Rail Baltica main line more than twice as expensive in Latvia than in Estonia
Latvia has signed a contract with E.R.B. Rail JV, the consortium building Rail Baltica's main line, under which the cost of constructing one kilometer of railway will be more than twice as high as in Estonia and 50 percent higher than in Lithuania.
RB Rail compared the unit costs of embankment construction work under main line construction contracts in Latvia, Lithuania and Estonia to obtain comparable figures, RB Rail CEO Matīss Paegle told Latvia's public broadcaster LSM. The data showed that for the Misa–Latvia border section (DS4), located south of Riga, the cost is approximately €16.3 million per kilometer — 2.3 times higher than Estonia's normalized figure and about 66 percent higher than in Lithuania.
"It is clear that the unit prices for gravel, soil and other foundation materials in the contract signed by Latvia are very high and the state cannot afford it," Paegle said.
Latvia, which has acknowledged a shortage of funding, must now decide how to proceed, he stressed. The first option would involve creating a new design for the southern section of the main line, a process that would take about two years. Redesigning the section would cost around €8 million but could potentially save €100–200 million.
"At the same time, launching a new procurement two to three years from now does not guarantee that, due to inflation, we will not receive an even higher bid," Paegle noted.
The second option, in his view, is to sit down with E.R.B. Rail JV, the consortium building the main line, and ask why the prices of materials such as gravel, crushed stone and others are so disproportionately high compared with neighboring countries. He said it would be necessary to agree on a reasonable reduction in unit prices, which could deliver similar or even greater savings.
A review prepared by Latvia's Ministry of Transport and noted by the government on May 26 said that Latvia has €603 million available for main line construction works out of a total budget of just under €700 million, which also includes construction supervision and project management.
With that funding, it is currently possible to build 52.66 kilometers of the main line embankment. This means the construction of the main line embankment costs approximately €11.45 million per kilometer. Additional costs would include the installation of tracks and control systems as well as the construction of stations.
Eiropas Dzelzceļa līnijas (EDzL), the Latvian state-owned company responsible for Rail Baltica construction in Latvia, and the E.R.B. Rail JV consortium signed the Rail Baltica main line construction contract in December 2023. E.R.B. Rail JV, which won the international tender, consists of France's Eiffage Génie Civil, Poland's Budimex and Italy's Rizzani de Eccher.
The main line construction works cover the construction of Rail Baltica outside Riga's city limits. The contractor is responsible for delivering the main line infrastructure along an approximately 200-kilometer section, including earthworks and track infrastructure, land preparation, embankments, railway bridges, roads, tunnels, viaducts, the relocation of utility networks and the installation of tracks and ballast.
Estonia, Latvia and Lithuania have committed to completing Rail Baltica by 2030.
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Editor: Mait Ots, Marcus Turovski
