Foto: BB.LV / rail baltica
The further implementation of the Rail Baltica railway project is under threat due to delays in political decisions in Latvia. The main issue lies not in technical readiness or the capabilities of builders, but in the lack of a consistent approach to financing and implementing the project. As stated by the chairman of the Baltic states' joint venture RB Rail, Marko Kivila, Latvia needs to stop limiting itself to discussions about financial difficulties and make concrete decisions regarding further construction. According to him, there is a contradiction: at the European level, the leaders of the Baltic states and Poland repeatedly confirm their intention to complete Rail Baltica, yet within Latvia, doubts arise again about whether the state can afford this project. Kivila reminds that the support for Rail Baltica from the European Union is not limited to political statements. A total of 4.5 billion euros in European funding has already been allocated for the project's implementation. > "Therefore, at this stage of the project, the most important question is not whether Latvia can afford Rail Baltica, but how Latvia will continue construction, fulfill its commitments, and fully utilize this significant EU support," emphasized the head of RB Rail. ## "Funding problems are known, but they won't build a single kilometer of railway" Kivila reminded that on October 16, the leaders of Latvia, Lithuania, Estonia, and Poland sent a joint letter to the EU leadership, confirming their intention to complete Rail Baltica in the next multiannual budget period. In the letter, they also called for predictable European funding for the project. According to the head of RB Rail, such commitments have practical significance, as construction works and contracts are planned based on them. However, public statements about Latvia's possible inability to finance the project are also noted in Brussels and other EU countries. Kivila believes it is difficult to demand stable funding from European partners if Latvia itself does not ensure consistency in its own decisions. > "The funding problems of Rail Baltica are well known. Reiterating them will not build a single kilometer of railway," he stated. In Kivila's opinion, the current situation has also been caused by postponed decisions regarding the construction schedule, financing plan, and future infrastructure management. Among the reasons, he also mentioned insufficient financial planning and the inability to timely agree on priorities. The head of RB Rail considers it paradoxical to use these same problems as an argument for further delaying the project. He notes that there are various funding scenarios involving a combination of European funds, state investments, and other financial instruments, as well as spreading costs over a longer period. In his opinion, Latvia needs to choose a specific option that matches its budgetary capabilities. ## Estonia has already revised the schedule and expenses As an example, Kivila cited Estonia, which recently adjusted the construction timelines for Rail Baltica and the distribution of investments. According to the updated plan, the railway connection between Tallinn and Pärnu is expected to be completed by 2032, and the cross-border section by 2034. Meanwhile, the planned investments for 2027 have been reduced from 919 million to 541 million euros, and for 2028 from approximately 1.06 billion to 453 million euros. Kivila acknowledges that Estonia also depends on further EU funding and has not yet resolved all financial issues. However, according to him, the country has already determined how to act in the current circumstances. A similar concrete approach, the head of RB Rail believes, is also necessary for Latvia. ## Latvia is lagging behind its neighbors, and the deadlines for European funding are expiring Construction of Rail Baltica is already underway in all three Baltic countries. According to RB Rail, more than 40% of the main route of the first phase is under construction or ready to begin work. In Latvia, construction contracts cover more than 200 kilometers of railway line, but the actual pace of construction significantly lags behind neighboring countries. At the same time, the deadlines for implementing several agreements on financing under the European Connecting Europe Facility (CEF) are already expiring in 2028, and some agreements in 2029. > "The deadlines for using EU funding will not wait while Latvia concludes discussions on why it is so difficult to make decisions," Kivila warned. He also emphasized that Rail Baltica is a joint project of the three Baltic states, so delays in one country affect the other participants. > "Estonia and Lithuania are investing millions to create a connection with the rest of Europe, the full functioning of which also depends on the Latvian section. Our neighbors can make their own decisions and build their railway, but they cannot build it instead of Latvia," stated the head of RB Rail. According to him, delays in Latvia also mean a postponement of returns on investments from Estonia and Lithuania. > "This is a responsibility that goes beyond the Latvian state budget," emphasized Kivila. ## Delaying construction also costs money The head of RB Rail points out that slowing down the project's implementation does not mean savings. On the contrary, postponing deadlines may lead to the need to revise construction contracts, price indexing, and incurring additional costs. If the allocated EU funding is not used in time, in the future, it may be necessary to pay more for the same work. At the same time, the benefits from the new railway connection with Europe are also postponed — both for passenger and freight transport, as well as for business activities and military mobility. Kivila also noted that construction provides revenue to the state budget. According to project estimates, about 19–21% of the funds invested in construction are returned to the state in the form of tax revenues. ## The Minister of Transport suggested reviewing Latvia's options Kivila's statement followed the remarks of the Minister of Transport, Rihards Kozlovskis ("New Unity"), who on October 26 in the TV3 program "900 seconds" raised the question of further financing possibilities for Rail Baltica. According to the minister, the new government will need to seriously assess whether Latvia can afford to continue the project and in what manner when preparing the next state budget. Kozlovskis pointed to the changed geopolitical situation, including Russia's war against Ukraine, which requires a reassessment of state priorities. The minister also noted that there is still no clarity regarding the volumes of European funding in the upcoming budget periods. In his opinion, the state can no longer continue the implementation of Rail Baltica in the same manner. ## The cost of the Latvian section could reach six billion euros As previously reported, the first phase of Rail Baltica in Latvia involves the construction of the main route from the border with Lithuania to the border with Estonia. In addition, it is planned to complete construction work at Riga Airport and the southern part of Riga Central Station to ensure the connection of the new railway with the existing network. The so-called Riga loop is not included in the first phase of the project. According to current estimates, the cost of the first phase of Rail Baltica in all three Baltic countries could reach 14.3 billion euros. Of this amount, Latvia accounts for about 5.5 billion euros, and with cost indexing, the price could increase to six billion. The total cost of the project in the Baltic states, according to the cost-benefit analysis, is estimated at 23.8 billion euros. For comparison, in the previous analysis prepared in 2017, the total cost of Rail Baltica was estimated at 5.8 billion euros. The project involves the construction of a railway line of European gauge — 1435 mm — from Tallinn to the border with Lithuania and Poland, with further connection to the European railway network. The total length of the new line in the Baltic states will be 870 kilometers, and the maximum speed of trains is expected to be 240 kilometers per hour.
