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Rail Baltica project: the developer of the Central Station sees no reason to amend the contract

Проект Rail Baltica: застройщик Центрального вокзала не видит оснований для внесения изменений в договор

The developer of the Riga Central Station as part of the Rail Baltica project, the BeReRix company, is ready to listen to the vision of the Ministry of Transport, but now it does not see the need or justification for changing the terms of the contract, BeReRix representatives said, commenting on the coalition agreement reached on Monday, July 8, to begin negotiations between the Ministry of Transport and BeReRix on changes to the agreement to reduce the inflation ceiling. BeReRix noted that at the moment the developer does not have information about the start of negotiations between the ministry and BeReRix. Given that the Ministry of Transport currently owes BeReRix 5.5 million euros and several interim payments are in the process of approval, and that the future strategy for co-financing the project from the state is unclear, the developer is giving absolute priority to immediately resolving the current outstanding problems before moving on to other issues, the company emphasized. BeReRix believes that contractual obligations must be fulfilled by both the developer and the customer, adding that the only partial inflation compensation provided for in the contract for the construction of the Riga Central Railway Junction and the Daugava Bridge is currently in favor of the customer, namely the Latvian state, since it only partially offsets rising costs, including those incurred during the Covid-19 pandemic in 2019-2022 and due to uncontrolled inflation caused by the war in Ukraine. Thus, according to the developer, the inflation ceiling provided for in the contract provides benefits to the client. The company explained that, taking into account partial compensation according to the formula laid down in the agreement, Latvian taxpayers have never overpaid and will not overpay for construction work. In addition, the contract price of Riga Central Station is based on the prices of the tender submitted in 2018 and provides only partial inflation coverage. Since the competition, the consumer price index in Latvia has been 35%, but in construction it is slightly higher, BeReRix noted. The developer emphasized that reducing inflation is not within the competence and capabilities of businessmen; the Ministry of Finance and the Cabinet of Ministers are responsible for this. BeReRix is puzzled by the statements of the Ministry of Finance and the Ministry of Transport about an alleged increase in cost, since the developer, during the execution of the contract, followed the instructions of the client – the enterprise Eiropas dzelzceļa līnijas (EDzL) responsible for the construction of Rail Baltica in Latvia – and the instructions of the joint venture of the Baltic countries RB Rail, in connection with which , in turn, the scope of work and, accordingly, the amount of the contract increased, and these changes were carried out under the strict supervision of international engineers.

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