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2019.12.30 15:22

Lithuania rebuilds railtrack to Latvia after EU fine

BNS, LRT.lt2019.12.30 15:22

Lietuvos Geležinkeliai (Lithuanian Railways) has rebuilt a 19-kilometre railway line from Mažeikiai in northern Lithuania to Latvia following a 27-million-euro fine by the EU for "hindering competition".

Lietuvos Geležinkeliai dismantled the track in October 2008 after the Polish-owned Orlen Lietuva, which operates an oil refinery in Mažeikiai, "considered redirecting its freight from Lithuania to Latvia by using the services of another rail operator," the EU said in 2017 after imposing a fine of 27.8 million euros.

The track removal meant that Orlen, "a major customer of the Lithuanian Railways," according to the EU, "would need to use a much longer route to reach Latvia" via the Lithuanian operator.

The rebuilding cost 9.4 million euros and was carried out by Vitras-S, a railway construction and repairs company owned by Estonia's railway services group Skinest Rail. Freight traffic is due to resume early next year.

"The mistake done in the past has finally been fixed and a railway has once again connected Mažeikiai in Vilnius with Renge in Latvia," Mantas Bartuska, CEO at Lietuvos Geležinkeliai, said in a statement.

He added that the reconstruction is also symbolic, which builds a "a foundation of strong relations and business development for us and our partner".

According to the company, Orlen Lietuva, the Mažeikiai-based oil refiner owned by Polish oil group Orlen, will now be able to take a shorter path to carry its product. Up until now, they had to be hauled from Latvia via Šiauliai and Joniškis.

"Our business will be more successful, and that means additional revenue for us, and the Lithuanian state budget," Daniel Obajtek, CEO at Orlen, said in the statement.

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