The Baltic joint venture RB Rail AS still requires 4.091 million euros in funding from Latvia this year (excluding VAT) to cover its expenses, the company’s CEO Marko Kivila told the LETA news agency.
He explained that this year’s total RB Rail budget is 37.966 million euros (excluding VAT), of which Latvia’s share is 8.542 million euros. Currently, Latvia is short 4.091 million euros, with an additional 3.236 million euros needed to cover VAT costs. The other two Baltic states have already approved the joint venture’s budget.
“The RB Rail budget is determined by the international Project Management Agreement, which defines the functions that RB Rail provides to the Rail Baltica project. These functions determine the budgeted costs, and any reduction is only possible if all three Baltic states agree,” Kivila added.
He noted that RB Rail received 3.345 million euros from the Latvian government in February—about half of the required contribution—but discussions are still ongoing regarding the remaining amount of approximately four million euros.
“In February, the Latvian government decided to finance costs specific to Latvia—services provided in Latvia’s interest. However, most of Latvia’s co-financing for shared activities remains unapproved,” Kivila stated.
He clarified that the EU covers 58% of the RB Rail budget, while Latvia contributes 18%, and Lithuania and Estonia each 12%. “Even a small reduction in Latvia’s co-financing would result in a significant decrease in the total budget and would impact services in the other countries as well, because Latvia’s financing serves as a leverage mechanism,” he explained.
At the same time, the RB Rail CEO stressed that Latvia’s contribution for 2025 was already reduced by 27%, making further cost cuts difficult this year, especially since the current expenses are based on a previously approved budget and no decision has been made to suspend any activities.
Kivila concluded that although RB Rail is primarily funded by the EU, Estonia, and Lithuania, most of its staff and expenditures are based in Latvia, meaning the company’s economic contribution to Latvia is exponentially larger than the country’s financial input.
Therefore, Kivila emphasized, a clear and timely commitment from the Latvian government regarding the remaining funding is crucial.
As previously reported by LETA, on the 11th of February, the government approved reallocating 3.345 million euros from two Ministry of Transport budget programs to cover part of RB Rail’s costs.
According to the latest RB Rail estimates, Phase 1 of Rail Baltica could cost 14.3 billion euros in the Baltics, including 5.5 billion euros in Latvia. However, cost savings of up to 400 million euros are possible through technical optimizations, along with other potential savings.
Total project costs could reach 23.8 billion euros, according to the most recent cost-benefit analysis—compared to 5.8 billion euros estimated in 2017.
The Rail Baltica project aims to create a European standard-gauge railway line from Tallinn to the Lithuanian-Polish border, connecting the Baltic States with the rest of Europe. A new 870-kilometer track will be built using 1435 mm gauge, designed for trains running up to 240 km/h.