Latvia will lose its competition in electrification by rail / Article / LSM.LV



A railway electrification project threatens to lose competition in the fight against neighboring countries, and to jeopardize the transit sector, which is dependent on a fifth of the Latvian economy, says the Ministry of Transport (MoU) in a statement to these media.

According to the ministry, the implementation of the railway electrification project in Latvia is fundamentally necessary. The rail electrification project is also the most ambitious infrastructure development project in this EU fund programming period. The intention is to reconstruct and modernize the railway infrastructure more than 300 kilometers in order to reduce CO2 emissions by rail by 20%.

"Government representatives in the media have so far pointed out the openness of the Latvian transit sector to the entrepreneurs of other countries and called for their business in Latvia to be established as an EU Member State, as one of the main arguments that Latvia has started with the implementation of the rail electrification project on the east-west transit corridor ", says the ministry.

The SM notes that this year only 257 kilometers of railways in Latvia have been electrified, accounting for 14% of the total national rail network. This is considerably lower than the EU average of 60%. At present, electric trains can only be used in commuter traffic, while freight traffic, which accounts for about 60% of total rail traffic in Latvia, is limited to diesel trains.

The SM notes that it does not agree with the publicly expressed opinion that the inhabitants of Latvia have a financially disadvantageous project.

"The calculations show that rail electrification will improve the competitiveness of the transit sector, thereby maintaining the international competitiveness of the Latvian transit corridor and maintaining revenues in total government budget revenues," said Ernst & Young Baltic, an audit firm, and tested by audit firm KPMG. The justification includes not only the sector but also wider socio-economic benefits, including the project, which is essential for the development of the Latgale region, creates new jobs, generates additional income for the local population and contributes to reducing unemployment. in the region. This is shown by the experience with previous infrastructure development projects, for example during the construction of the Krustpils-Skriveri railway, the local economic activity in the trade, tourism and service sectors also increased considerably, "emphasizes SM.

The ministry also points out that the resources of the state budget are not invested in the electrification project. The total costs of the first phase are estimated at 441 million euros.

Of this, EUR 347 million is planned from the EU Cohesion Fund. The remaining amount is expected to be attracted by the JSC Latvijas dzelzceļš (LDz) in the form of a loan from the European Investment Bank.

The tendering procedure for the first phase of electrification (Daugavpils-Krustpils line, Rezekne-Krustpils, Krustpils-Riga electrification) was announced in order to start the implementation of the project on time. It provides that applicants must submit qualification documents by 20 September, or that they are formally willing and willing to participate in the further procurement procedure. Candidates who are eligible for the following procedure are invited to submit technical and financial proposals – they will receive a minimum of three months. Most likely, the purchase ends in the spring of 2019, the estimates of the ministry.

CONTEXT:

The decision to first electrify the line from the eastern border to Riga, the electrification of the lines from the eastern border to Riga, was carried out for the first time last year by the government at the beginning of the battle for the electrification of the railways, as a result of which the electrification of Ventspils direction was postponed.

The total costs of the project amount to more than one billion euros. The only trials, or 347 million of the total of more than € 440 million needed for the first stage of electrification, constitute EU funding. There is no clarity about where you can take money for the second and third phases. This is one of the reasons why a part of the transit industry is looking at this project with a creepy skepticism. This is aggravated by the avoidance of the PM officials and the management of the "Latvian railways" to explain the impact of ambitious investments on rail rates, which are already called excessively high.

The coalition party "Unity" has decided to ask Prime Minister Maris Kuccinskis (ZZS) and Transport Minister Uldis Augulis (ZZS) to suspend the announced tender for the railway electrification project, because the party has "legitimate concerns" about its usefulness and legality, says statement from party media.

Concern about the railway electrification project in Latvia is also the New Conservative Party (JKP), which called on the European Commission and the European Investment Bank to suspend this project, according to the party's statement to the media. The JKP sees in the future a costly railway electrification project of at least EUR 440 million that could have a serious impact on the Latvian state budget. The CCP is also concerned that tender documents must be drawn up within a month, which is "a suspicious short term for such projects".


