Latvia Faces Claim of Over €14 Million Over Rail Baltica Design Contract

An international arbitration case in Stockholm will examine a dispute over the design and supervision contract for the main Rail Baltica track through Riga. The contract was terminated in October 2023, and in February 2026, RB Rail and the Ministry of Transport (SM) received a claim from the consultant consortium, demanding compensation of over €14 million.

The Ministry has submitted a counterclaim seeking €3.37 million in contractual penalties. The case is being heard at the International Chamber of Commerce's arbitration court in Stockholm. According to RB Rail, on September 26, 2023, the consortium unilaterally withdrew from the contract, citing prolonged delays and systematic deficiencies in the designs. As the delays exceeded the contractual limit, both parties gained the right to terminate. To protect state and EU interests, RB Rail, in coordination with the Ministry, exercised that right.

After the termination, a new procurement was launched, but it failed — only one bid was received, for €39 million, far exceeding the planned budget of €8 million.

On December 10, 2024, the Cabinet of Ministers approved the cross-border connection from Lithuania to the Estonian border, prioritizing the Lithuania border–Misa section, completion of the Rail Baltica passenger station at Riga Airport, and the southern part of Riga Central Station. The Riga section was designated as a second-phase priority, while an alternative connection from Imanta to Riga Airport was approved to serve 1520 mm trains and integrate with the existing network.

The Ministry has requested state budget funding to represent Latvia's interests in the arbitration. It is also known that the first phase of Rail Baltica in the Baltics could cost €14.3 billion, of which €5.5 billion (indexed to €6 billion) would be in Latvia. Total project costs according to the cost-benefit analysis could reach €23.8 billion, compared to the 2017 estimate of €5.8 billion.