The Baltic States must urgently agree on a clear financing model for the joint venture AS RB Rail, otherwise the oversight of the Rail Baltica project is at risk, company CEO Marko Kivila and CFO Ojars Daugavietis has told LETA in an interview.
Kivila emphasized that this year the company’s budget had essentially not changed, but since the start of construction of the Rail Baltica main line, EU funding was primarily directed to construction works, while the Baltic States increasingly needed to cover project management and coordination costs. To reduce expenses, RB Rail has halted new hiring and postponed a large share of work to 2026, but this has not solved the issue.
“Currently, there is a shortfall of about 900,000 euros that the Latvian government still needs to contribute in 2025. We hope that, in cooperation with the Ministry of Transport, this time our needs will be included in the real 2026 budget, because last time the problem was that the needs were much greater than could be covered until end-of-year budget reallocations,” Kivila said.
Daugavietis added that the current financing agreement expired this year, and therefore the three Baltic States must sign a new one until the end of the year, clearly stipulating how and for what purposes the joint venture would receive funding.
“For example, the states must co-finance the joint venture’s operations, as foreseen in the grant agreement with the European Commission. These technical details must be agreed upon by year’s end so that we can continue our work,” the CFO noted.
He stressed that every year there was uncertainty about how much funding RB Rail would receive and what the costs would be.
The company has therefore suggested that the three states agree on a fixed annual amount.
“For example, each state contributes “x” million per year for project management, and we live within that. Additional support could come from the Connecting Europe Facility (CEF) or from projects specific to one country,” Daugavietis said.
Kivila warned that cutting back project management created risks: “If oversight is reduced, there’s a real chance that EU funds will be misused, because no one will properly track how the railway line is technically being built. That means money could simply be lost.”
According to RB Rail, the first stage of the project could cost 14.3 billion euros in the Baltic States, of which 5.5 billion euros would be in Latvia.
Potential savings of up to 500 million euros could be achieved through technical optimization and other adjustments. Overall costs, based on the latest cost-benefit analysis, could reach 23.8 billion euros, compared to the 5.8 billion euros initially estimated in 2017.
Rail Baltica aims to build an 870 km European standard-gauge railway line from Tallinn to the Lithuania-Poland border, enabling passenger train speeds of up to 240 km/h and fully integrating the Baltics into the EU transport network. (BNN)