Saturday, June 22, 2024

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Budimex signs up for €3.7 billion high-speed railway in Latvia

Budimex, one of Poland’s largest construction companies, is to build a high-speed railway in Latvia.

On 21 December 2023, the contract for the construction of the Rail Baltica railway line in Latvia was signed. Under the €3.7 billion contract, the winning consortium ERB RAIL – comprising France’s Eiffage Génie Civil, Poland’s Budimex and Italy’s Rizzani de Eccher – will build the 230-kilometer high-speed railway. The aim of the task is to integrate the Baltic countries into the European rail network by creating a connection between Tallinn and Warsaw. The work will start in 2024 and will take eight years to complete.

Budimex, which has a 30% stake in the winning consortium, will build civil engineering facilities and track for an approximately 230-km section of the new Rail Baltica high-speed line in Latvia. The contract, which includes 175 civil engineering structures and 11 animal crossings, is estimated to be worth €3.7 billion. It will be the subject of several multi-year contracts: 85% of the project is financed by the European Connecting Europe Fund and 15% by the Republic of Latvia.

“The signing of this contract and Budimex’s participation in the consortium, implementing one of the EU’s largest railway projects, is a major success for the Polish construction industry. It is also a success for our country – Poland – that it will be the general contractor for the largest infrastructure investment in Latvia with a total value exceeding PLN 16 billion. It will also be a high-speed line, which is the highest railway standard in Europe. We have been working on this contract as a consortium for more than two years, together with leading players from the European Union market: Eiffage Genie Civil and Rizzani de Eccher,” said Artur Popko, President of the Management Board of Budimex. 

Budimex has recently significantly accelerated its expansion into foreign markets. The company has been present in Germany, among others, for many years, but recently moved into Slovakia, where it is building one of the most important and awaited motorway contracts in the area – the D1 and D4 junction. Moreover, later this year the company will start its first contract in the Czech Republic – the Kutřín dry reservoir. Budimex also submitted the lowest bids and took first place in two tenders: for the construction of the section of the D11 Trutnov motorway to the Polish border and the D35 from Džbánov to Litomyšl in the Czech Republic.

“2023 was a landmark year for our group and we are ending it in very good spirits. We have a stable order book and the Rail Baltica project is the largest contract in Budimex’s history. We were very keen on geographical diversification, so we are all the more pleased that the chosen directions of development in the Budimex Group are already bringing such significant successes,” said Popko.

Rail Baltica is being built as part of the Trans-European Transport Network (TEN-T) and is one of the most important completely new railway infrastructure projects in Europe. The aim of building the route connecting Poland, Lithuania, Latvia, Estonia and indirectly Finland is to accelerate the integration of these areas into the European Union and to increase trade between these countries, thus enabling the creation of a single European market. The environmental aspect is also an important element of the investment – the construction of the line will make the railway an alternative to road transport, thus significantly reducing CO2 emissions into the atmosphere. The design speed of the Baltic section of the route linking Tallinn, Parnava, Riga, Panevėžys, Kaunas, Vilnius and Warsaw is 249 km/h for passenger transport and 120 km/h for goods trains.

The tender for the construction of the Latvian section was launched in 2021 and was in two stages. In February 2022, six consortia applied for prequalification. The final selection was made in September 2023.

Erol Dzhelik
Erol Dzhelik
I think we can overcome global challenges with mutual understanding, international cooperation and diplomacy. We offer you this insight at Poland Weekly.