„RB Rail“ compared the unit price of embankment construction according to the main line contracts in Latvia, Lithuania, and Estonia to obtain comparable figures. In the Latvian section Misa–Latvian and Lithuanian border (DS4), the price per kilometer is about 10.3 million euros, which is 2.3 times higher than the average price in Estonia and about 66% more than in Lithuania.
“It is obvious that the unit prices for crushed stone, soil, and other main materials stipulated in the Latvian contract are very high, and the state cannot afford it,” emphasized M. Paegle.
Therefore, according to him, the Latvian state must decide how to proceed. The first option is to redesign the southern section of the main line project, which would take about two and a half years. The redesign would cost about 8 million euros but could save between 100 and 200 million euros.
“However, if a new public procurement is announced after two or three years, due to inflation, we could get even higher bid prices,” said M. Paegle.
Another option, according to M. Paegle, is to hold a discussion with the main line builder “E.R.B. Rail JV” and ask why materials such as gravel, crushed stone, and others are so disproportionately expensive compared to neighboring countries. He believes it is necessary to negotiate a reasonable reduction in the unit price.
In the report of the Latvian Ministry of Transport, approved by the government on May 26, it is stated that Latvia has 603 million euros for the construction of the main railway line. With these funds, it is now possible to build 52.66 km of the main railway line embankment. Thus, the cost of constructing the main railway line embankment is about 11.45 million euros per kilometer, excluding tracks, signaling systems, and stations.
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The report states that since last July, the Ministry of Transport has been involved in negotiations with the main line builder ERB and demanded cost reductions and acceleration of work. As a result, work worth 110 million euros was authorized last year, and the company implementing the project in Latvia, “Eiropas Dzelzcela Linijas” (EDzL), reported that work worth 125-175 million euros will be authorized in 2026.
The Ministry of Transport continues to improve the cost per kilometer calculations and adapts the project to the available funding resources.
“EDzL” and “E.R.B. Rail JV PS” signed a contract for the construction of the “Rail Baltica” main line in Latvia in December 2023.
According to “RB Rail,” the cost of the first stage of “Rail Baltica” in the Baltic countries could reach 14.3 billion euros, of which 5.5 billion euros would be the project costs in Latvia.
