Ex­pert: Baltic gov­ern­ments should re­view Rail Baltica gov­er­nance and im­ple­men­ta­tion model

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Gov­ern­ments of Baltic States should re­view Rail Baltica gov­er­nance and im­ple­men­ta­tion mod­els, says Vi­cePres­i­dent of the Baltic In­sti­tute of Cor­po­rate Gov­er­nance An­dris Grafs.

He ad­mits that the cur­rent sit­u­a­tion has out­lined the root of the prob­lem – which is the gov­er­nance model of RB Rail and di­vi­sion of re­spon­si­bil­ity in the project’s in­tro­duc­tion process. RB Rail share­hold­ers – rail­way com­pa­nies – have a dual role in Rail Baltica project. On one hand, share­hold­ers per­form ob­jec­tives in ac­cor­dance with the Com­mer­cial Law – they elect su­per­vi­sory board that en­sures over­sight of the work per­formed by the man­age­ment. On the other hand, RB Rail share­hold­ers are also in­volved in the im­ple­men­ta­tion of Rail Baltica project. They re­ceive part of Rail Baltica’s fund­ing via RB Rail. With that, RB Rail man­age­ment should make sure fund­ing is used in ac­cor­dance with re­quire­ments – that to a cer­tain ex­tent is one of the tasks per­formed by com­pany share­hold­ers. At the same time, share­hold­ers’ rep­re­sen­ta­tives – su­per­vi­sory board mem­bers su­per­vise the work per­formed by RB Rail man­age­ment, said Grafs. Ac­cord­ing to him, Baltic gov­ern­ments in co­op­er­a­tion with Euro­pean Com­mis­sion, which fi­nances 85% of Rail Baltica project, should re­view the project’s gov­er­nance and im­ple­men­ta­tion model to en­sure its suc­cess­ful im­ple­men­ta­tion in time and ac­cor­dance with the bud­get. «Gov­ern­ments should con­sider ways to ex­clude the pos­si­bil­ity of con­flicts of in­ter­est in the project’s im­ple­men­ta­tion. Be­cause RB Rail su­per­vi­sory board in­sures over­sight of the EUR 5 bil­lion worth project’s im­ple­men­ta­tion, it is nec­es­sary to in­clude pro­fes­sion­als to the su­per­vi­sory board – in­de­pen­dent board mem­bers with ex­ten­sive in­ter­na­tional ex­pe­ri­ence in the pri­vate sec­tor and im­ple­men­ta­tion of large-scale projects,» said the ex­pert.

He said that if Baltic gov­ern­ments do not re­view the project’s gov­er­nance and im­ple­men­ta­tion model, there is no rea­son to ex­pect the prob­lem to re­solve it­self with a new CEO.

Zane Bitere/LETA

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