On 16 December this year, the Ministry of Transport and Communications (MoT) has received a report on the costs of Riga Central Railway Station (RCS) prepared by EIB Advisory /JASPERS experts representing the partnership between the European Commission and the European Investment Bank. The report concludes that the costs of RCS South Phase 2B are reasonable and correspond to the costs of a similar project in another comparable country.
The report of international experts is a positive signal for the reallocation of funding from the European Union (EU) funds for the related activities of the Rail Baltica project, including the reallocation of funding from the Recovery Fund (AF) for the completion of construction works at Riga Central Railway Station. Additional informal support has been received from the European Commission in the negotiations on MoU proposals for the reallocation of EU funds.
As previously reported, with the aim of reducing the risks of non-use of financing from the European Union (EU) funds for the 2021-2027 programming period and promoting the development of investment projects significant for the sector, the MoU prepared proposals for redistribution of financing from the EU funds in September this year.
At the same time, before reallocating the funding available for the development of the railway sector, JASPERS experts were engaged at the initiative of the Ministry of Finance to provide a professional opinion on overall feasibility of current technical proposals, including cost, helping inform MoU's proposal to reallocate the AF funding of EUR 114.63 million for the related activities of the Rail Baltica project in the southern part of the RCS.
The experts have analysed the investment costs of Rail Baltica RCS, focusing in particular on the station building (stage 2B), which needs to be completed in order to put the southern part of the RCS into operation and start using the station as soon as possible to service 1520mm passenger trains. Construction works at this stage include works on the floor of the waiting room of the station building and on the roof of the station, including platform access and platform finishing works, as well as site improvement works.
Since the signing of the contract, the construction costs of the RCS have increased due to both additional technical requirements and high inflation. In order to assess the reasonableness of the cost increase, JASPERS experts analysed the initial cost of construction works, the additional requirements included and also the increase due to inflation indexation. In addition, a comparative analysis was carried out using similar technical data from other railway station projects assessed by JASPERS.
The report concludes that the costs of RCS following the inclusion of additional technical requirements do not exceed the 5% is within the margin of uncertainty when compared to the costs of similar projects in other countries. This benchmarking exercise demonstrates shows that the cost of a project corresponds to the cost of a similar project in another comparable country.
Additional information:
After approval of the reallocation of funds under the responsibility of the MoU, the Ministry of Finance plans to submit programme amendments to the Cabinet of Ministers for approval, ensuring subsequent official submission to the European Commission.