bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 08.04.2020 | Name days: Dana, Dans, Danute, Edgars
LatviaLatvia

Audit: Rail Baltica slowed by poor risk management and slow progress with municipalities

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Rail Baltica, State Audit, Latvia, report, Transport MinistryDelays and cost increase of Rail Baltica project is heavily affected by no risk management and no strategy, as well as slow progress in cooperation with municipalities and passive alienation of properties, Latvian State Audit (VK) concluded in its latest report.

Two weeks ago VK warned about the facts uncovered in the joint Latvian, Estonian and Lithuanian audit institutions’ report – the biggest infrastructure project in the history of independent Baltic States worth at least EUR 5.78 billion is behind schedule and its costs only keep increasing. In this international joint audit effort VK evaluated the contribution of Latvian institutions towards the failure to maintain schedule, which will unavoidably lead to increased costs.

Over the course of the first five years of the project’s implementation Latvia has used only near a quarter of the five-year funding. On top of that, a number of necessary tasks are behind schedule by one to four years, VK has concluded.

VK’s conclusions are the most critical when it comes to extension of construction terms for Riga Central Railway Station hub, Riga International Airport’s railway station and railway lines in Latvia’s central parts from two to four years because of missed deadlines with technical projects.

«These serious deviations from the plan show that at the beginning of the project we had only an ambitious commitment and no actual ability to manage the project. The project represents a serious test for all sides involved in it, but I would rather Latvia does not become the weak link,» admits Latvian State Auditor Elita Krūmiņa.

So far, Rail Baltica project has not been effectively managed in Latvia. A number of facts point to negligence and reliance on «higher powers», VK states.

Transport Ministry is responsible for Rail Baltica project in Latvia. Since 2014 the ministry has delegated formation of Rail Baltica infrastructure to LLC Eiropas Dzelzceļa līnijas. VK notes that the ministry’s supervision over the project has been insufficient so far.

Up to 2016 not a single Transport Ministry’s employee has had any direct duties in relation to the project’s supervision. In the two years that followed only one ministry worker was responsible for the project’s supervision. The four workers of a structural unit formed in 2018 basically worked on their own because there were no project management order and rules ready then. In 2017 the ministry’s high-rank coordination work group consisting of representatives from the ministry, LLC Eiropas Dzelzceļa līnijas and AS RB Rail met only four times, and the last meeting took place a year and a half ago, VK notes.

More on the topic: Rail Baltica employees: the project is in critical state due to poor management

«So far Transport Ministry and LLC Eiropas Dzelzceļa līnijas have not been able to agree on the project’s costs worth approximately EUR 170 000 in relation to the project’s general expenditures. Additionally, Transport Ministry’s developed mechanism for prevention of unrelated costs does not work,» VK concluded.

«Cooperation with municipalities, especially Riga City Council, has been neither regular nor sufficient. Sustainable Development Consultative Coordination Council, though composed, has convened only two times, and the last time was one and half-years ago,» explains VK.

Actual alienation of real estate properties has not even begun in Latvia

The pre-condition for design work completion and commencement of construction work is alienation of real estate property within the project’s territory. Rail Baltica project will affect at least 1 623 real estate properties, including 1 179 real estate properties owned by private and legal persons. Alienation of real estate properties in Latvia’s central territories was supposed to have had finished by the end of 2019. However, not a single previously initiated real estate alienation process had been completed by October 2019, leaving 97% of the process unfinished.

Delays with real estate alienation has also negatively affected other important tasks, such as development of the construction project’s guidelines by RB Rail, as well as measurement of the railway line’s  location and submission of amendment of related regulations for review to the government, VK explains.

For comparison – in Estonia the real estate alienation process’s completion had reached 26% by the end of 2018.

«The risk of Latvia failing to meet terms outlined in European Commission’s decision for co-financing of the project increases with each passing day,» VK warns.

