Latvian Roads: Bitumen price compensation could require €4.5 million
State enterprise Latvian State Roads estimates that compensating road builders for rising bitumen costs could preliminarily require about €4.5 million, funded from procurement savings.
State joint-stock company Latvijas valsts ceļi (Latvian State Roads, LVC) has said that compensating state road construction companies for increased bitumen costs could preliminarily require around €4.5 million. The company informed the LETA news agency of the estimate.
The funds will not come from additional state budget allocations but from savings generated during state road construction procurement processes.
Who qualifies
The emergency compensation will apply to construction contracts for which price bids were submitted by March 1, 2026. To qualify, contractors must provide documented evidence that the military conflict in the Middle East affected the rise in construction costs and the execution of their specific contract. Compensation will be applied to work carried out from April 1, 2026 onward, calculated monthly based on the volume of work completed and the actual bitumen price for that month.
LVC noted it currently cannot state a precise total cost, as this will only be known once all qualifying contracts are completed and the actual cost increases across all cases are tallied. The preliminary €4.5 million figure is an initial estimate.
Ministry's position
The Ministry of Transport had already expressed support for the solution proposed by LVC. Transport Minister Rihards Kozlovskis explained that the decision on compensation will be made by LVC itself rather than the Cabinet of Ministers, and it will not be financed from additional budget funds but from resources already available to LVC. Compensation calculations will be based on a methodology developed by Ernst & Young, and the minister stressed that not all costs will be covered.
Kozlovskis noted that road builders had raised this issue as early as spring, but it went unresolved for five months. He said the cost increase could potentially affect other projects as well, including contracts related to the construction of the Sēlija training ground. The minister emphasized that both builders and the state share an interest in completing ongoing road works to a high standard and on schedule.
LVC is a state-owned company established in late 2004 that manages more than 20,000 kilometers of state roads and organizes related procurement.
