• Smilšu iela 1,
  • Rīga, LV-1919,
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The CFCA terminates the agreement with Rīgas Satiksme on implementation of the Skanste tram project

The Central Finance and Contracting Agency (CFCA) has made a decision to terminate the agreement with municipal public transport company Rīgas Satiksme (RS) on implementation the Skanste tram project co-funded by the EU funds. Notification about the decision was today sent to the RS.

CFCA has assessed the information and explanations provided by Rīgas Satiksme, the updated action plan concerning risks of project implementation, reports of the audit company Ernst&Young Baltic  and other available information on operations of Rīgas Satiksme. Based on these findings, CFCA has made a decision to unilaterally terminate the contract

We have based our decision on the risks that are unacceptably high and, in fact, exclude a possibility to implement the project in line with the plan and report its expenses to the European Commission (EC). At the moment it is no longer possible to ensure due implementation of all activities foreseen by the project – agreements, procurements, construction works, purchase of trams, etc. Besides, the company is still struggling with organization of its activities and project management; there are suspicions about possible fraud in procurements. I would like to remind that there is zero tolerance of fraud and corruption in projects co-funded by the EU. To sum up – the present conditions clearly state that the project cannot be implemented within framework of the EU funds,” explained the CFCA Director Mr. Mārtiņš Brencis. 

In accordance with the laws and regulations CFCA as a cooperation institution has the rights to unilaterally terminate EU funding agreement in cases of project implementation agreement defaults, if the project terms are not complied with or there are other conditions that negatively affect or might affect achievement of the specific support program results and monitoring indicators.

CFCA has stated unacceptably high risks that are substantial for achievement of the project objectives: compliance with the implementation term and achievement of the foreseen indicators, financial capacity of the company in order to ensure sufficient and continuous funding for implementation of the project activities, company’s reputation and safe and efficient act that complies with good governance principles.

It was planned to implement the project by August 31, 2023, until when the company had to build or reconstruct a total of 6.6 kilometres of tram line and purchase 12 low-deck trams.

Up to now for the implemented project activities CFCA has paid to the company EUR 451 304; and the RS has to repay this sum. The term for repayment – 3 August 2019.

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