Follow the investment immigration news in Latvia: Following the expiration of the locomotive procurement contract between the Latvian Railway Passenger Company Pasazieru Vilciens (PV) and the Spanish railway equipment company CAF, PV has been seeking alternatives to update its aging locomotives.
The Minister of Transport of Latvia believes that the new locomotives can be obtained through two avenues: one is through commercial actions, where the company purchases the locomotives itself ; the other is to lease the locomotives, similar to how aircraft are leased in the aviation sector. The existing national subsidy amount is sufficient for PV to update its locomotives without additional financial input from the state budget, and the company can save on maintenance and electricity costs in the future.
PV’s press secretary pointed out that if the decision is made to purchase the locomotives, the company must take out a loan. Due to the lack of support from EU funds, PV plans to obtain new locomotives through long-term leasing (referring only to 30 electric locomotives, as the European Commission has allocated 10 million lats for the modernization of old diesel locomotives, thus diesel locomotives are not included in the purchase plan). The company is studying a leasing plan for electric locomotives for twenty years: after twenty years, either return the locomotives directly or purchase them all.
The Estonian Railway Passenger Company Eletriraudtee has attempted this non-direct purchase model, obtaining 20 diesel locomotives from the Swedish Stadler Group through financial leasing (that is, purchasing them all at the end of the term).
Currently, Latvia can no longer use the previously planned 100 million lats from EU funds to purchase locomotives. The European Commission this week allowed Latvia to use the aforementioned funds for other railway infrastructure renewal projects —— platforms and other facilities for passenger use, as well as the modernization of the previously mentioned diesel locomotives.
