The Rail Baltica railway project has reached a point where one of the greatest risks to its further progress is no longer technical readiness or construction capacity, but delayed and inconsistent political decisions, according to Marko Kivila, Chairman of the Management Board of the Baltic joint venture RB Rail.
While the leaders of the Baltic states and Poland have repeatedly reaffirmed their commitment to completing the project at the European level, public debate in Latvia has once again turned to whether the country can afford it, Kivila noted.
He stressed that European Union (EU) support for Rail Baltica is not merely a political declaration. This is demonstrated by the 4.5 billion euros in funding already allocated, reflecting the project’s strategic importance at the European level.
“Therefore, at this stage of the project, the most important question is not whether Latvia can afford Rail Baltica, but how Latvia will continue construction, fulfil its commitments and make full use of this substantial EU support,” Kivila said.
He recalled that on 16 October, the leaders of four countries reaffirmed their commitment to completing Rail Baltica during the next EU multiannual budget period in a joint letter to EU leaders, calling for predictable European funding for the project.
Project implementers take such commitments seriously because construction planning and contractual obligations are based on them.
They also take seriously public statements that raise doubts about the project’s financing prospects.
Kivila pointed out that such signals reach other EU member states and Brussels, making it difficult to demand predictable European funding when Latvia’s own decision-making remains unpredictable.
“The financing challenges facing Rail Baltica are well known. Simply repeating them will not build a single kilometre of railway. Latvia did not arrive at its current situation overnight. It has also been shaped by postponed decisions, including those concerning the project implementation schedule, financing plan and infrastructure manager, as well as inadequate financial planning and the inability to agree on priorities in time,” Kivila said.
In his view, it would be paradoxical to use these same problems as arguments for further delaying the project.
Kivila explained that several financing scenarios are available, combining EU co-financing, national contributions and other financial instruments while spreading investments over a longer period.
He believes Latvia needs a concrete decision that reflects the country’s fiscal capacity.
According to Kivila, Estonia has recently demonstrated how such challenges can be addressed in practice.
Its revised schedule envisages completing the Tallinn–Pärnu connection by 2032 and the cross-border section by 2034.
At the same time, planned investments for 2027 have been reduced from 919 million euros to 541 million euros, while investments for 2028 have been cut from approximately 1.06 billion euros to 453 million euros.
Kivila emphasised that Estonia’s plan also depends on future EU funding and that the country has not resolved all its financing challenges.
However, Estonia has made decisions on how to address them. He believes Latvia needs an equally concrete approach.
Rail Baltica construction is already underway in all three Baltic states, Kivila noted.
More than 40% of the first phase of the main railway line is either under construction or ready for construction to begin.
In Latvia, construction contracts cover more than 200 kilometres, but the actual pace of work is significantly slower than in neighbouring countries, Kivila acknowledged.
Meanwhile, the implementation deadlines for several Connecting Europe Facility (CEF) funding agreements expire in 2028, with some extending into 2029.
Kivila stressed that EU funding deadlines will not wait for Latvia to finish discussing why making decisions is difficult.
“Moreover, Latvia is not alone in this project. Estonia and Lithuania are investing millions to establish a connection with the rest of Europe, and its full operation also depends on the Latvian section. Our neighbours can make their own decisions and build their own railways, but they cannot build Latvia’s section for it. Latvia’s delays also postpone the return on their investments. This is a responsibility that extends beyond Latvia’s national budget,” Kivila said.
He explained that slowing construction is not a cost-free solution.
It creates risks associated with renegotiating contracts, price indexation and additional expenses.
Kivila stressed that unused EU funding means the same construction work will cost more in the future.
At the same time, delays postpone the benefits of the new railway connection with Europe, including opportunities for freight and passenger transport, business development and military mobility.
Kivila also highlighted that construction investments generate fiscal returns.
According to project estimates, approximately 19–21% of invested funds return to the national budget through tax revenues.
As previously reported, Transport Minister Rihards Kozlovskis of New Unity (JV) said on Monday, 26 October, during TV3’s programme 900 Seconds that the new government would have to assess whether and how Latvia could afford to continue implementing Rail Baltica while preparing the next national budget.
Kozlovskis explained that Russia’s war in Ukraine and other geopolitical developments require serious consideration and decisions, as it is clear that Latvia can no longer continue with the approach used so far.
Furthermore, there is currently no clarity regarding funding from the EU in future planning periods or financing from the European Commission.
LETA previously reported that the first phase of Rail Baltica’s main railway line in Latvia is planned within the existing scope.
This includes establishing a cross-border Rail Baltica connection from the Lithuanian border to the Estonian border, as well as completing construction at Riga Airport and the southern section of Riga Central Station to enable connections between Rail Baltica and the existing railway network.
Consequently, the first phase does not include the so-called Riga loop.
It has also been reported that the first phase of Rail Baltica could cost 14.3 billion euros across the Baltic states, including 5.5 billion euros in Latvia.
However, after accounting for price indexation, Latvia’s costs could reach 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.
The previous cost-benefit analysis, conducted in 2017, estimated the project’s total cost at 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 with the wider European railway network.
The project envisages constructing 870 kilometres of new European standard-gauge railway tracks, with a gauge of 1,435 millimetres, across the Baltic states.
Trains on the new railway are expected to reach maximum speeds of 240 kilometres per hour.