In the context of the oil product price crisis, immediate solutions are needed in the road sector, said Transport Minister Atis Švinka on Wednesday at the annual conference of the Latvian road sector organized by Latvijas valsts ceļi (LVC).
He noted that discussions are currently taking place both at the European Union level and with industry associations, as solutions must be implemented without delay.
“The construction season has begun, contracts must be signed, and projects must be carried out. I have submitted specific solutions to the government that address the increase in the price of bitumen components, as well as contracts regulating execution and completion deadlines,” Švinka stated.
The minister emphasized that the solutions were initially planned to be reviewed at this week’s government meeting, but are now expected to be discussed next week.
As previously reported,
the Ministry of Transport has prepared an informative report on the impact of the Middle East conflict on Latvia’s transport sector,
outlining possible solutions and support mechanisms. According to information available on the legislative portal, the report has restricted access status.
The report draws on experience gained during previous crises, particularly referring to the 2022 construction season following Russia’s invasion of Ukraine, when a methodology for recalculating construction costs was applied under conditions of significant price increases.
The Ministry of Transport and the industry agree that a similar or updated solution is currently needed, adapting this methodology to the present geopolitical and market situation in order to respond flexibly to significant fluctuations in fuel and raw material prices.
In the road sector, the ministry, in cooperation with LVC, plans an approach that provides for more flexible contract application and a pragmatic approach to public procurement processes. At the same time,
options are being evaluated to compensate for rising costs
by recalculating unit prices of construction works, including those involving bitumen, as well as applying construction cost indices from the Central Statistical Bureau to cover changes in the prices of other resources and materials.
There is also a plan to allow extensions of contract execution or signing deadlines and, in certain cases, to waive penalties for delayed commencement of works if the reasons are related to external circumstances beyond the control of either the contracting authority or the contractor.
It is also reported that the annual Latvian road sector conference is taking place in Jūrmala on the 22nd and the 23rd of April. The first day of the conference is dedicated to road network development and traffic safety, while the second day focuses on technology and road maintenance issues.
Latvijas valsts ceļi was established at the end of 2004 and is state-owned. The company manages the national road network, administers its funding, and organizes public procurement. It oversees more than 20,000 kilometers of state roads.
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