Lithuania's state-owned railway company will require significant government aid once Belarusian potash transit comes to a halt. Tensions with China may also affect business.
Mantas Bartuška, CEO of Lietuvos Geležinkeliai (Lithuanian Railways, LTG), says the company may need around 60 million euros in state aid to maintain infrastructure.
“It seems that the moment is approaching when shipments will stop, which means that we will lose around 60 million euros in annual revenue and Lithuania's entire logistics chain will not receive over 100 million euros in revenue,” Bartuška told BNS on Thursday.
Transport Minister Marius Skuodis earlier said that once US sanctions on the fertiliser manufacturer Belaruskali came into effect in December, Belarusian export transit via Lithuania would cease completely.
Read more: Due to US sanctions, Lithuania to cut off Belaruskali exports
“Belaruskali's products are clearly the most significant, but we are already not transporting oil products and freight from Grodno Azot,” Bartuška said. “We estimate that we may need an infrastructure subsidy of around 60 million euros per year.”
Otherwise, growing infrastructure costs will lead to a hike of 30 percent in rail tariffs, according to Bartuška.
LTG is in talks with Ukraine on new cargoes and is also looking at business opportunities in Turkey, according to BNS.
Last year, LTG handled around 11 million tons of Belaruskali fertilisers and a total of 18–19 million tons of Belarusian goods.
Potential drop in Chinese cargo
Lithuanian Transport Minister Skuodis has also suggested that rising tensions between Vilnius and Beijing might lead to a drop in rail freight volumes from China.
At the same time, he pointed out that Lithuanian-Chinese economic ties are fairly weak.
Read more: China recalls ambassador from Lithuania
“We have indications about potential impact on rail freight volumes, but I would not want to elaborate. In general, the [Lithuanian-Chinese] ties are fairly weak, compared to other countries,” Skuodis told the radio Žinių Radijas on Thursday.
Bartuška said some trains transporting cargo to Lithuania from China “might face problems”, albeit relatively minor.
“So far, Chinese transit freight has been going successfully to Kaliningrad towards Germany, and the volumes are even growing. There are some trains going to Lithuania that, we see, might face problems. There are certain obstacles, but these are insignificant volumes,” Bartuška told BNS.
The Chinese share in overall freight volumes handled by LTG is “several percent”, according to him, although it may go up in autumn.
On Tuesday, China recalled its ambassador from Vilnius, in protest of Lithuania's plans to open Taiwan's representation office.
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