In April 2022 Latvian state company Latvian State Roads (LVC) received letters from all major construction companies engaged in road construction procurements. Construction companies outlined in letters they are unable to do their jobs at the prices that were proposed before 24 February, when Russia invaded Ukraine.
The offers received in procurements in March and April are already 10% to 15% more expensive than previously planned, BNN was told by LVC.
To resolve this situation, once the Procurement Monitoring Bureau (IUB) published guidelines for reviews of contract costs, LVC started working on a contract review principles. Multiple meetings were organised with the sector’s association – Latvian Road Builders association and its members. Currently LVC contract review method is formulated and the company plans to submit it to IUB for approval soon. Once the bureau’s report has been received, LVC will start reviewing the contracts submitted prior to 24 February.
There is also the possibility of entrepreneurs terminating contracts signed before 24 February. This means it will be necessary to resign contracts for specific construction projects.
So far LVC has received one application for termination of a contract – A.C.B. Group reports it plans to terminate the contract for construction work on the state road leading from the Russian border (Grebneva) – Rezekne – Daugavpils – Lithuanian border (Medumi) (A13). Once the contract is terminated and once other contracts signed after 24 February are reviewed, a new procurement will be planned for construction work on A13 section of the road.
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