VK believes there is no excuse for delays – real estate property alienation process is complicated, yes, but so far the progress of legislative amendments pushed by the ministry itself has been inexcusably slow.

Projects of Rail Baltica’s scale cannot be implemented without proper risk management

Neither Transport Ministry nor LLC Eiropas Dzelzceļa līnijas have seriously considered introducing an efficient risk-management mechanism, which is unacceptable for a project of such a scale, VK concludes.

«Effective management of such mechanisms also serves as an early-warning system that lets the government add timely corrections and reduce risks. For example, this is where amendments to regulations are needed – to speed up the alienation process. This problem was previously identified in the Transport Development Guidelines 2014-2020; LLC Eiropas Dzelzceļa līnijas also considers this a risk,» VK notes.

Read also: Estonia’s prime minister: Rail Baltica project unlikely to be finished on time

VK invites putting in practice actual risk assessment on the ministry’s level and prevent risk management problems observed at LLC Eiropas Dzelzceļa līnijas, improve overall project discipline and reduce increase of costs.

VK also intends to ask the Cabinet of Ministers to support Transport Ministry more intensely in the real estate alienation process, as well as ask the government form a system for supervision over strategically important projects and take over responsible ministry’s functions if need be.


Leave a reply

  1. Zerry says:

    Is this s surprise to someone? It could be good also to open a little more from where comes delays with municipalities? Someone asking pocket money?
    Anyway, architects have made a great job for nice presentations, but who will finsnce Riga central station and airport changes? Never told, or?

Inflation in Republic of Latvia reportedly at 1.4% in March

Compared to March 2019, the average level of consumer prices rose by 1.4 % in March 2020. Prices of goods have increased by 0.9 % and prices of services by 2.7 %.

Lithuania’s BC chief: «Latvia’s COVID-19 support for business has been swifter»

It is official: Lithuania is extending lockdown until April 27 to combat the coronavirus pandemic which death toll in the country stood at 15 as of Wednesday noon. As many as 912 persons were diagnosed with COVID-19 by then.

Lithuania on path to allow price regulation in government

In Lithuania, the majority of legislators in the Seimas, have backed draft amendments that set forth allowing the government to regulate the prices of essential goods during this time of quarantine, Lithuanian public broadcaster LRT reports.

BNN EXPLAINS | Envelope wages – one of the main reasons why idleness benefits may be denied

People need certainty – if they honestly pay taxes, they should be able to receive support from the state in the event of a crisis, since they have taken care of the state all this time by paying taxes, BNN was told in a phone conversation by chairman of LBAS Egils Baldzēns.

Criminal process launched against Aivars Lembergs for defamation

On 7 April 2020 State Police Kurzeme RP Saldus Department’s Criminal Police Office commenced a criminal process against Aivars Lembergs for untrue statements and claims he has used on multiple occasions during meetings of Ventspils City Council and Finance Committee against city council deputy Ģirts Valdis Kristovskis, as BNN was told by Kristovskis.

Latvia’s Prime Minister: we are financially well-situated in this crisis

We are financially well-situated in this crisis, said Latvia’s Prime Minister Krišjānis Kariņš in an interview to LTV programme Rīta panorama.

Latvian government supports dismissal of State Land Service’s director general

Latvia’s Cabinet of Ministers has supported Justice Ministry’s prepared decision project that details the dismissal of the State Land Service director general Solvitai Zvidriņa from her post, as confirmed by Justice Ministry.

China lifts lockdown in Wuhan

In the Chinese city of Wuhan, where the global pandemic of COVID-19 began, a lockdown has been lifted for the first time since January, British news portal The Guardian reports.

Support in Latvia for COVID-19 crisis prevention reaches four billion euros

The volume of support available in Latvia to finance preventive measures to overcome COVID-19 crisis has reached four billion euros, as reported by Latvian Finance Minister Jānis Reirs on Tuesday, 7 April.

