EDzL terminates the contract with the designer of “Rail Baltica” regional mobility points “Rere Ineco”

SIA “Eiropas dzelčas lījas” (EDzL), which is responsible for the construction of the railway project “Rail Baltica” on the territory of Latvia, is terminating the contract with the construction designer of the regional mobility points of “Rail Baltica” – the association of Latvian and Spanish companies “Rere Ineco”, the representatives of EDzL informed the agency LETA.

EDzL states that the termination of the contract is related to the insolvency of one member of the company association and the unwillingness of the other to take over the obligations.

The company states that after an open international tender in November 2022, the construction design of the regional mobility points of “Rail Baltica” was entrusted to the association of individuals “Rere Ineco”, which consists of SIA “Apex Building” (formerly “Rere vide”) and the Spanish company “Ineco”, for 3.6 million euros.

On March 14, 2024, the Riga District Court declared “Apex Building” insolvent. According to the representatives of EDzL, in such cases the contract allowed to renew it and entrust all the works provided for in the contract to the other member of the association, but “Ineco” did not undertake these obligations.

EDzL is currently evaluating several scenarios for further actions to continue the design of regional mobility points.

So far, construction projects of 17 “Rail Baltica” regional mobility points have been developed in the minimum composition, construction permits and technical regulations have been received from the parties involved, including the necessary engineering studies and development of a full-fledged construction project for 11 stations, informs EDzL.

Data from the State Revenue Service (SRS) show that “Apex Building” had a tax debt of 378,108 euros on April 23 of this year.

In 2021, “Apex Building” worked with a turnover of 17.636 million euros and suffered a loss of 247,354 euros. The company’s financial data for 2022 and 2023 have not yet been made public, according to “Firmas.lv” information. The sole owner of the company since October 2023 is Deniss Kikots, while before that the sole owner of the company was “ReRe group”.

LETA already announced that the “Rail Baltica” project, in which problems with meeting deadlines and obtaining funding have recently come to light, envisages the creation of a European standard gauge railway line from Tallinn to the border of Lithuania and Poland, so that it would be possible to connect the Baltic states with other countries by rail. European countries. In the Baltic States, it is planned to build a new 870-kilometer long European railway line with a gauge of 1,435 millimeters with a maximum train speed of 240 kilometers per hour.

Initially, it was expected that the costs of “Rail Baltica” would reach 5.8 billion euros, but the parties involved have repeatedly stated that they have significantly increased. Part of the costs will be covered by the funds of the European Union. The railway line “Rail Baltica” is planned to be opened sequentially in stages between 2028 and 2030.

In last year’s activity report, the State Security Service (VDD) emphasized that, despite the existing complications, further delays in the construction of the “Rail Baltica” infrastructure are unacceptable and that the project requires targeted risk management.

It was also reported that EDzL’s turnover last year, according to preliminary data, was 6.398 million euros, which is 64% more than in 2022, while the company’s losses increased to 195,783 euros.

EDzL is a capital company fully owned by the state, and its share capital is 4.445 million euros.