Latvian Ministry of Finance categorically disagrees with the final report from Saeima’s parliamentary inquiry committee and the criticisms and conclusions listed in it in regards to the ministry’s activities with Rail Baltica project.
The ministry’s activities have always been transparent, responsible, justified and compliant with regulations.
It should be stressed that it was as the result of the active involvement from the Ministry of Finance the problems identified in the project were brought to the attention of politics and residents alike, the ministry reports.
On the assignment of the Minister of Finance of the Ministry of Finance, the ministry carried out an inspection of the Rail Baltica design phase in order to find out whether the additional funding requested by the Ministry of Transport is sufficiently justified by calculations, expert evaluation and other research and analysis of the situation. Results of the audit provided a clear basis for further actions: escalating problems at the political level and informing the public about the implementation of this strategically important project, the ministry said.
Also, the ministry’s experts have consulted with their Estonian counterparts to discuss regional economic challenges, fiscal and budgetary policy priorities, including discussing the implementation and financing process of the Baltic-wide infrastructure project “Rail Baltica”. In order to assess the attraction of additional funding, the European Union (EU) funds programs are reviewed.
At the same time, the Ministry of Transport repeatedly and still calls for a review and reduction of the project costs. It has also produced results, according to the ministry.
The Ministry of Transport emphasizes that the Rail Baltica project is a transport sector initiative and, in accordance with the regulatory enactments, the Ministry of Transport is responsible for its full implementation. The Ministry of Finance has access to the information provided to it by the Ministry of Transport. The involvement of the Ministry of Finance in the implementation of the project is based on its competence provided for in regulatory enactments, such as the Law on Budget and Financial Management, as well as on the decisions taken by the Cabinet of Ministers. In turn, the project risk management, cost assessment (including cost-benefit analysis) and control must be provided by the project implementer, who has access to all information related to the implementation of the project, explains the Ministry of Finance.
At the same time, the task of the Ministry of Finance is to ensure fiscal discipline and effective management of the state budget funds, which has also been carried out. The Ministry of Finance has ensured that the funding programmed in the Ministry of Transport budget for the implementation of the project does not exceed the amounts of the project commitments approved by the government. At the same time, the Ministry of Finance has repeatedly emphasized the need for full transparency of the project and clear distribution of responsibilities in order to prevent problems related to the implementation of the project in the future, according to the ministry.
Also, taking into account the limited resources available in the state budget, it is recommended to plan the pace of implementation of the Ministry of Finance project in the future in accordance with the amount of available EU funding and its expected flow, as well as to focus on the preparation of the public-private partnership project for the construction of certain sections of the main track.
In the opinion of Ministry of Finance, this is the only opportunity in the coming years to obtain additional funding for the project, while emphasizing that there is no possibility to attract a loan by providing it with off-balance sheet accounting.
Rail Baltica is one of the largest and most strategically important projects in the region, which is essential not only for the growth of the economy and the development of mobility in Latvia, but in the whole Baltic States. The Ministry of Finance calls on the Ministry of Transport to improve access to information and strengthen cooperation so that the implementation of Rail Baltica is carried out as planned and transparently as possible. The Ministry of Finance confirms its readiness to continue to constructively cooperate and engage in solving the issue within the scope of its competence in order to ensure the effective use of state budget funds and promote public confidence in the management of large infrastructure projects.