Another month stuck home. Latvian government extends state of emergency

The state of emergency declared in Latvia because of COVID-19 pandemic has been extended until 12 May, as confirmed by Foreign Affairs Minister Edgars Rinkēvičs on social media on 7 April.

75 reports on competition distortions reported to Competition Council in 2019

Last year, the Competition Council received a total of 75 reports related to competition distortions caused by public persons, according to information listed in the latest public account for the institution’s more significant accomplishments in 2019 and developments in competition rights enforcement in Latvia.

Australia quashes child abuse convictions against cardinal Pell

A court in Australia has overturned child sex abuse convictions against cardinal George Pell after he was found guilty and received a prison term, British news portal The Guardian reports.

Education and Science Ministry considers not cancelling centralized exams

Latvia’s Education and Science Ministry considers the option to not cancel centralized exams, especially for 12th graders, as reported on Tuesday, 7 April, by Education Minister Ilga Šuplinska during a meeting with Saeima’s Education, Culture and Science Committee.

Estonian government in two minds on cutting public spending to help economy

Should public spending be cut to help restore the economy? Two of the three parties in the Estonian government have opposing views on this as economic recovery is increasingly discussed, Estonian public broadcaster ERR reports.

Riga International Airport plans to lay off 500 employees

Because of consequences caused by COVID-19, Riga International Airport plans to lay off 500 employees, as BNN was informed by the company.

Poland planning to hold presidential election as postal ballot

The Polish presidential election in May should be held as a postal ballot, the country’s legislators have decided. Opponents of the idea argue that this means putting public health at risk, British-Canadian news agency Reuters reports.

COVID-19 update in Baltics. 548 infected in Latvia, 880 in Lithuania, 1 149 in Estonia

The total number of confirmed coronavirus COVID-19 infection cases in Latvia has reached 548, increasing by six in the past day.

Latvian president urges not to sort idleness benefit recipients based on tax debts

When assessing whether or not a company meets requirements for idleness benefit eligibility, Latvia’s President Egils Levits urges the government to not sort them based on tax debts.

British PM Johnson treated from COVID-19 in intensive care

British Prime Minister Boris Johnson has been moved to intensive care in London with his COVID-19 symptoms worsening as the outbreak is claiming more lives in the United Kingdom, British news portal The Guardian reports.

Riga City Council snap elections pushed back to 5 September

The ruling coalition in Latvia has agreed to push back Riga City Council snap elections to 5 September, as journalists were told by politicians after a meeting of ruling parties on Monday, 6 April.

US death toll of COVID-19 nears 11 000

The US, which is the country with the highest number of confirmed COVID-19 infections, has on Tuesday, April 7, reached a total number of COVID-19-related deaths of 10 986, according to the US John Hopkins University and German public broadcaster DW.

Prime Minister says Latvia will neither enhance nor relieve restrictions

We do not plan to enhance restrictive measures, but neither do we plan to relieve restrictions – the storm is not over. Nevertheless, we are on the correct path, said Latvian Prime Minister Krišjānis Kariņš in an interview to Latvijas Radio.

Spanish coronavirus death toll drops for fourth day in a row

In Spain, for the fourth day a row, the number of COVID-19 related deaths per day has decreased as the country has the most confirmed cases in infection in Europa, BBC reports.

Recovery from COVID-19 confirmed for 16 people in Latvia

So far 16 people in Latvia have made a successful recovery from COVID-19, as reported by Latvian Disease Prevention and Monitoring Centre (SPKC) Infectious Diseases Risk Analysis and Prevention Department director Jurijs Perevoščikovs at a press-conference on Monday, 6 April.

Kilometre-long freight train from China to pass through Latvia this week

This week a freight train pulling 100 containers forming a kilometre-long chain will pass through Latvia on its way from China to Kaliningrad Oblast, as BNN was told by Latvian Railway.


Do NOT follow this link or you will be banned from the site!