An audit on the management of the internal systems, procurement processes and financing of the Rail Baltica project was launched on October 9. The audit will be conducted jointly by the National Audit Office of Estonia, State Audit Office of Latvia and National Audit Office of Lithuania, which will be the leading institution. The audit will cover RB Rail, the multi-national joint venture between Estonia, Latvia and Lithuania established to implement the Rail Baltica project, as well as implementing bodies and beneficiary institutions of the project in the Baltic States.
The Rail Baltica project involves the construction of an 870km mixed-traffic standard-gauge railway with a design speed of 240km/h from the Estonian capital Tallinn, via Riga and Riga Airport in Latvia, and Panevezys and Kaunas in Lithuania, to the Polish border, with a branch from Kaunas to the Lithuanian capital Vilnius.
The intention of the audit is to answer whether the existing procurement and contracting models are efficient and will enable an effective and economic delivery of the Rail Baltica project. Auditors will assess whether the funding of the project is secured by the governments of the Baltic States and the audit will evaluate how well the project is prepared to mitigate the financial risks associated with potential cost increases and the European Union (EU) funding availability. The audit will last until the end of 2019 and cover the period from 2014 until 2018.
During a meeting with representatives of the State Audit Office of Latvia, RB Rail’s procurement, legal and operational teams presented the auditors with the contracting scheme, inter-governmental and other agreements, project governance structure and procurement system. The financial team also outlined RB Rail’s financing model and the project’s financing.
The audit comes less than two weeks after the CEO and chairperson of the management board of RB Rail, Ms Baiba Rubesa, tendered her immediate resignation citing poor oversight and a different and irreconcilable vision for the project’s management and implementation.
“As Rail Baltica project entering the design phase, the scope of procurement activity is increasing,” says acting CEO, Mr Ignas Degutis. “It is essential to ensure that all necessary procedures and rules are in place in all countries and institutions involved in the project delivery. The scope of the audit is focused on all important aspects of the project delivery, therefore we will be looking forward to the auditors’ feedback to continue improving our performance.”