Rail Baltica - Project of the Century ĢIRTS RŪDA General Counsel RB RAIL AS 21.06.2017.

What is Rail Baltica?

RAIL BALTICA – PART OF THE NORTH SEA-BALTIC CORE NETWORK CORRIDOR Rail Baltica is a new fast, conventional double-track electrified and ERTMS-equipped railway line with maximum design speed of 240 km/h on the route from Tallinn through Pärnu – Rīga – Panevėžys – Kaunas to the Lithuanian-Polish border, with a connection from Kaunas to Vilnius. The new railway line will be designed with 1435 mm gauge thus confirming to all requirements of the Technical Specifications for Interoperability (TSIs). 870 km

SOCIAL ECONOMIC BENEFITS UNMEASURABLE CATALYTIC EFFECTS BENEFITS VERSUS COST Bln EUR SOCIAL ECONOMIC BENEFITS 16.2 COST 5.8 GDP MULTIPLIER 2 UNMEASURABLE CATALYTIC EFFECTS + TOTAL BENEFITS: 18.2+ BILLION EUROS Ability to perform services on regional level Increased export Better tourism opportunities Better access to resource/labour market. Higher accessibility leads to a more efficient allocation of resources which triggers productivity gains and stimulates growth Increased transport capacity Better access to study/work place Induced impact of intermodal terminal infrastructure Increased reliability of passenger and freight transport Better access to healthcare institutions Increased opportunities for culture, entertainment, shopping on pan-Baltic level Indirect productivity effects on other business sectors Catalytic effect on businesses located nearby rail stations

Planning phase Construction phase Design phase + planning phase, design phase and construction phase uz kalniņiem

RAIL BALTICA PROCUREMENT PLAN Procurement phase Implementation phase 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Studies TESTING Design Railway line construction & supplies Stations / Terminals / Maintenance Facilities Construction ERTMS Electrification

PROJECT LEGAL TIMELINE 2014 2015/2016 2016 2016 2017 Shareholders Agreement (SHA) Articles of Association (AoA) 2 Grant Agreements (CEF) Inter-Beneficiary Agreement (IBA) Contracting Scheme (CS) Inter-Governmental Agrement (IGA)

Who is who? Project implementers

PROJECT GOVERNING STRUCTURE BENEFICIARIES: THREE MINISTRIES Estonia – Ministry of Economics and Communication Latvia – Ministry of Transportation Lithuania – Ministry of Transportation and Communication Lietuvos Geležinkeliai Rail Baltic Estonia OU RB RAIL SHAREHOLDERS Eiropas Dzelzceļa līnijas Rail Baltica Statyba RB Rail (Branches in LT, EST) CENTRAL PROJECT COORDINATOR Estonia Latvia Lithuania NATIONAL IMPLEMENTING BODIES Rail Baltic Estonia OU Eiropas Dzelzceļa līnijas Lietuvos Geležinkeliai Estonian Technical Regulatory Authority Rail Baltica Statyba Shareholders = also Implementing Bodies Supervise RBR who should supervise them For the Business community it is important to understnad the roles the project’s many actors are playing in project implementation. First, the owners of the infrastructure to be built are the three Baltic countries – Estonia, Latvia and Lithuania. Thus we talk about beneficiaries – the three respective ministries of Estonia, Latvia and Lithuania. At the same time, for the Ministries to be indirect shareholders of the joint venture RB Rail, special purpose vehicles were created in each country to act as the direct Shareholders in RB Rail. The Joint Venture, RB Rail, is the main coordinator of the project, responsible for the railway’s planning, design, construction and marketing (including branding). As I mentioned, it is a commercial company registered in Latvia. In order to ensure VAT remains in Lithuania and Estonia for work that will be done there, as well as to address the needs of Estonian and Lithuanian employees, RB Rail will establish branches in both capitals. Rail Baltic Estonia, the Estonian Technical Regulatory Authority, Eiropas Dzelzceļa līnijas, Lietuvas Geležinkeliai, Rail Baltica Statyba – are National implementing bodies that are responsible for implementing the project in their respective countries. At the same time as you can see, all but the Estonian Technical Regulatory Authority are also the Joint Venture’s direct shareholders

CENTRAL PROJECT MANAGEMENT The role of the joint venture RB Rail AS Guarantees successful project implementation, unrestricted functioning of the single market and equal access to infrastructure; Develops a Centre of Competence Represents the project and ensures interoperability overall; Represents all the shareholders’ interests Ensures cost saving generated by the economies of scale RB Rail AS

RB Rail organizational structure Supervisory Board Internal Auditor Board Project Manager/HR Country manager EE Management board Communications and government affairs CEO Project management unit Country Manager LV Legal & Compliance Country Manager LT CFO COO CTO Pool of experts* Admin and IT Procurement Project Plan Statutory accounting Supplier Contract Management Design & Construction Reporting and Control Finance Business Development Operations, Asset Management Safety & Security Business analysis * To be drawn upon for COO and CTO.

