#StandWithUkraine Press information

On 14 June, the Cabinet of Ministers took note of the information report prepared by the Ministry of the Interior “On the increase in construction costs and sources of financing for the high-readiness projects (construction of new fire stations in Aizpute, Dagda, Iecava, Ilūkste, Kandava, Priekule, Rūjiena and Saulkrasti)”.

The information report was prepared in order to inform the Cabinet of Ministers (CoM) about the situation and for the CoM to take a decision on the sources of funding for the increased construction costs incurred by the SFRS depots that will perform the functions of the Disaster Management Centre.

The Russian war against Ukraine has had a negative impact on the construction sector in Latvia, leading to sharp and unpredictable price increases for construction products, as well as unavailability of certain construction products and labour shortages.

Given that the tender for the construction of the above-mentioned SFRS depots has already been carried out and the construction estimates have already been prepared for 2021, the construction companies carrying out the construction of these SFRS depots approached the contracting authority, the State Collateral Agency, with detailed estimates of the cost increase of 3 164 872.89 euro.

Taking into account the funds allocated for the implementation of the measure and their absorption in the previous period, a financing gap of 2 988 321 euro in 2022 and 316 488 euro in 2023 has been identified for the continuation of the construction of the SFRS depot.

Given that the construction of the new depots is vital to strengthen the home affairs sector, the Ministry of the Interior has found the possibility to partially cover the cost increase in 2022 in the amount of 948 855 euro by proposing a reallocation of funding between programmes, sub-programmes and measures.          

A further 248 713 euro of the cost increase is to be covered by funds earmarked for the purchase of equipment for the SFRS depots, but due to the economic nature of this expenditure it has not been possible to commit them for this purpose. This is provided for in the Cabinet of Ministers Regulation “On Reallocation of Appropriations” adopted today at the Cabinet meeting. The equipping of the SFRS depots will be ensured within the funds allocated for the execution of the basic functions of the department.

The remaining funding of 1 790 753 euro needed for 2022 is to be allocated from funds for unforeseen events. This is foreseen in the Cabinet of Ministers Regulation “On Allocation of Financial Resources from the State Budget Programme “Funds for Unforeseen Events””, adopted today at the Cabinet meeting.

At the same time, the Ministry of the Interior has undertaken to cover the shortfall of funding of 316 488 euros in 2023 within the State budget allocated for the performance of its core functions.

Prepared by:

Ministry of the Interior

Communication Department