2020.05.12 16:30

Prosecutors to look into Lithuania’s €363m railway deal

Following an audit, the Lithuanian Transport Ministry has asked prosecutors to look into the 363-million-euro railway electrification contract with a Spanish consortium.

"I gave the audit material to prosecutors on Monday," Transport Minister Jaroslav Narkevič said on Tuesday. "In our opinion, there is something [...] to look into."

The Transport Ministry has completed the first stage of its audit into the electrification project by the state-owned railway company Lietuvos Geležinkeliai (Lithuanian Railways).

Read more: Lithuanian Railways sign €363m electrification contract with Spain's Elecnor

Narkevič said earlier that the large-scale tender process for the Kaišiadorys–Klaipėda track and the Vilnius railway hub had not been split into smaller parts and the public procurement procedures had dragged on for two years instead of six months as planned.

This increased the risk of missing the deadline for completing the EU-funded project and losing around 200 million euros in EU investment.

Last December, however, the minister gave the go-ahead for the Lithuanian Railways to sign the 363-million-euro contract with Inabelec, a consortium of the Spanish infrastructure construction group Elecnor and Abengoa's engineering subsidiary Instalaciones Inabens.

Spain's Cobra Instalaciones Y Servicios was the runner-up bidder, offering to carry out the project for 323 million euros. The contract with the winning bidder was signed on December 20.

Narkevič then said that those responsible would have to answer for the inefficient tender procedures and increased project costs.

"Certain legal acts were violated in the first phase of the electrification project," Narkevič said.

"As a result of that merger [of the different stages] alone, the tender procedures lasted two years longer than planned and the price was 100 million euros higher than planned," he said.

According to the minister, the second stage of the audit continues.

Prime Minister Saulius Skvernelis admitted that the railway electrification project had been protracted.

"Yes, there were delays and pressure until the very last day. We were driven into a situation where we had no alternative: either the project is going on or, as you know very well, the source of financing disappears," Skvernelis said.

"We can only guess now why this was being done," he added.

The prime minister acknowledged that railway electrification would boost Lithuania's competitiveness and reduce environmental pollution.