Due to the lack of funds for roads, M. Skuodis calls for the implementation of public and private sector projects – MadeinVilnius.lt

The public-private partnership (PPP) model is being considered for the development of the state road network. AB “Via Lietuva” begins preparatory work and consultations with market participants regarding the possibility of implementing road infrastructure projects using this financial instrument.

“I have repeatedly stated that the existing road funding is not sufficient for all the necessary road infrastructure projects, so we are constantly looking for opportunities to attract new sources of funding. Although financing from the budget is usually cheaper, if such opportunities are not available, we see public-private partnership as one of the alternative ways to ensure the implementation of specific road infrastructure projects of national importance. According to this model, some road infrastructure development projects in neighboring countries are successfully implemented, for example, the Kekava bypass in Latvia was built last year,” says Minister of Communications Marius Skuodis.

In the opinion of the Ministry of Transport, the construction of Kaunas Western Bypass (about 16 km long), Klaipėda South Bypass (about 6.8 km long), Zarasai City Bypass (about 9.34 km long), regional road No. 130 could become projects implemented in this way. Reconstruction of the Kaunas–Prienai–Alytus section from 11.6 to 31.1 km.

“Projects developed on the principle of partnership between state and private capital would allow us to implement projects important for the improvement of the country’s road infrastructure faster. We have already arranged this year’s actions, during which the possibilities of this financing model will be assessed in detail and preparatory actions for its application to specific objects will be carried out. Funding for road infrastructure is limited, so we not only use the received state allocations as efficiently as possible, but also initiate additional actions in order to use the available funding opportunities”, says Marius Švaikauskas, CEO of AB “Via Lietuva”.

Decisions on the implementation of projects through PPP would be made only after preparing investment projects in which possible alternatives would be evaluated and justified based on the analysis methods established by the Central Project Management Agency, including other necessary elements (financial analysis, financial indicators, socio-economic benefits, etc.).

When implementing road infrastructure projects through PPP, a long-term contract is concluded between the state and a private entity, according to which the latter provides and finances public services and/or performs economic activities by investing in assets and assuming the risks associated with such activities and receiving income from them.