The construction of a recreation center on the shore of Lake Kovšu in Rēzekne has been suspended and the contract with the builder has been terminated, the city municipality informed.
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Rezekne The municipality and SIA “Arčers” signed an agreement on the termination of the contract concluded on September 29, 2020 “Construction works of the Recreation Center, construction of parking lots and driveways, improvement of the territory and construction of utilities, on the shore of Lake Kovšu, Rēzekne”.
Vietvara points out that the construction industry has changed dramatically since 24 February 2022 in connection with Russia the start of hostilities in Ukraine. Namely, a wide range of international sanctions were imposed on legal and natural persons of Russia and Belarus, which are regularly supplemented, significantly affecting the trade and supply processes not only in Latvia, but throughout Europe and the world, especially in the field of construction.
“Archers” has emphasized to the municipality that due to the significant increase in costs and disruptions of supplies, it is no longer possible to continue the construction works within the framework of the existing contract, therefore an agreement was signed on the premature termination of the construction contract.
Rezekne City Council the chairman Alexander Bartashevich (S) considers that the signing of an agreement on the early termination of the works contract and the announcement of a new procurement for the construction of the recreation center, given the new prices, is the only correct and considered decision. Otherwise, the city will have to return all of European Union the funds received from the Structural Funds for the implementation of the project. Also, the city “will not have an object that is so necessary for the development of tourism business both in Rezekne and throughout Latgale in the region “.
Currently, municipal specialists are working on the development of a new procurement regulations, and a new procurement for the remaining works will be announced in the coming days. Organizing a new procurement and concluding a contract will delay the project deadlines by four to six months, said Imants Mekša, Deputy Head of the Urban Environment and Development Department of Rēzekne Municipality, Head of the Development and Investment Department.
The agreement stipulates that “Archers” will guard the object and perform conservation works where necessary until the signing of a new contract with the contractor selected as a result of the procurement.
The total cost of the project “Establishment of Rēzekne Recreation Center for Tourism Development” is 8,044,430 euros. Funding from the European Regional Development Fund amounts to EUR 5,028,014.
The project, which was planned to be implemented by the end of 2022, planned the reconstruction of the 190-meter-long section of Brīvības Street, reconstruction of the road surface, sidewalks, rainwater drainage system, replacement of lighting, construction of new water supply and domestic sewerage branches to the degraded area. The construction of parking lots and driveways, improvement of the territory, construction of heating networks, construction of water supply and domestic sewerage networks were also planned.
The building of the recreation complex itself is designed on three floors, with an area of 3076 square meters.
In the financial year, which was from June 1, 2020 to May 31, 2021, the construction company “Arčers” had a turnover of 35.664 million euros and earned a profit of 1.632 million euros, according to “Firmas.lv” information. No more recent financial data is available.
Construction company “Archers” was registered in 1992, its share capital is 4.7 million euros. The sole owner of the company is JSC “UGN”. The real beneficiary of the company is Mārtiņš Lāma.
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