Lithuanian Parliament to approve Vilnius - Utena highway PPP project in spring 2015

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Lithuanian Parliament to approve Vilnius - Utena highway PPP project in spring 2015

Lithuanian Parliament is set to approve the A14 Vilnius - Utena highway public private partnership (PPP) project in spring 2015.

Prime Minister of The Republic of Lithuania, Mr. Algirdas Butkevi?ius, commented:

"Vilnius-Utena highway project will be submitted to the Parliament in March 2015, just after the start of the spring session. There is unanimous agreement that the reconstruction is necessary, with discussions still being held only on the specifics of implementation."

The project, which was  approved in early July by the Ministry of Finance, will be the largest ever PPP project in the road sector in Lithuania.

According to Mr. Tadas Jagminas, Director of the Project Management Department of Invest Lithuania, after the project is approved by the Parliament, public procurement is expected to start before the end of 2015. Construction works are estimated to start in 2016.

The project's scope encompasses the design and reconstruction of sections of the Vilnius - Utena highway totalling 72.1 kilometres. Following completion of the work, the contracted party will be required to carry out regular maintenance of the highway in order to ensure the proper functioning and effectiveness of the infrastructure. The PPP contract will be for a period of 13 years.

The total project investment is estimated at €80 million (US$100 million) while the overall project, in terms of future availability payments, has a total budget of €175 million (US$218 million).

The Vilnius - Utena highway was initially constructed several decades ago. In the last ten years traffic has nearly doubled, causing the concrete road to become bumpy and therefore both uncomfortable and unsafe to drive on.

Lithuania already has experience of such ventures, the PPP method was successfully adopted in the construction of the Palanga bypass. The project was among six PPP pilot projects approved by the Lithuanian government in 2009. The Lithuanian Road Administration selected Kauno tiltai and Siauliu plentas to design, build, operate, and finance the Palanga bypass contract, worth €36 million over 25 years.

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