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Rail Baltic Estonia signs its biggest ever construction contract

Render of Rail Baltic's Ülemiste Terminal in Tallinn.
Render of Rail Baltic's Ülemiste Terminal in Tallinn. Source: Rail Baltic Estonia

On Wednesday, Rail Baltic Estonia signed a €44.8 million construction contract with Merko and KMG Infra for the construction of the ground floor of the Ülemiste international passenger terminal.

"This is Rail Baltic Estonia's largest contract to date," said company CEO Anvar Salomets, adding that the contract price could increase further depending on indexation.

As the project is rather complex from an engineering perspective, construction tenders were awarded to companies with the required capabilities, Salomets said.

At the same time, Salomets expressed hope that Rail Baltica will sign an even bigger contract this year. Over €200 million has been earmarked for additional construction tenders to complete work during the various phases and at different locations as part of the Rail Baltica project.

"We are (now) closing the project design cycle and so the big contracts are starting to come out," Salomets said.

At the moment, work on the new high-speed rail line is still focused on the incorporation of features such as wildlife crossings and junctions. Geographically the focus is on Rapla and Harju counties. This year however, the company hopes to award construction contracts to build the first 55 kilometers of railway track.

The call for tenders is based on the aim of having the entire Estonian section of Rail Baltica up and running by 2030, Salomets said.

When it comes to the railway lines themselves, the plan is to start with a 10-kilometer section near Kohila on the border between Rapla and Harju counties, as well as the Ülemiste-Soodevahe section in Harju County. It would also be possible to begin with the Tootsi-Pärnu section in Pärnu County, which is quite technically complex due to crossing the Rääma bog, Salomets explained.

Salomets also added, that there has been a great deal of interest in the tenders from those in the construction industry, with some of Estonia's leading companies actively taking part.

He said, that work on the Ülemiste terminal has been assisted by the fact that the tender was broken down into smaller parts. Contracts have already been signed for three, while tenders for the other three will be launched in 2023.

The inclusion of reassurance mechanisms, such as indexation and advanced payment, have also helped companies to mitigate the potential risks involved. "This has also been reflected in the favorable prices for the contractors," Salomets said.

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Editor: Michael Cole

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