Sub-systems (CCS & ENE) Raw Materials and Key Components PROCUREMENT SPLIT RB Rail Consolidated Supervised national Studies Design Common Standards Business Development Marketing & Branding Sub-systems (CCS & ENE) Raw Materials and Key Components Cross-border Track Sections Track Construction Major Engineering Structures Local Facilities (incl terminals) Land acquisition Global Project studies (including): Supplier Market and Resources Study (raw materials and key components), Technical studies (the European rail traffic management system (ERTMS), construction logistics, maintenance facilities and rolling stock depots, power supply, capacity constraint & buffer capacity development), Global Project development studies (e.g. commercialization, infrastructure management)

Project development

05 04 03 02 01 MAIN OBJECTIVES OF 2017 Project’s Maturity = Point of No Return Project proves good governance 04 03 02 Route approval 01 Intergovernmental agreements signed Transparent financial flow Clear procurement procedures Project activities going in accordance to the plan Most significant researches and analysis carried out Runājot par šo gadu, ir būtiska uzdevuma izpilde, ko no mums sagaida Baltijas valstu iedzīvotāji, Eiropas Komisija, un projekta partneri Polija un Somija. Mums ir jāspēj demonstrēt projekta Rail Baltica tā dēvēto briedumu; angliski teiktu «project maturity». Tas nozīmē, ka 2017.gada laikā mums ar saviem darbiem ir jāpierāda, ka projekts ir sasniedzis tādu brieduma pakāpi, ka to nav iespējams pārtraukt kā arī, ka ir pamats pieprasīt turpmāko finansējumu arī pēc 2020. gada. Briedums ir pieradīts, ja Visas 3 valstis ir apstiprinājušas savus maršrutus (ko Latvija jau izdarījusi) ir parakstīti visi izpaliekošie starpvalstu līgumi, jo vēl kavējais pēdējā vienošanās starp 3 Baltijas valstīm, kur ir apņemšanās atbildēt par projektu līdz tās pabeigšanai Ja būtiskākās izpētes/analīzes, projekta aktivitātes tiek veiktas saskaņā ar plānu, Ja tiek īstenotas skaidras iepirkumu procedūras, lai varētu sākt būvniecības posmu Un vēl vairāk – ja projekts ir labi pārvaldīts, finanšu aprite ir caurspīdīga, kā arī ir nostiprināta labas pārvaldības prakse.

Procurement Principles and Standards

SCOPE OF PROCUREMENT STANDARDS AND GUIDELINES Inform of the framework and main principles of procurement Applies to all procurements and each contracting party Follow the best international market practice Sets out common standards Published & freely available * Actual requirements for a particular procurement are laid down in the procurement documents of the relevant procurement

CONTRACTING AUTHORITY CODE OF CONDUCT We are FAIR We are TRANSPARENT Free competition Use of experts Absence of conflicts of interest Legality Transparency Socially and environmentally sustainable procurement Best value for money

SUPPLIERS’ CODE OF CONDUCT LABOUR Equality Wages Health & safety ETHICS Corruption Conflict of interest Gifts, hospitality Post employment restrictions Selection of business partners ENVIRONMENT Environmentally friendly technologies Lifecycle considerations Waste management

SUPPLIERS’ DECLARATION Signed by supplier & subsupplier together with tender agreement Avoiding corruption, conflict of interest Compliance with laws & regulations INCREASED AWARENESS OF KEY PRINCIPLES & REQUIREMENTS Acting in an ethical, sustainable & social responsible manner Following good practice in respect of labour, health & safety, environmental protection Purpose – to increase awareness of the pronciples and requierements of the RB project Reconfirming aspects outlined in «bubbles»

28 3 4 2 RAIL BALTICA TENDERS - 2017 RB RAIL ESTONIA – RAIL BALTIC ESTONIA LATVIA – EIROPAS DZELZCEĻA LĪNIJAS 4 LITHUANIA – MINISTRY OF TRANSPORTATION AND COMMUNICATIONS, LIETUVAS GELEŽINKELIAI 2

www.railbaltica.org

Legal tender

2016 - 2017 tender 5 firms Length & KPI re-considered Used both – mini-competitions & special tasks EUR 130k Communication is key Communication – need 1 contact person

2017 – 2019 tender 4 + 1 practice areas Up to 4 firms Effectiveness of legal services Case study Blended rate 2 years – commitment from both parties Team & experience – present how do you differ from your competitors Effectiveness = innovation (how to improve co-operation/RB Rail) Keep at reasonable length – 1 A4 page for eaxch of 3. & 4.

