The Rail Baltica project in the three Baltic States may need 10-19 billion euros more than planned, auditors from Lithuania, Latvia and Estonia have said in a joint report.
One of the EU’s biggest infrastructure projects in the Baltic States, Rail Baltica is meant to connect the three countries and Poland with a European-gauge high-speed railway. The construction, however, has been beset by delays.
“The Rail Baltica project’s progress is at risk because its estimated cost has quadrupled over seven years and the project’s size could lead to a budget deficit of 10-19 billion euros,” the auditors said on June 12.
“The project will not be completed by 2025 as planned. Not only the five-year delay in the project’s implementation is a cause for concern, but also the more than four-fold increase in its budget, which will require an additional almost 9 billion euros to implement the planned works in Lithuania,” Auditor General Mindaugas Macijauskas said in a statement.
The authorities estimate that a further 19 billion euros will be needed to complete the entire project: 2.7 billion in Estonia, 7.6 billion in Latvia and 8.7 billion in Lithuania.
The auditors calculated the estimated need for additional funding by looking at the latest Rail Baltica budgets for the three countries, including European Union (EU) and national funding already committed since 2014 and still to come, 23.8 billion euros across the Baltic States.
According to the auditors, Rail Baltica’s deficit would be reduced to 10.1 billion euros until 2030 (1.8 billion in Estonia, 4.4 billion in Latvia and 3.90 billion in Lithuania) if the countries reduce the scope of work as they are planning, by building local stations with minimum functionality or delaying their construction and by building single-track railway on some sections.
However, it is not clear how much funding will be made available for the project from 2028 onwards from the Connecting Europe Facility, which is currently the main source of funding, according to the report.
According to the auditors, there will be a gap in European funding between 2027 and 2028, which will have to be covered by the Baltic countries themselves.
Even if the countries manage to complete the first phase of the project until 2030, they say, the trains may not start running in 2031, as procurement could take eight years.
According to Macijauskas, if Rail Baltica is to be operational in 2030 or 2031, it is necessary to decide now whether the trains will be bought or rented, or whether the operators will have to use their own trains. According to the auditors, this decision has not yet been taken by the countries.
Moreover, the costs of purchasing, maintaining and operating the trains are not included in the project budget and cannot be financed with EU money.
According to the auditors, countries have still not taken several important decisions to make the new infrastructure operational until 2031.
“There is no decision setting out the roles, responsibilities and principles of governance of the railway, including how profits and losses will be shared, conflicts will be resolved, etc.,” the report says.
According to Lithuania’s Ministry of Transport and Communications, the entire Rail Baltica project connecting the Baltic countries to Europe is scheduled to be completed in 2030, while the connection between Lithuania and Poland is expected to be completed in 2028.
Rail Baltica will connect Tallinn, Perm, Riga, Panevezys, Kaunas, Vilnius and Warsaw. In Lithuania, the track will run 392 kilometres. (LRT)