2024-07-05 15:15:10
In 1991 – that is, 33 years ago – an idea appeared, which could be described by paraphrasing well-known lines of poetry: “I want to build the longest rails, I will not lack strength, I am not afraid of anything. Let the blizzard rage, let the north roar: to the track will move forward!”
Perhaps, at the beginning, someone knew why these rails were wanted, who needed all of them. It is also possible that he understood who was going to do what. Who will be the carrier, who will carry what and how far, and also why. Because there was something to bring! There were people, and there were also loads. Over time, the answers to these questions began to unravel and unravel. Why do you need rails if you can build terminals? Why go ahead, if it is more profitable to pour concrete right here on the spot? You don’t have to go far!
The State Audit Office (VK) has sought answers to these questions, together with Lithuanian and Estonian colleagues. After the publication of the SC’s conclusions, a peculiar process began in the political and official environment of Latvia, which could simply be called – acting as the most surprised ignorant person.
The adjacent visual shows – Rail Baltica the story began in the nineties, when the vision for the implementation of this project was born. After a few years, the vision began to turn into real decisions, more concrete visions and relatively detailed timelines. Importantly, in the course of this entire project, international cooperation memoranda have been concluded from time to time, decisions have been made (including financial sources) at the level of the European Union (EU). It’s all published as well Rail Baltica on the official website and quite clearly makes it clear that there is no basis for not knowing about the progress of the project, including complications and risks, at least for the current Minister of Transport and the Prime Minister, not to mention those involved in the project.
Shrugs in ignorance
To quote a frightened politician, the dry balance is now after Rail Baltica of the rapid increase in the scale of the scandal is as follows: two public scapegoats have been found – one civil servant and one terrified minister of transport. We deliberately do not call them by name (although it is quite certain that they are not without blame) because, in our understanding, it would be unfair to continue the rhetoric started by other politicians, especially those who have been closely associated with the operational affairs of the project for years, that they are to blame two, but all the rest of us “had no idea”. All the more so because alarm bells were rung ten years ago, five years ago, and two years ago about the project’s risks and problems. It was written about in the media, it was talked about more loudly or more quietly both among industry specialists and politicians. It seems that many (if not all) lived by the principle – if you don’t talk about a problem and pretend you don’t see it, then it doesn’t exist at all.
Irresponsible. However, politicians and officials continue to pretend that nothing extraordinary has happened, and not only ignore the threat of disaster, but are not even shy about trying to extract political dividends from it by organizing populist shows.
The situation is dramatic
So what is the situation at the moment? Anyone who has the desire and interest can get acquainted with a series of materials on the auditors’ conclusions on the website of the State Audit Office, which allows one to understand both the extent of the disaster and to get a good idea of those responsible.
Let’s quote only what was mentioned in the summary of the conclusion of the Supreme Court. And so – expected Rail Baltica project implementation costs have increased more than four times. According to the new draft cost-benefit analysis, Rail Baltica the expected costs of project development have increased from 5.8 to 23.8 billion euros in 2023 since 2017. This has increased the risk of securing timely funding, not only because the expected costs have increased, but also because the current EU funding period ends in 2027. As the next period starts in 2028, a funding shortfall in 2027-2028 is likely. for the year. In addition, it is not known whether the Connecting Europe Facility, which is the main source of funding for the project, will continue in the next funding period and what its budget or co-financing rate will be.
Thus, taking into account the new project budget in each country and the funds allocated so far, additional funds are needed to complete the project – 2.7 billion euros in Estonia, 7.6 billion euros in Latvia and 8.7 billion euros in Lithuania.
In order to reach the project deadline set by the EU regulation – 2030 – and to manage the increased costs, the Baltic States have decided to implement Rail Baltica project in two phases. The first phase of the project is expected to be completed in 2030, which is at least five years later than the original project schedule.
Rail Baltica will not be included in the scope of the first phase of the project. for example, regional stations that will be built later or with minimal functionality, some sections of the railway will be built with only one track instead of two tracks, etc. It will also help reduce the expected costs from 4 to 3.1 billion euros in Estonia, from 9.6 to 6.4 billion euros in Latvia and from 10.2 to 5.4 billion euros. euro in Lithuania until 2030. Thus, in the case of the implementation of the first phase of the project, the additional financing required for the entire project is 10.1 billion euros: 1.8 billion in Estonia, 4.4 billion in Latvia and 3.9 billion in Lithuania.
The second phase of the project will be implemented after trains start running on the railway (scheduled to start running in 2031). There is currently no schedule for the second round. In the joint audit of 2019, it was found that although the risks had been identified, assessed and their priorities determined, the risk management system that would link the entire project into one whole was still in the development stage.
The 2019 audit also found a lack of change management mechanisms at the entire project level. The aforementioned shortcomings still exist, although AS RB Rail has recently developed a new risk and change management procedure to improve the situation.
The findings of this investigation of the situation show that AS RB Rail and national project implementers’ risk management and change management for the entire project have not improved significantly since 2019, although an effective risk and change management system could help control cost escalation and, if necessary, allow rapid corrective action as needed. It was also found that governments and parliaments are not always informed of potential problems.
The only decision of the three Baltic states regarding infrastructure management is that each country will have a separate independent manager. However, Latvia still has only a temporary infrastructure manager. Although the implementers of the project – AS RB Rail and the national project implementers have developed an action plan to achieve operational readiness of the railway by 2030, there is no mechanism by which the project implementers could get the responsible ministries to make the necessary decisions faster.
It has been established that the ministries have not decided either on the train purchase model or on the institution that will be responsible for this task. If a decision is not taken soon, there is a risk that the 2030/2031 no trains will run on the new railway yet.
In addition, the costs of purchasing trains, as well as railway maintenance and operation, are not included in the project budget and cannot be financed from EU funds.
Namely, from the initial idea that we expressed in the poem, all that remains is: “I will neither lack strength, nor be afraid of anything”, which is good for learning money. The rest is lost. Why do you need rails? Why do you need stations? Who has cargo? What exactly will lead and what? That is why the question is whether Rail Baltica will the trains ever start running at all?
Who cares?
2024-07-05 15:15:10