Latvia’s next government will have to assess whether and how the country can afford to continue implementing the Rail Baltica railway project when preparing the next state budget, Transport Minister Rihards Kozlovskis of New Unity (JV) said on TV3’s programme 900 Seconds.
He explained that Russia’s war in Ukraine and other geopolitical developments mean the issue will require serious consideration and difficult decisions.
According to Kozlovskis, it is clear that Latvia can no longer continue implementing the project in the same way as before.
Furthermore, there is currently no clarity regarding funding from the European Union in future planning periods or financing from the European Commission.
Kozlovskis pointed out that a funding shortfall already exists within current contractual commitments, while financial obligations continue to increase.
At the same time, it is impossible to predict how much project costs may rise.
Consequently, there is also uncertainty about the financial burden on the state budget if existing contracts continue.
The minister stressed that the government must take these circumstances into account when preparing the budget and establish a clear expenditure plan for Rail Baltica.
As previously reported, the first phase of Rail Baltica’s main railway line in Latvia is planned to proceed within its existing scope.
This includes establishing a cross-border Rail Baltica connection from Lithuania to the Estonian border, as well as completing construction work at Riga Airport and the southern section of Riga Central Station.
These developments are intended to make it possible to connect Rail Baltica with Latvia’s existing railway network.
The cost of the first phase of Rail Baltica across the Baltic states could reach 14.3 billion euros, including 5.5 billion euros in Latvia.
However, after adjusting for cost increases, Latvia’s share could rise to six billion euros.
According to the project’s cost-benefit analysis, the total cost of Rail Baltica across the Baltic states could reach 23.8 billion euros.
By comparison, the previous cost-benefit analysis, conducted in 2017, estimated the entire project would cost 5.8 billion euros.
Rail Baltica aims to establish a European standard-gauge railway line from Tallinn to the Lithuanian-Polish border, connecting the Baltic states by rail with the rest of Europe.
The project envisages constructing 870 kilometres of new European standard-gauge railway track, with a gauge of 1,435 millimetres, across the Baltic states.
Trains on the new railway are expected to be capable of reaching a maximum speed of 240 kilometres per hour.