Overpriced bids submitted to Rail Baltic design procurement

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How the future Rail Baltic train may look. Source: RB

The bids submitted to the design procurement of Rail Baltic have been overpriced, resulting in failed tenders, according to Tõnu Grünberg, CEO of Rail Baltic Estonia, Postimees reports.

Rail Baltic's biggest challenge is at present completing the design of the main railway corridor and subsequently acquiring the relevant properties. All objects are currently being designed, the first of them has been completed and procurements for the remaining 14 objects - seven viaducts and seven ecoducts - are underway, Minister of Economic Affairs and Infrastructure Taavi Aas (Center) said at an extraordinary video sitting of the economic affairs committee of the parliament convened for discussing a mid-term report on Rail Baltic.

The main designs for the Pärnu and Ülemiste passenger terminals should be completed this summer. Completing the design of the main railway corridor is the priority, followed by the acquisition of lands, according to Aas. Construction procurements have proceeded according to plan and the state has received better prices than expected. While savings have been achieved in construction procurements, the state has had less luck with design procurements.

"We recently carried out procurement for the design of local train stops and did not receive any reasonable bids, they were all very overpriced," Grünberg said.

Receiving reasonable design tenders has also been difficult previously.

"All we can do is announce a repeat procurement and hope it'll provide better results," Grünberg said.

Rail Baltic's designs need to be completed within the next few years, together with the drawing up of designs for local stops and detailed plans. The latter two stages are planned to be carried out separately.

Until designs remain unfinished, lands cannot be acquired. Grünberg said that the acquisition of lands is underway in locations where the establishment of the rail corridor is certain and will not be subject to any more changes.

The acquisition of around one-third of lands under the rail corridor has been set in motion. Most of them are privately owned properties while some are in municipal and some in public ownership. 165 private properties have been acquired thus far.

Grünberg said that the land acquisition process has proceeded reasonably thus far and only in a limited number of cases have the properties been expropriated. The construction of the main corridor is planned to start next year.

Chairman of the economic affairs committee of the parliament Kristen Michal (Reform) said that it is important that the implementation of Rail Baltic in Estonia should stick to the agreed time frame that takes into consideration the financing agreement signed as a result of the Connecting Europe Facility's (CEF) application round of 2014 and the amendments to the timetable approved in late 2019.

Altogether five CEF financing agreements have been signed in the three Baltic states, in addition to support from the European recovery fund, Rail Baltic coordinator Kristjan Kaunissaare said. Financing from the Structural Funds is planned to be used for the Parnu passenger terminal.

Grünberg said that the situation of the project is at present very good; however, the said funds will not be sufficient for carrying out the entire project, thus funding needs to be sought also from the next budget period.

Ahti Kuningas, deputy secretary general for transport at the Ministry of Economic Affairs and Communications, said that the ministry does not yet know the total cost of the project as the prices of materials are unpredictable. Estonia needs an estimated €200 million, Latvia €500 million and Lithuania even more on top of the funding that has already been made available.

"It all depends on how we proceed with the design and construction works as funding is redistributed at the end of each budget period," Kuningas said. "Those who make more progress, get more money and those who don't will lose theirs. We don't know how much money will be redistributed, but we presume that the sum should cover our needs," he added.

The first train ride should take place on the Rail Baltic corridor in five years. It is too soon to say, however, whether or not this will be a domestic route only and which railway companies will operate it. The European Commission expects for the entire project to be completed by 2030.

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Editor: Helen Wright

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