Because it is now certain that the company responsible for the realization of Pasažieru vilciens initiated diesel train modernization project – DMU vilcieni – has failed to comply with deadlines listed in the contract, PV has begun developing alternative scenarios that will be submitted to Transport Minister, explains PV.
De Facto programme of LTV had previously reported that PV would not receive the diesel trains, which cost EUR 22 million to modernize. This could mean the loss of EUR 13 million provided by the EU Cohesion Fund as well.
Two years have passed since PV signed the contract for the modernization of diesel trains for EUR 22 million. The first train should have been ready by February 2015. By now, Latvian passengers should have been provided with all six modernized diesel trains. Unfortunately, there are none.
The first of the modernized trains has begun its certification process in order to be approved for passenger transfer. Inspections are necessary for five other diesel trains, of which only some have been modernized. With that, DMU Vilcieni requires more time to finish its work. «If we could slightly increase the certification volume, everyone would have more confidence about safety. Either this or finishing the project in the first quarter of the next year,» – promises RVR Chairman Gatis Kamaruts.
Because of the delay in the project’s realization, PV will now have to look for EUR 13 million elsewhere. Latvian Finance Ministry will divide up the money provided by EU Cohesion fun for some other project. Lately ministry officials have been reluctant to comment on whether or not the EUR 13 million have been lost. Because the company responsible for the project’s realization has already been paid more than EUR 8 million in advance payments, officials hope it will be possible to recover part of this amount from EU funds. TM state secretary Kaspars Ozolins notes that «PV management has been ordered to assess technical, economic, legal and financial aspects of organizing work to ensure the rest of the money provided to the project can be salvaged, because, as we can see, half of the work has been completed and the other had has not.»
According to the contract, DMU vilcieni is to be held accountable for the progress of the project’s realization. Penalties for not delivering the first modernized diesel train have been adding since February. The maximum amount has already been reached – 10% of the contract’s sum (approximately EUR 2.2 million). It is possible that the company may have to pay the lost EU funding. This means penalties could potentially reach even EUR 15.2 million.
RVR Chairman Kamaruts says: «We are businessmen. And we have already invested more than EUR 20 million into this project. We are not prepared to simply give money to anyone. Why? Because no one gave us any money just like that. Most of this money was attracted from third parties, and this money has to be given back. If we gift the trains and receive no money in return, it is likely that all three companies involved in the project will have to ho insolvent».
According to Kamaruts, the modernization project has been delayed because German Voith Company failed to supply the necessary technology on time. Nevertheless, the situation has normalized – the technology has been supplied and there is no reason to believe Latvia could lose EU funding in this project.