Rail Baltic Ülemiste terminal procurement stalls
The failure to find a suitable bidder for a €176-million construction tender to build the northernmost terminal of the planned Rail Baltica high-speed rail link has cast doubt on the projects viability in its current format.
Henrik Hololei, head of the European Commission's Directorate-General for Mobility and Transport, has cast doubt on whether Ülemiste requires a terminal of the planned size and expense.
Holohei said: "The Connecting Europe Facility primarily finances what is needed to ensure that the rail traffic connections are in place from a technical perspective and, naturally, the base element integral to the construction of the terminal. That the terminal has become so expensive, is down to the Estonian state's own choice."
"Different types of terminals can be constructed. You could put up the most beautiful terminal in the world, such as today's, in the opinion of many, Antwerp train station , but then you can have the Baltijaam station [in Tallinn], where the public don't even have a roof over their heads. And I think that the Ülemiste terminal should fall somewhere in between those points," Holohei added.
The procurement was estimated at €176 million, following architectural designs by British partners Zaha Hadid.
Only one bid has been received so far, almost double the above figure, at €346 million, from Rizzani de Eccher, an Italian firm.
Construction magnate Raivo Rand of the Rand and Tuulberg Group said that it was inevitable the tender fell through, given the asking prices, and other factors.
"One of these is that [construction materials] prices have increased, and the other is that the work will last for at least three years," Rand said.
"It brings with it quite a lot of risks, while all of these must be taken into account. It seemed already that this procurement had failed. Only one offer was forthcoming, while there are not many such companies in Estonia that would be able to make an offer whatsoever. Since both foreign procurement and also foreign interest was minimal, the procurement process was poor," he went on.
The impasse on procurement means that actual construction work may be postponed to next year, from its original due start date in autumn or winter this year.
Rail Baltic Estonia (RBE), the Estonian aspect of the Rail Baltica high-speed project, is now considering breaking the procurement up into smaller components, and opening up for bidding along such lines.
Marko Kivila, RBE's operations manager, said: "If other alternatives are implemented, i.e. repeating the procurement in parts, then in this case the new tenders would become smaller and, as a result, more palatable to market participants.
"In this way we would hope to get more offers, increase competition and consequently get a more favorable price than the current offer," he went on, adding that this outcome had not been expected.
Preparatory work is already underway at the site, in the Ülemiste district, just south of the city center, while Kivila said that if the rebooted procurement meets with a suitable bidder, work proper may start in the first quarter of next year.
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Editor: Andrew Whyte