On Wednesday, the 16th of October, Latvian Saeima’s Parliamentary Inquiry Committee viewed an application from opposition party National Alliance addressed to Minister of Transport Kaspars Briškens concerning the train supply contract signed with Czech Škoda Vagonka and the possible penalty for failure to meet contract terms.
Ģirts Dubkēvičs, parliamentary secretary to the Ministry of Transport, said the ministry maintains the initial claim against Škoda Vagonka with the planned severity, however, passenger transportation services remain a priority.
“The commissioning of the 31st train is in process right now and is set to end soon. The 32nd train is in the assembly process,” he said.
Dubkēvičs said that once the contract is fulfilled, it will be possible to move forward and actively discuss with the company about penalties. “It is clear that these penalties will be. The ministry has not departed from it. The final decision will be made taking into account the documentation and explanations provided by Škoda Vagonka,” he stressed.
Saeima deputy and former minister Jānis Vitenbergs claimed the responses received from the ministry and Pasažieru vilciens (PV) were nothing more than “classic canned answers”.
“All trains should have been delivered by the end of 2023, but then an additional agreement was signed that the trains would be delivered by the middle of this year. Neither was done. This agreement does not allow for the imposition of penalties for the delay of the first trains,” added the deputy.
Dubkēvičs pointed out that this is not a disclaimer, as the parties involved inform about the main reasons that influenced the delivery of trains. He also drew attention to the fact that it would be possible to talk more about contractual penalties after the completion of the contract.
At the same time, the Director of the Ministry of Transport Railway Department Patriks Markēvičs mentioned that the contract is still in the implementation stage. From a legal point of view, according to him, PV should not answer such questions at all, as it is very related to the tactics of the legal proceedings, including what the arguments of the parties will be.
Raimonds Čudars of the Parliamentary Inquiry Committee asked at what point PV will be ready to report about the position regarding the amount of contractual penalties and deductions. Dubkēvičs replied that he would refrain from naming a specific date. “It is clear that this will happen after all trains have been accepted into service and the legal conditions have been assessed. I think this will happen in the near future,” the ministry’s representative added.
Vitenbergs noted that four months have already passed since all trains should have had been commissioned, adding that the Covid-19 pandemic and the war in Ukraine no longer affected these delivery times. In his opinion, the ministry and PV did not fight to the end and still do not understand what it is it they have signed.
Dubkēvičs stressed that the contract is a joint document and is in the operational phase. He confirmed that “Škoda Vagonka” must be punished and PV will take action against the company with all possibilities and severity.
The response prepared by the ministry to the committee states that the concluded agreement provides for several mechanisms protecting the interests of PV. Until delivery of the last electric train is performed, at least EUR 11 million will be available, because in accordance with the terms of the concluded contract, 5% of each payment for each delivered train is withheld and paid after the delivery of all trains.
In addition, Škoda Vagonka has provided a performance guarantee (bank guarantee), which will be valid for five years after the commissioning of the last electric train, providing the possibility for PV, if necessary, including in respect of unpaid contractual penalties, to take action against the guarantor for the fulfilment of obligations undertaken by Škoda Vagonka.
It is also mentioned that PV does not exclude the possibility that Škoda Vagonka may disagree with the calculated fines and penalties, the early dissemination of this information may complicate the negotiation process or weaken the position of PV in court if no agreement is reached between the parties to the agreement in accordance with the agreement.
It has already been reported that in mid-December 2023 the PM started passenger transportation with the new electric trains produced by the Czech company Škoda Vagonka. Before that, the trains were tested and tested for a long time on the Latvian railway infrastructure. Despite this, the new trains were regularly plagued with various technical problems in December last year and January this year.