NATO Ally's High-Speed Rail Project Faces Major Hurdles
Latvia is unlikely to complete its portion of the Rail Baltica high-speed rail project by 2030, the deadline agreed with its neighbors, Estonia and Lithuania.
The Rail Baltica project, designed to link the Baltic capitals with a European-gauge railway from Tallinn to Warsaw, has become all the more important due to the war between Russia and Ukraine, but the delay means that Latvia's share of the project may not be completed before 2035.
Rail Baltica was initially designed to enhance economic integration with the rest of Eastern Europe, but the escalation of the war in Ukraine means that the three Baltic States, all of which border Russia, have leaned further into their NATO membership. Rail Baltica now has military ramifications rather than just economic ones.
The overall cost of Rail Baltica could exceed its initial estimates by as much as €19 billion (about $21 billion), meaning substantial additional national funding beyond what the European Union will provide will be needed to finish, according to a joint audit from Lithuanian, Latvian and Estonian officials.
Latvia alone may need €7.6 billion ($8.5 billion) more than originally planned to complete its segment. The EU has already pledged over €50 billion ($56 billion) to the project, but so far, the member states have been responsible for timely delivery and co-financing.
Latvia's Saeima Rail Baltica inquiry chair, Andris Kulbergs, said the realistic completion date for Latvia's segment could now be as late as 2035.
"It will take at least seven to eight years to reach Salaspils, so 2035 is the earliest we can realistically expect to reach the Estonian border," Kulbergs said during a meeting in Tallinn.
Estonia, by contrast, is pressing ahead with its part of the project and has already begun procurement for new trains expected to run from Tallinn to the Latvian border by 2030.
Andris Kulbergs, chair of the Latvian Saeima's Rail Baltica inquiry committee: "We have a contract. All three of us—Estonia, Latvia and Lithuania —are in the same boat. If one of us fails, we all share the cost. The penalties must be paid even on another country's behalf."
Auditor General Mindaugas Macijauskas, in a report: "The project will not be completed by 2025 as planned.
"Not only is the five-year delay in the project's implementation is a cause for concern, but also the more than four-fold increase in its budget, which will require an additional almost 9 billion euros to implement the planned works in Lithuania."
Without immediate resolution on national financing and cost reforms, Latvia's participation in the early phases of Rail Baltica may be further delayed or scaled back. The Baltic States must submit final technical and financial planning updates by the end of 2025.
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