4+1 practice areas Procurement Company Secretary Construction, Real Estate and Environment Commercial & Corporate Services Competition Law and State Aid VAR IESNIEGT PAR KATRU LOTI ATSEVIŠĶU PIEDĀVĀVĀJUMU

Main services 01 02 Company Secretary Services Legal Services Assisting in preparing agenda of SB meeting and supporting documents Convening, attending and drafting of minutes of SB, and AGM/EGM Maintaining an appropriate registry of SB decisions Registering or filing of relevant SB decisions with appropriate state or private institutions, submission of such decisions for execution to addressees of decisions Annual compliance and maintenance of statutory records Advising on issues included in the agenda of SB and AGM/EGM, support for SB members Company Secretary Services 02 Legal Services Procurement Commercial and Corporate Services Competition Law and State Aid Construction, Real Estate and Environment Iespējams, ka CSS nevajag tik smalki aprakstīt, vai tieši otrādi – arī otru loti ir smalki jāapraksta

Minimal qualification criteria for Law firms 03 Pan-Baltic coverage At least 1 expert in each Baltic country in each PA (Lot1) or 1 expert in Latvia (Lot2) 02 01 Liquidity In the last audited year liquidity ratio (current assets divided by short-term liabilities) is equal or exceed 1 Turnover 1. not less than EUR 360k (Lot1) or 40k (Lot2) 2. for each of last 3 years Pieņemot, ka līgumcena 2.lotei (sekretārs), būs 20000 EUR un pārējām 180 000 EUR

QR for Lot1 experts (1 expert per 3 countries) Project experience 3 large-scale projects within last 5y in PA 03 04 Position in a project Senior lawyer or higher Education Master’s degree or equivalent 01 02 Professional experience 5 years in PA as senior lawyer or higher Experience – jānorāda darba / uzņēmuma līguma laiks no – līdz + amata apraksts, kas raksturo attiecīgo PA. Large scale – size (100k), cross-border (3 countries), legislative initiatives

03 04 01 02 QR for Lot2 expert Project experience Providing daily corporate law advice for 3 companies or CS services for 1 company (3y) 03 04 Position in a project Senior lawyer or higher Education Master’s degree or equivalent 01 02 Professional experience 5 years in PA as senior lawyer or higher Large scale – size (100k), cross-border (3 countries), legislative initiatives

04 03 02 01 Evaluation Lot1 40% 30% 20% 10% Financial proposal Blended hourly rate 40% Financial proposal 3 points for each max +2 for each expert max 30 point 30% Extra Project Experience of Experts 20 – very good ideas & description 10 – good ideas and description 5 – few ideas, no clear suggestion 04 03 02 01 20% Effectiveness of legal provisions 10 – excellent solution 5 – good solution 2 – poor solution 10% Case study Case study – procurement pan Baltic case, legal base Juridiskā nodrošinājuma efektivizācija – kā veicināt RBR juridiskā nodrošinājuma efektivitāte – apmācība, paraugi, inovatīvi piedāvājumi problēmu risinājumiem, jānorāda pieredze piedāvāto risinājumu realizēšanā, inovācijas cost controle, co-operation with other firms in panel. Par 3./4. – viena A4 lapa.

Evaluation Lot2 100% Meet criteria + lowest price

Special Task Agreement Mini Competition Direct Task Choice of approach - at sole discretion of RB Rail AS

KPI 01 02 03 04 DEADLINES INFOGRAPHIC COOPERATION QUALITY After waiting period – a firm may take part again 03 If a firm received twice 2 or less, will not be invited for next 3 mini competitions and/or direct task 02 Results of KPI’s will be combined 01 The KPIs are evaluated after each task 02 DEADLINES 1 (missed) – 3 (on time) 04 01 COOPERATION 1 (bad) – 3 (good) 03 QUALITY 1 (bad) – 3 (good) INFOGRAPHIC Lorem ipsum dolor sit amet consequitor oragami is radical Skala 1-3 Co-operation – response time, clarity of communication, clarity of costs/invoices, understanding of project/business/task Ability to meet deadlines/clarity of timescale Quality of advice & documents Plan regular review (1 per year?)

Rules apply to Pan-Baltic & individual level Conflict of Interests Rules apply to Pan-Baltic & individual level Representation of another client that will be directly adverse to RB Rail interests After panel – prevented in the same matter or due to received confidential info Representation of another client that harm possibility to act solely on RB Rail interests Notification to RB Rail Prevented unless RB Rail consents «Chinese wall» solution Do not see problem – in acting for other implementing bodies/beneficiaries. See problem, if acting against RB Rail (litigation/ conflict situation).

PROCUREMENT TIMELINE Results announced, agreements concluded 01.09 PROCUREMENT TIMELINE 08.08 Results announced, agreements concluded 04.07 Submission of offers 30.06 Tender rules published 27.06 Announcement Feedback

Together we can!