“We have identified the key preconditions necessary to meet this target, including improved decision making during the design and construction phases and timely availability of funding,” says interim CEO and chairman of the RB Rail management board, Mr Agnis Driksna. “If these preconditions are met effectively, Rail Baltica can be delivered on time.”

The RB 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.

Rubesa tendered her resignation on September 27 2018, effective immediately, citing poor oversight and a different and irreconcilable vision for the project’s management and implementation.

RB Rail says it is ready to provide the necessary input to the transport ministries of the Baltic States to allow the necessary changes in decision making, change management and long-term financial planning, which were identified in the audit as requiring immediate attention by the ministers.

The audit found RB Rail has proper regulations to conduct procurements and manage contracts, and confirmed that these were applied as intended.

At the same time, the audit found areas where RB Rail should improve both its regulations and implementation, to achieve higher quality procurement and contracting. In response, RB Rail will develop a new internal procedure by March 2020 for the selection of procurement committee members and external experts as well as a new regulation outlining how to conduct preliminary market research.

The audit highlights the importance of a comprehensive risk management system, which includes all entities involved in the project. The audit concluded that RB Rail has identified, assessed and prioritised risks associated with the implementation of the project, but highlighted the need to use a unified risk management system, which is incorporated in everyday operations.

To develop a unified risk management strategy, RB Rail has procured planning, scheduling, reporting and risk management software, which will be used to ensure that the schedule and budget are accurately defined and monitored during the project, and that all the changes, potential issues and risks are quickly anticipated, easily understood and managed proactively. The system is expected to be in place by July 2020.

“We fully trust and respect the findings of the joint audit, which were delivered by independent audit institutions from Estonia, Latvia and Lithuania,” Driksna says. “We are committed to take action and have already started to implement necessary measures to achieve tangible change in the areas highlighted in the audit.”

“As Rail Baltica Global Project is progressing into the design phase, more technical information becomes available to planners and new needs of the project stakeholders emerge,” says RB Rail chief financial officer, Mr Ignas Degutis, in response to the cost increase. “The Rail Baltica costs for all countries will be updated after the conclusion of the detailed technical design in 2021 and further studies on estimated passenger and cargo flows. At the same time, it must be acknowledged there are also plenty of options to consolidate the costs of the projects through joint procurement and smart engineering solutions.”

Degutis also addressed the reported budget increase under the first grant agreement, which was raised in the audit. “On December 17 2019, the Joint Venture of the Baltic States and the European Commission changed the first Grant Agreement and updated the list and scope of planned activities to be financed,” he says. “According to this, all planned activities are in line with the available funding and the timeline of the first grant agreement.”