“To ensure Latvia’s national economic and security interests and fulfil international commitments, the first phase of the project should prioritize establishing a high-priority cross-border connection. Additionally, a European-gauge connection with at least one of Riga's two international Rail Baltica stations should be established. Considering the size of the population and density of the Riga metropolitan area, this would ensure a significantly larger passenger volume and added value from the initial phase of operations. The upcoming EU multiannual budget negotiations will determine how much EU funding will be available for the Rail Baltica project. The availability of this funding will also determine how soon we will be able to implement the first phase of the project, including its part in Latvia," emphasizes Minister of Transport Kaspars Briškens.
In the first phase of the project, the Ministry of Transport proposes:
- Constructing a single-track railway from the Lithuanian border to the Estonian border, starting with the section from the Lithuanian border to Misa based on the currently already available funding.
- Completing the ongoing construction works at both Rail Baltica international stations in Latvia - Riga Airport (RIX) and the southern part of the Riga Central Railway Station (RCS), thus enabling these two facilities to start full-fledged operation. This can be done by internal redistribution of the financing available to the transport sector in the Recovery and Resilience Facility and the Cohesion Fund.
- Constructing a new railway line from the existing Imanta station to Riga Airport, thus allowing to connect both international stations with a broad-gauge railway and integrating Riga Airport into the existing railway network even ahead of the European broad gauge line construction.
- Constructing at least 4 regional Rail Baltica stations (Salacgrīva, Skultes muiža, Salaspils (Daugavkrasti), Bauska) as well as the infrastructure maintenance points in Iecava and Skulte, a traffic control centre and a side-road for the Salaspils intermodal freight terminal;
- Alongside with the cross – border connection, which is of the highest priority and urgency - constructing a European standard-gauge connection to one of the two international stations in Riga, based on a separate technical and economic analysis determining which of the two connections (Upeslejas-RCS or Misa-RIX) is more advantageous from an economic, technical and financial perspective. Alternative financing solutions such as Public Private Partnership (PPP) will be explored for this connection, while the EU funds will primarily be directed towards funding the activities mentioned in the points above.
In the view of the Ministry of Transport, the first phase solution will also ensure the fulfillment of Latvia’s international obligations and allow progressing towards at least the minimum scope required for the implementation of the project within the deadline set by the European Transport Network (TEN-T) regulation. To recall, as of this summer Rail Baltica is part of already two European transport corridors: the North Sea – Baltic and the Baltic sea – Black sea – Aegean sea corridor. The scenario outlined will also provide the greatest added value to the citizens and the economy of Latvia, allowing an early start of gradual operation of the built Rail Baltica infrastructure.
According to the estimates of the project developers, the total investment cost of the first phase cross-border connection from the border of Lithuania to the border of Estonia (using only the cargo bypass through Salaspils) is estimated at 4.5 billion euros. The estimated total costs of both international passenger stations and the interconnected infrastructure amount to 875 million euros, while for the construction of point-type objects, including infrastructure maintenance facilities in Iecava and Skulte, the traffic control centre and the side-road for the Salaspils intermodal freight terminal, as well as four regional stations, estimated 133 million euros are needed. The estimates of the joint venture RB Rail AS indicate that an European track gauge connection on the section Upeslejas - RCS would require 629 million euros and 924 million euros for the section Misa - RIX. These estimates are based on the initial technical study and the technical solutions proposed in it. With active collaboration among all parties involved, it is possible and seen highly viable to modify and optimise the technical solutions, which could significantly reduce the investments required for the delivery of these sections.
In paralel, under the leadership of the Ministry of Transport, work is ongoing to optimise the first phase construction costs. The project implementers carry out a comprehensive review of the technical solutions, identifying cost items where simplification of technical solutions is possible such as highway crossings, access roads, noise walls, etc, as well as identifying infrastructure elements that can be built in the next stages.
From 2015 to 2024, by participating in calls announced by the European Commission for the allocation of financial assistance from the Connecting Europe Facility (CEF), incl. from the Military Mobility envelope, a total of 1.426 billion euros have been raised in Latvia, including co-financing from the Latvian state budget. In the last CEF call planned under the 2021 – 2027 EU multiannual financial framework that was announced in September 2024, Latvia could potentially attract additional 160 million euros which would allow to further extend the construction works in the southern part in the direction from the Lithuanian border to Salaspils.
To complete both international stations in Riga already in the first phase, the Ministry of Transport proposes utilizing funds from the European Union’s Recovery and Resilience Facility and the Cohesion Fund allocated to the railway sector. Proposals for the redistribution of funds from the Recovery Fund and the Cohesion Fund are contained in the Informational Report 24-TA-2110 on the development of the Latvian railway network in the 2021-2027 European Union multiannual budget period, which has been submitted to the responsible ministries for interservice coordination.
According to the conclusions of the inter-institutional financial working group, the missing funding for the remaining first phase activities is planned to be sourced from CEF and other EU grant programs, state budget co-financing, and other financial sources. In the planning, securing, and alignment of project financial flows with state budget processes, the Ministry of Finance plays a critically important role; in negotiations with potential private investors – the Ministry of Economics; while in the negotiations on the next EU multiannual budget – the Ministry of Foreign Affairs. Under the leadership of the Ministry of Foreign Affairs, work has already begun on Latvia's national position for the next EU multiannual financial period (2028–2034).
The continuation of Rail Baltica’s next stages, which are essential for realizing the project’s full scope, depends on the availability of funding. In the opinion of the Ministry of Transport, completion of the project in its full scope is a precondition to obtain maximum social and economic benefits for Latvia, the Baltic region and the whole of EU. As a priority in the second phase of the project, the Ministry of Transport envisions the development of a fully functional European track gauge corridor through the city of Riga, i.e., establishing the passenger main line according to the Rail Baltica route determined by the Cabinet of Ministers in 2016, as well as meeting the technical and functional requirements set out in the TEN-T regulation.
In addition, the Ministry of Transport is preparing the informational report “On the additional state budget funding required for the implementation of the Rail Baltica project in 2024 and 2025”. This report will provide details on the amount of funds needed to complete the ongoing work and to achieve the objectives of the concluded financing agreements (CEF1-6).
In 2024, the Ministry of Transport has reduced the required amount by more than 20 million euros to approximately 15 million euros, and for 2025 - to 50 million euros. The total additional funding does not exceed the previously indicated necessary funding amount, which was detailed in the informational report of 23.07.2024, No. 24-TA-1604, 'On Rail Baltica International Station Construction Works' and in the informational report of 27.08.2024, No. 24-TA-1977, 'On the Funding for Rail Baltica from the Tenth Call of the Connecting Europe Facility.' Simultaneously, in line with previous government decisions, an assessment of the administrative cost optimization for Rail Baltica implementation organizations continues.
The informational reports are generally available to anyone interested in the Public Portal of Laws and Regulations (TAP).