📋 Tender Overview
On Monday, January 19, the European Court of Auditors published an updated 2020 report on European Union transport megaprojects. It evaluates eight important infrastructure projects in thirteen EU member states, including Rail Baltica. The Court of Auditors emphasizes that large-scale TEN-T projects require a clearly defined implementation period and stable, predictable financing to ensure the achievement of the set goals. In this context, the successful implementation of Rail Baltica Phase I until 2030 is still directly dependent on the availability of sufficient EU funding in the next Multiannual Financial Framework (MFS) 2028-2034. for the year. The audit conclusions reflect previously identified project risks RB Rail has familiarized itself with the conclusions of the European Court of Auditors and agrees with them, as they are consistent with the risks that the project implementers have previously identified, analyzed and publicly explained. The Audit Chamber states that Rail Balticas total estimated costs for the full scope of the project have increased to EUR 23.8 billion (in 2023 prices), compared to the initial official estimate of EUR 5.8 billion (in 2017 prices) and the risk-adjusted estimate of EUR 7 billion, which was included in the Audit Chambers 2020 report. In general, the increase in costs is mainly explained by the limited detailing of the early estimates and their gradual refinement during the development of the project, including the refinement of design solutions and scope. These conclusions also correspond to the results of the joint audit conducted in 2024 by the supreme audit institutions of Estonia, Latvia and Lithuania. Initial cost estimates were based on preliminary value engineering assumptions, which were superseded by significantly more accurate estimates as the project reached the main engineering design stage. The increase in costs was additionally influenced by the expansion of the scope of the project, the updated technical, security and military mobility requirements, as well as significant external factors - including approximately 40% cumulative inflation in the Baltic States in the period from 2017 to 2023, the increase in the prices of construction and energy resources, disruption of supply chains and the impact of Russias war against Ukraine. Rail Baltica faces challenges typical of European mega-projects The European Court of Auditors states that large European infrastructure projects are on average more than ten years behind the originally planned schedule. In this context, Rail Balticas current delay of approximately four years is still within the limits typical for projects of this scale and complexity. Rail Baltica is a large-scale and complex project that is implemented simultaneously in three countries as a completely new European standard railway infrastructure, rather than a modernization of the existing infrastructure. The project envisages the introduction of uniform technical, security and interoperability standards, as well as an unusually large number of cross-border connections and parties involved. Its geographical and geopolitical context - close to the EUs eastern border and an active war zone - has exacerbated the impact of inflation, rising energy prices, supply chain volatility and security requirements compared to many other TEN-T projects. Significant progress in project implementation Large-scale construction works are underway in all three Baltic countries. In Estonia, approximately 202 km of the 213 km long main line have been signed construction contracts, and more than 100 km are already under active construction. In Latvia, full-scale works are taking place in the priority southern section, where approximately 30-35 kilometers have been handed over to the construction contractor, while construction work continues at Riga Central Station and Riga Airport. Rail laying has started in Lithuania, and 114 km of main tracks are currently under construction. Financing perspective and risk mitigation When it comes to the risks of cost increase, it is important to emphasize that the availability of sufficient and timely financing is one of the main prerequisites for the implementation of the project within the specified deadlines. Currently, Rail Balticas first-round activities are implemented strictly within the framework of available funding, without taking on financial obligations that would not be fully covered by funding coverage. In order to ensure the continuity of the project and reduce the risk of further cost increases, it is essential to guarantee sufficient, stable and predictable funding from the Connecting Europe Facility (CEF) in the next Multiannual Financial Framework 2028-2034. for the year. Long-term financial support at the EU level is crucial in order to maintain the pace of project implementation, ensure coordinated cross-border implementation and fully realize the strategic importance of Rail Baltica in the current geopolitical context - as a significant investment in European security, resilience and long-term integration. The text of the report is available here.
