Baltic governments and parliaments have not always been informed about Rail Baltica project's problems - report

RIGA - The governments and parliaments of the Baltic states have not been always informed about the Rail Baltica project's problems, the supreme audit institutions of Estonia, Latvia and Lithuania find in a joint report.

The Latvian State Audit Office says in the report that since the scope and costs of the Rail Baltica project have significantly increased, the project is falling behind the schedule and the  time has come to take important decision on its management, it is essential that this information is communicated to the countries' governments and parliaments, which must take these decisions regularly and in a timely manner.

While in Estonia the government has been informed of the project's budget increase, delays and the project's splitting into two phases, this is not the case elsewhere.

According to the State Audit Office, in Latvia the Rail Baltica issue has been on the government's agenda, as the government approves activities in each Connecting Europe Facility and Military Mobility application, but the government has not been properly involved in approving changes to the scope of the project, such as the inclusion of regional train stations in the project.

Meanwhile, in Lithuania, reporting to the government takes place through a monthly progress report and special meetings on specific issues. For strategic project issues, these are presented to the government's strategic project portfolio committee. However, changes in the project's cost estimates and division in phases have not been formally presented to either the government or parliament by May 2024 and no decision has been taken on this matter.

The audit office underlines that while in Estonia and Lithuania lawmakers are regularly updated on the Rail Baltica project's progress, in Latvia the topic has been discussed only once between 2021 and 2023.

As reported, at the end of 2023, the auditors-general of Latvia, Lithuania and Estonia signed an agreement of cooperation to examine significant aspects and issues of the Rail Baltica railway project's implementation and financing. 

The audit found a deficit of EUR 10-19 billion in the Rail Baltica project's budget. 

According to the State Audit Office, since 2017, costs for Estonia have increased from EUR 1.35 billion to EUR 4.03 billion, for Latvia - from EUR 1.97 billion to EUR 9.59 billion, while for Lithuania - from EUR 2.47 billion to EUR 10.23 billion.

The auditors also indicated that the Rail Baltica project was at least five years behind schedule. 

Rail Baltica was originally expected to cost EUR 5.8 billion, but stakeholders have repeatedly said that the cost has increased significantly. Part of the cost will be covered by European Union funds. Rail Baltica is planned to open in phases between 2028 and 2030.

It has also been reported that the cost of the first stage of the international Rail Baltica project in the Baltics could reach EUR 15.3 billion, of which EUR 6.4 billion for Latvia, while the total project cost in the Baltics could reach EUR 23.8 billion, Csaba Bakos, a representative of the Boston Consulting Group, a cost-benefit analyst, told reporters on Monday.

A previous cost-benefit analysis in 2017 estimated the total cost of the project at EUR 5.8 billion.