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Latvia will lose its competition in electrification by rail / Article / LSM.LV



A railway electrification project threatens to lose competition in the fight against neighboring countries, and to jeopardize the transit sector, which is dependent on a fifth of the Latvian economy, says the Ministry of Transport (MoU) in a statement to these media.

According to the ministry, the implementation of the railway electrification project in Latvia is fundamentally necessary. The rail electrification project is also the most ambitious infrastructure development project in this EU fund programming period. The intention is to reconstruct and modernize the railway infrastructure more than 300 kilometers in order to reduce CO2 emissions by rail by 20%.

"Government representatives in the media have so far pointed out the openness of the Latvian transit sector to the entrepreneurs of other countries and called for their business in Latvia to be established as an EU Member State, as one of the main arguments that Latvia has started with the implementation of the rail electrification project on the east-west transit corridor ", says the ministry.

The SM notes that this year only 257 kilometers of railways in Latvia have been electrified, accounting for 14% of the total national rail network. This is considerably lower than the EU average of 60%. At present, electric trains can only be used in commuter traffic, while freight traffic, which accounts for about 60% of total rail traffic in Latvia, is limited to diesel trains.

The SM notes that it does not agree with the publicly expressed opinion that the inhabitants of Latvia have a financially disadvantageous project.

"The calculations show that rail electrification will improve the competitiveness of the transit sector, thereby maintaining the international competitiveness of the Latvian transit corridor and maintaining revenues in total government budget revenues," said Ernst & Young Baltic, an audit firm, and tested by audit firm KPMG. The justification includes not only the sector but also wider socio-economic benefits, including the project, which is essential for the development of the Latgale region, creates new jobs, generates additional income for the local population and contributes to reducing unemployment. in the region. This is shown by the experience with previous infrastructure development projects, for example during the construction of the Krustpils-Skriveri railway, the local economic activity in the trade, tourism and service sectors also increased considerably, "emphasizes SM.

The ministry also points out that the resources of the state budget are not invested in the electrification project. The total costs of the first phase are estimated at 441 million euros.

Of this, EUR 347 million is planned from the EU Cohesion Fund. The remaining amount is expected to be attracted by the JSC Latvijas dzelzceļš (LDz) in the form of a loan from the European Investment Bank.

The tendering procedure for the first phase of electrification (Daugavpils-Krustpils line, Rezekne-Krustpils, Krustpils-Riga electrification) was announced in order to start the implementation of the project on time. It provides that applicants must submit qualification documents by 20 September, or that they are formally willing and willing to participate in the further procurement procedure. Candidates who are eligible for the following procedure are invited to submit technical and financial proposals – they will receive a minimum of three months. Most likely, the purchase ends in the spring of 2019, the estimates of the ministry.

CONTEXT:

The decision to first electrify the line from the eastern border to Riga, the electrification of the lines from the eastern border to Riga, was carried out for the first time last year by the government at the beginning of the battle for the electrification of the railways, as a result of which the electrification of Ventspils direction was postponed.

The total costs of the project amount to more than one billion euros. The only trials, or 347 million of the total of more than € 440 million needed for the first stage of electrification, constitute EU funding. There is no clarity about where you can take money for the second and third phases. This is one of the reasons why a part of the transit industry is looking at this project with a creepy skepticism. This is aggravated by the avoidance of the PM officials and the management of the "Latvian railways" to explain the impact of ambitious investments on rail rates, which are already called excessively high.

The coalition party "Unity" has decided to ask Prime Minister Maris Kuccinskis (ZZS) and Transport Minister Uldis Augulis (ZZS) to suspend the announced tender for the railway electrification project, because the party has "legitimate concerns" about its usefulness and legality, says statement from party media.

Concern about the railway electrification project in Latvia is also the New Conservative Party (JKP), which called on the European Commission and the European Investment Bank to suspend this project, according to the party's statement to the media. The JKP sees in the future a costly railway electrification project of at least EUR 440 million that could have a serious impact on the Latvian state budget. The CCP is also concerned that tender documents must be drawn up within a month, which is "a suspicious short term for such projects".


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