Lithuanian railroad's stalling tactics threat to Rail Baltic

Andres Reimer
, majandusajakirjanik
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Photo: Arvo Meeks / Lõuna-Eesti Postimees

Lithuania's national rail company did not sign the common procurements agreement of Rail Baltic partners the latter were scheduled to showcase yesterday, undermining the project's credibility first and foremost in the eyes of primary investor, the European Union.

Developers of the project that aims to connect the Baltic states to Europe via the railroad promised the European Commission an agreement by the end of September. However, the document bearing the signatures of eight high-ranking state officials lacked that of head of Lithuania's Lietuvos Geležinkeliai, Stasys Dailydka, at the press conference in Riga.

The Lithuanian company refused to explain the signature's absence and recommended Postimees to turn to the ministry of transport for comment. The ministry's representative Nerijus Kaucikas was satisfied to only give declarative explanations at the press conference, talking about technical circumstances without providing a reason why the document was not signed.

Explanations given by Dailydka earlier suggest international agreements require approval from the company's supervisory board that is scheduled to meet today.

Even though Kaucikas maintains that the company will sign the document in its current form that is vital for the project's continuation, people who talked to Postimees did not share the official's optimism. Lithuania is looking at a railroad reform that has sown tension between the ministry and Lietuvos Geležinkeliai. The so-called signature strike could be the result of lobbying efforts by interest groups, as well as an attempt by the heads of the company to put the ministry in its place.

The project's Estonian head Indrek Orav said that it seems likely the Lithuanian company will make a proposal to change the agreement. «If we manage to change the agreement so that only a few words are replaced without reshaping its contents, we can move on with the same agreement,» Orav said.

«If, however, proposals to amend concern the contract's contents, we have two options: we can either go back to the drawing board or add the proposals as annexes. While the contract allows additional provisions, it will seem peculiar if we start adding them right after it is signed.»

Even though Rail Baltic's critics try to paint the planned railway as a colossus forced upon member states by the European Commission, subsidies pledged for the project that stretch into billions of euros hang by a thread.

Because countries and projects compete for subsidies, doubts as to the purposeful use of financing for Rail Baltic and the ability to stick to deadlines could easily take the sums elsewhere.

«If Lithuanians produce the missing signature by the coming Friday, or at least inside the next few weeks, everything will be alright,» Orav said. «If the decision is stretched out over months, we are in trouble.»

Lithuania has a special team of 16 members dealing with the Rail Baltic project, and the company can give formal reasons to make it the body's decision whether its head will sign.

Stalling in terms of signing the document will slow down the entire project. While the 27 employees of RB Rail Baltic AS are scheduled to declare public procurements for new studies of the railway corridor, without powers they have no choice but to wait idly.

The fact that Lietuvos Geležinkeliai has some management-related differences of opinion regarding the contract was confirmed by Deputy Minister of Transport of Lithuania Arijandas Šliupas to his letter to Estonia's Economy Minister Kristen Michal.

«It does not mean Lithuania is questioning the procurement contracts plan in any way,» Šliupas wrote. «We will conclude this matter by observing internal procedures of all participants on location.» Michal regarded it impossible that Lithuania's national rail company could foil the agreement as the country's transport minister has already signed it. He said that other participants should not worry about Lithuania's internal procedures.

«We have confirmation from Lithuania that the agreement has been signed by Minister of Transport and Communication Rimantas Sinkevicius, meaning it has the support of the Lithuanian government. Companies owned by the Lithuanian state proceed from the government's position,» Michal said. «Lithuania's position is made clear by the minister's signature. Lithuania's internal procedures are up to them.» Legal counselors at law firm Sorainen, that has a connection to Rail Baltic contracts, said that it is unlikely the contract that is rendered void by the absence of a signature will be presented to the public.

The sworn lawyer Postimees consulted refused to discuss the contents of the contract pointing to rules of confidentiality but said that conditions of entry into force are traditionally included in the contract. Land purchases for the Rail Baltic project are scheduled to start next year. Construction should take from 2018 to 2025.