This month Latvian Railway (LDz) financial director Rems Razums and the company’s Technical Directorate’s head, once a board member Ēriks Šmuksts were dismissed from their respective posts. The manager of the company’s Railway Administration Vladlens Makedons was demoted, as reported by TV3 programme Nekā personīga.
Razums stressed that he was not penalised. However, Friday, the 16th of Friday, was his last work day at LDz. According to information from him, his employment with LDz was terminated in agreement from both sides.
“Šmuksts does have a large professional baggage in LDz. WE believe the new requirements and new dynamics require a slightly different approach,” explained LDz manager Rinalds Pļavnieks, adding that Makedons, too, is a respectable worker and is a victim of negligence from other people. He was punished for signing contracts and bills.
Šmuksts and former managers of LDz Uģis Magonis and Edvīns Bērziņš, as well as board member Aivars Strakšas, are accused of abuse of power and creating losses worth EUR 1.5 million to the state. A year ago Šmuksts left his post in the company’s board because of the accusations. He remained the head of the Technical Directorate, however.
According to the programme, the European projects in the works by LDz are taking too long to complete. The company now has to pay back EUR 18 million for projects that should have been completed last year. The contract for the modernisation of 48 trains was completed by LDz in 2021. The European funding for this was planned at EUR 37 million. The project was supposed to had been completed within two years. However, only two railway stops were completed and commissioned for temporary use last year. There are still tasks nearing completion. Some still haven’t started. Pļavnieks hopes work across all lines will be completed by autumn this year.
LDz has lost EUR 20 million of European funding due to various delays.
The project will be continued this year, now that the new planning period has begun and Latvia can sign up for more funding from the European budget.
Construction work is performed by an association of businesses, where the leading company is BMGSS. This company also works on another EUR 71 million LDz project, in which the company works on modernising Jelgava railway line to increase train speed.
This week EU fund supervisor Central Finance and Contracting Agency (CFLA) gave the Ministry of Transport and LDz twoo weeks to prepare information on whether or not the company is able to complete both projects. “If the projects are not completed on time, then it becomes impossible for us to apply the costs that were administered in the planning period. This is a rather large risk – projects have to be completed,” explained CFLA Infrastructure Development Department’s director Solita Dombrovska. This means LDz may have to repay the European funding already spent on projects. The funding allocated towards railway passenger platform modernisation reaches nearly EUR 18 million.
BMGS board member Rūdolfs Bubinduss admits there are some slight delays in all projects, adding that these delays were caused by “requirements from third parties or changes of binding rules”. He stressed there is nothing critical there.
BMGS blames the mess with lease of LDz equipment and missed payments for the ongoing delays. The state company criticises the private contractor for their inability to sort paperwork and attract workers. The source of this dispute could be the fact that, in addition to existing projects, the construction company is also fighting for a contract to modernise the electrified network in Bolderaja’s direction, the programme reports. Last year, BMGS was excluded from the procurement. The project was won by the association of Nordes būve and BCC. The company has hired TEK Baltic to assist with the project worth EUR 58 million. Ex-politician Emīls Jakrins owns shares in this company.
Also read: Latvia among nine EU countries with a drop in new registrations of cars
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Programme: LDz financial director and head of Technical Directorate dismissed from posts
