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Major EU financing for Lithuania via “Rail Baltica” project

The “Rail Baltica” project opens the way for new construction related public procurement in the Baltic States.

The “Rail Baltica” project aims to lay a new 1435 mm wide European standard railway line across the Baltic States, replacing the old 1520 mm Russian railway line and providing south-north oriented integration into Europe’s railway infrastructure. The track will span 728 km and will link Warsaw-Kaunas-Riga-Tallinn. This modern and environmentally friendly railway will carry passengers at the speed of 170 km/h and cargo at the speed of 68 km/h. A joint venture of the Baltic States, “RB Rail”, has been established to oversee realization of the project. In total the EU has granted EUR 734 million for the whole project. EU financing is estimated to cover 85% of the whole project cost, while the rest will be supplemented by the participant states.

Construction is under way in Lithuania, with the track from Warsaw to Kaunas already completed and an extension from Kaunas to the Latvian border next in line and expected to be done by 2025. The total length of the line in Lithuania will amount to 264 km. The state has appointed state owned enterprise “Lietuvos Geležinkeliai“ AB to oversee realization of the project in Lithuania. Lithuania’s Ministry of Transport has received a EUR 105.9 million grant directly from the EU in addition to a EUR 25.4 million share from the Baltic States “RB Rail” joint venture.

As construction progresses, the state appointed enterprise “Lietuvos Geležinkeliai” AB is constantly organising public procurement to acquire materials, work and services from private suppliers. This means many opportunities for investment in infrastructure development and construction related procurement.