Latvia caps Rail Baltica cost at €20 million per kilometer — LSM English

At a closed extraordinary meeting on October 1, the Latvian government set a limit under which the cost of one kilometer of the European-gauge Rail Baltica railway must not exceed €20 million. Previously, this figure had reached €32 million. LSM English reported the decision, citing a government discussion of the project.

Prime Minister Andris Kulbergs said the new approach would make it possible to save billions of euros. At the same time, authorities have not yet disclosed the final cost of the first phase of Rail Baltica.

The cost of the first stage may increase

According to Latvia's Ministry of Transport, the first phase of the project may cost €7.5 billion. This is approximately €2 billion more than estimates announced several years ago. The main Rail Baltica line in Latvia is expected to stretch for more than 200 kilometers.

Last week, the prime ministers of the Baltic states agreed to complete the first phase of the project by 2034. Previously, completion of the work had been planned for 2030.

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According to Kulbergs, the €20 million-per-kilometer limit was set on the basis of a study by independent consultants. This amount does not include major structures, but it covers tracks, electrification and signaling systems needed for trains to operate on the main line.

A minimum scenario will be prepared by December

The Ministry of Transport, with the participation of a consultant, is to develop a minimum project implementation scenario by December. It is planned to use it to determine the costs of the first phase more precisely. The government also approved its scope: an embankment for one track with the possibility of laying a second one in the future, and no more than four regional stations.

Kulbergs called the contract for the main line, which Latvia signed in December 2023 with the E.R.B. Rail JV consortium, disadvantageous. According to him, under the current terms, compensation must be paid even though the project implementation has been suspended and costs continue to rise. Latvia will assess the possibility of revising its obligations under this agreement.