the Riga-based RB Rail joint venture as this would have meant that Latvia would gain the tax revenue.

LG CEO Stasys Dailydka has expressed concern about the Lithuanian project promoter RB Statyba being a state railway subsidiary, rather than one owned by a government ministry as in the case of its Latvian and Estonian counterparts, which restricts LG’s ability to bid for work on the project. He also told local media that he was concerned about RB Rail lacking accountability for any problems which may occur.

  • On October 7 LG awarded a consortium of UAB Hidrostatyba and Leonhard Weiss RTE an 18-month contract worth €15·6m contract to build a standard gauge link between Kaunas intermodal terminal and Rail Baltica I, the standard gauge route between Poland and Kaunas inaugurated in 2015. This will require 5 km of 1 435 mm gauge track and the modernisation of 3 km of 1520 mm line, and on completion will enable Rail Baltica I to be used by freight trains in addition to the current weekend-only passenger services from Białystok.