Latvia’s state security service, the Constitution Protection Bureau (SAB), plans to scrutinise a tender to deliver trams to the country’s second-largest city won by a Russian company with ties to Moscow’s military industry, local media reported on April 16.

Lithuania-registered Railvec, which won the €5mn tender to provide trams to Daugavpils’ public transit company, is owned by Russian conglomerate Transmashholding, reported Latvia’s public broadcaster LSM.

Transmashholding has carried out orders from the Russian military, such as producing parts for surface-to-air missile systems or engines for submarines, it said.

Latvian officials had given no further information about the circumstances of the tender until after the SAB looked into it. Defence Minister Raimonds Bergmanis said there is a risk that local public transportation could be in thrall to the Russian manufacturer, as Daugavpils’ obligations will not stop at tram procurements, LSM said. 

Latvia and its neighbours Lithuania and Estonia have long been wary of Russian influence on their politics and economies. Such concerns have increased since after Russia annexed Crimea from Ukraine in 2014, pushing the Baltic trio to step up the modernisation of their armed forces and calls for Nato – of which all three are members – to increase vigilance and strengthen military presence in the region.

International Railway Journal reported that under the contract, Transmashholding subsidiary Tver Carriage Works is to build type 71-911 City Star design developed by PK Transportnye Sistemy, Russia.

The trams are to be purchased as part of a larger investment into Daugavpils public transportation infrastructure. EU funding of €13mn has been earmarked for the project due to be completed by August 1, 2023.