State-owned company Latvijas valsts ceļi (LVC) is continuing discussions with road construction companies over a risk-sharing mechanism related to rising prices, LVC Chairman Mārtiņš Lazdovskis said on Tuesday in an interview with TV3’s program “900 sekundes.”
He explained that the current situation in road construction regarding rising prices is very similar to what Latvia experienced in 2022.
At that time, the solution involved additional indexation of costs, abandoning some projects, and postponing payments for certain projects until the following year.
Lazdovskis noted that discussions are currently ongoing with the industry regarding the most appropriate mechanism for sharing risks associated with price increases, especially for bitumen.
“The discussion with the industry is continuing.
We do not yet have consensus on this issue, but most likely within the next two weeks we will make a final decision on how we move forward,” the LVC head said.
He added that the parties hold differing views on what would constitute a reasonable solution, meaning a compromise has not yet been reached.
“We want to modify this mechanism so that we review the situation every month according to actual market conditions, rather than adjusting prices once and then lacking flexibility when prices fall,” Lazdovskis explained.
He stressed that because of this,
the final increase in project costs cannot yet be precisely estimated,
although it could amount to approximately 5–10% of total construction costs.
Lazdovskis also acknowledged that implementation of certain projects may need to be postponed until next year.
One such project could be the reconstruction of the Viļāni–Preiļi–Špoģi road (P58), which had originally been scheduled for implementation in 2027.
In addition, reconstruction work on certain gravel road sections may also be affected.
Latvijas valsts ceļi was established at the end of 2004 and is fully state-owned. The company manages Latvia’s national road network, administers financing for the national road system, and organizes public procurement for state road infrastructure needs.
LVC manages more than 20,000 kilometers of state roads across Latvia.
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