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Ex-minister: «good deed champions» buy trains first and think how to use them later

Anrijs Matīss/flickr.com
AS Pasažieru vilciens wants to purchase 32 new electric trains for a price of EUR 225,303,262. This amount three times exceeds the amount Estonia paid for its electric trains. «The problem in Latvia’s case is not just with the state overpaying but also with good deed champions wanting to buy trains first and think about their use later. There is no clarity in regards to use of those trains and railway infrastructure’s readiness,» BNN was told by ex-Transport Minister of Latvia Anrijs Matīss.

The ex-minister said Latvia earned new trains a long time ago. However, procurements organized so far have been too vague. This created concerns regarding quality criteria.
 

«It is unclear how those trains will work: will the new network be used for them? How will the purchase of trains synergize with railway electrification?» said Matīss.
 

He believes it remains unclear which routes those trains will be sent on. «Nothing has been said about one or the other [direction], Saulkrasti or Jurmala – nothing about changing existing standards. In Krustpils’ direction, where electric train will be sent, there will be a different standard. Will we have two different standards? Will the train course in both directions? Additionally, nothing is known about synergy with railway electrification project.»
 

Matīss believes AS Pasažieru vilciens’ mistake was not aligning the train procurement with platform change – «if they are not changed and reconstructed, it will be hard for people to board the new trains»!
 

As a positive example he mentioned Estonia, where platforms were built to accommodate new trains.
 

In Latvia, on the other hand, he says there is no clear answer to conclude platforms will be restored with new trains in mind. «It is important to know the height of new platforms or if it is planned to install lifts or other solutions,» he said. The ex-minister says 20 railway platforms were reconstructed during his time in Transport Ministry. 20 is a small portion of all platforms. With that, it is important to keep in mind that reconstruction of all of them would be very expensive. «Only then it there is any point in discussing new trains – we need a unified standard. It is important to sort out existing infrastructure and only then procure trains,» says Matīss.
 

The former minister also says that Prime Minister Māris Kučinskis had accused him of PV’s failed procurement when Matīss was a minister.
 

«In the time when I was Transport Minister of Latvia, Estonia bought 18 electric trains and 20 diesel trains for EUR 79.8 million. In 2014, Pasažieru vilciens organized a procurement project for 32 trains. The offered price was EUR 150 million – two times more than what Estonia had paid for its trains. This is why that particular procurement was halted – I concluded we would overpay considerably with that kind of price.»
 

«Four years later – 2018. PV organizes another procurement project for 32 trains with a total price of EUR 225.3 million. I think it’s clear to everyone, even with all the service costs and spare parts included, that we would have paid three times more than Estonia. It is no surprise several participating companies had appealed it, saying they would provide a cheaper service.»
 

Matīss stresses that concerns regarding the procurement appear mainly because of the lack of clarity in regards to the reasons why prices in Latvia considerably exceed what the neighbouring country had paid for a similar offer.
 

When asked why he believes all previous procurements have met failures and that the next one will be Latvia’s third attempt, Matīss said: «We want too much. We want a service centre, we want spare parts, we want a 30-year warranty, etc. At the end of the day, Latvian taxpayers are the ones who will have to foot the bill. Currently we pay EUR 35 million a year on maintenance of infrastructure used by PV. In 30 years or so this amount accounts for one billion. Even this procurement, if it’s artificially made more expensive, will cut in every resident’s wallet – money doesn’t grow on trees, after all».
 

It is worth mentioning that Czech train manufacturer Škoda Vagonka has turned to the Procurement Monitoring Bureau with a complaint regarding possible violations during PV’s organized talks procedure for the train procurement process. The company believes the company that won in the procurement – Spanish company Talgo – does not have sufficient experience and qualifications for the project. On top of that, Škoda Vagonka believes the proposed costs are too high for the Spanish company to have won.
 

Four contenders competed for the rights to supply 32 new electric trains – the aforementioned Talgo and Škoda Vagonka, as well as Swiss Stadler’s subsidiary in Poland and Spanish Construcciones y Auxiliar de Ferrocarriles.
 

This was Latvia’s third attempt to purchase new trains. CAF and Stadler took part in the first, but results were cancelled because of the litigation commenced by Stadler. The second attempt included participation from Hyundai Rotem and Stadler. Hyundai’s price offer was better. Unfortunately, the company had to withdraw from the procurement due to technical reasons. Then the Transport Minister Anrijs Matīss explained that Latvia cannot afford to purchase trains from Stadler. Ultimately, PV did not sign a contract.
 

Matīss does believe Latvia needs new trains, because the country has paid too much for repairs of old ones – «if you get an expensive repair job, you can extend a train’s service, but this ultimately causes repairs to cost more than the train, which is not economical in the long run. We just end up investing in scrap metal, and overpaying at that. Without a doubt – we need new trains.»
 

He believes Procurement Monitoring Bureau should go through all complaints regarding Latvia overpaying for trains. He stresses this procurement has been taking too long in Latvia.
 

Matīss believes «Latvia should follow Estonia’s example – they did it in 2013 and for much cheaper». «Everything is fine for them, the number of passengers has doubled because they have convenient trains, platforms, traffic and regular schedule. This would be possible for Latvia, too, but only if everything was organized appropriately.»

Simona Sjadite

BNN

19-12-2018
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