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Tuesday 11.12.2018 | Name days: Valdis, Voldemārs, Valdemārs
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Latvian railway companies want Lithuania to compensate EUR 82.32 million worth of losses

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s railway companies Latvijas dzelzceļš and LDz Cargo invite Lithuanian railway company Lietuvos geležinkeliai to compensate losses worth EUR 82.32 million, which appeared because of the dismantling of Mažeikiai-Latvian border railway route, LDz representatives say.

Based on the decision made by European Commission in the case associated with the railway line, LDz and LDz Cargo have submitted a letter of complaint to Lietuvos geležinkeliai with a request to compensate losses caused by Lithuania’s decision to dismantle the railway line Mažeikiai-Latvian border in 2009.

LDz requests a compensation of losses for the period from 2009 to 2017, which account for EUR 56.92 million.

Calculation of compensation sizes was performed by Ernst&Young Baltic.

LDz Cargo asks Lietuvos geležinkeliai to compensate lost profits worth EUR 25.4 million.

Latvian railway companies will wait for a response from Lithuania. If no response follows, the case will be submitted to court.

As previously reported, Lietuvos geležinkeliai, which received the request on Monday, 3 September, believes it is unjustified.

Lithuanian Transport Minister Rokas Masiulis has called this request a part of political pre-election games.

«We view this step made by Latvia as part of political games prior to October’s elections. I can only say that it is sad Riga did not decide to wait until the end of the case with European Commission. Lithuania has already commenced the restoration of Reņģe line. We are doing everything we can to resolve this old conflict,» he said.

As noted in Lithuanian Transport Ministry’s released statement, LDz has requested information as to when it is planned to restore railway traffic. LDz has also requested a compensation for lost profits.

Director General of Lietuvos geležinkeliai Mants Bartuška said the company has coordinated the transport restoration plan on Mazeikiai-Renge route. Construction is planned to be completed by the end of next year.

«Estimates regarding allegedly lost profits lack justified arguments, because freight volumes headed in Latvia’s direction remain the same as they were prior to the dismantling of the railway line,» the official mentioned in the statement.

According to the company’s director general, even after the dismantling of Reņģe railway line railway connectivity with Latvia was still possible. However, existing railway lines are not used to their full potential, and some of them have not been used for 15 years.

The statement mentions that LDz has had the opportunity to carry oil products from Lithuania using other directions, but the company has never tried using this opportunity.

The 19.5 km long railway line between Polish oil concern PKN Orlen subsidiary Orlen Lietuva’s owned Mazeikiai oil processing factory in Lithuania and Renge in Latvia was unexpectedly shut down in 2008 after the conflict between Lietuvos geležinkeliai and Orlen Lietuva. The reason given for it was the poor state of the railway line and the need for repairs. Later on the railway line was dismantled. Because of that, the oil company was forced to use a longer and more expensive export route to Riga port.

EC commenced an investigation of this situation following a request from Latvia and Orlen Lietuva in 2013 to see if Lithuania had not thereby limited competition between Lithuania and Latvia and breached EU regulations on limiting monopoly.

On 2 October 2017 EC announced the application of a fine worth nearly EUR 28 million on Lithuanian railway company for limiting competition on the railway freight market.

In December 2017 Lithuania’s government decided to restore Mazeikiai-Renge railway line. It is planned to finish construction work before the end of 2019. Initially it was expected this project would cost approximately EUR 20 million. Current estimates, on the other hand, have been reduced to EUR 10 million.

The board of Lietuvos geležinkeliai approved the investment project at the beginning of August. Shortly after, director general of the railway company Bartuška and Polish oil concern Orlen manager Daniel Obajtek together laid a symbolic rail on the restored route.


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