Rail Baltica bridge contract dispute triggers war of words

LITHUANIA: LTG Infra has announced its intention to terminate Rizzani de Eccher’s contract to build a major bridge over the River Neris as part of the Rail Baltica programme, but the Italian contractor has told Railway Gazette International that it firmly rejects the infrastructure manager’s assessment and would contest the decision.

Rizzani de Eccher is the general contractor for the construction of the 1.51 km viaduct which will carry the 1 435 mm gauge Rail Baltica line over the River Neris near Jonava. The €64m contract was signed in 2022. The viaduct will include a 150 m span 40 m over the river, avoiding the need for pillars in the water which could affect fish and plants.

On June 15 LTG Infra said it had been actively monitoring the contractor’s financial position since 2023, and had undertaken a comprehensive assessment of progress with construction and the fulfilment of contractual obligations.

A restructuring at Rizzani de Eccher had not impacted on the project until recently, but LTG Infra said ‘significant breaches of contractual obligations have now been identified, including failure to deliver works in line with the agreed schedule and the general contractor’s failure to settle payments with subcontractors’.

LTG Infra said it had assessed an action plan submitted by Rizzani de Eccher, but saw ‘no viable basis for continuing co-operation with this contractor’. LTG Infra said it had settled payments with the general contractor for work performed so far, but subcontractors who had not been paid would need to initiate legal proceedings to recover funds directly from Rizzani de Eccher.

LTG Infra said it now believes there is a risk that the bridge will not be completed on time unless a replacement contractor is appointed. It is preparing to call tenders, and believes that the remaining works can be completed in just over a year from the award of a new contract.

‘We must take decisive action and cannot remain a passive observer when the delivery of a strategic project is under threat’, said Arūnas Rumskas, Acting CEO of the LTG Group.

Contractor responds

On June 16 Rizzani de Eccher told Railway Gazette International that it ‘firmly’ rejected the allegations, which it would contest through the contractual and legal channels in the contract.

The company stressed that contact had not yet been terminated, and LTG Infra had initiated a defined notice period during which it is entitled to respond and to remedy the situation. The contractor said ‘that period is currently running, and the contractual relationship remains fully in force. We continue to perform our obligations and expect LTG Infra to do the same.’

It said it described the decision to publicise the dispute while the remedy period was still open as ‘premature, improper and strongly damaging’, and in conflict with ‘the principles of good faith and confidentiality established by the contract’.

Decisive action is essential

Minister of Transport Juras Taminskas said resuming construction of the Neris bridge is now a top priority.

‘Rail Baltica is strategically important for our connectivity and regional security’, Taminskas said. ‘We must ensure the European‑gauge railway project proceeds without delay and that the main line is completed by the end of 2030. Prompt and decisive action is essential.’

LTG Infra said it had strengthened its contract management and supervision framework, with enhanced monitoring of contractors’ finances, the implementation of additional risk mitigation mechanisms and more frequent progress reviews so that potential risks are identified at the earliest possible stage.