LTG Infra receives state funding and reduces tariffs
The Lithuanian government will allocate 20 million euros to railway manager LTG Infra. Due to the sanctions against Russia, fewer goods are transported through Lithuania, resulting in lower income for rail infrastructure manager LTG.
Until now, the Lithuanian railway network has been maintained only with the income from infrastructure users via track access charges and other fees. The financing allocated to the railway infrastructure will reduce the lost revenue of LTG Infra, and the railway manager can offer businesses more attractive prices for the use of railway infrastructure and facilities. The financing contract between the government and LTG Infra is valid for five years.
Since early April, LTG Infra has been reducing the tariffs for railway service facilities for goods transport between 33 and 200 per cent for business. It is forecasted that the lower tariffs will maintain the existing cargo flows and increase rail freight by 0.5 million tonnes and 6,000 TEUs of intermodal freight travelling to the West.
According to Marius Skuodis, Lithuania’s Minister of Transport and Communications, significantly fewer goods have been transported since last year due to sanctions, and the company’s results will undoubtedly be negatively affected by the declining volume of shipments from the East due to the Russian war in Ukraine. “In the current geopolitical situation, we need to step up our efforts to ensure the efficient operation of the railways to encourage as much freight as possible from the West and to develop new directions for rail logistics”, said Skuodis.
45 million loss
LTG Infra is losing 45 million euros a year in revenue after the transit of Belaruskalij, a Belarusian producer and exporter of potassium fertilisers, was suspended in Lithuania from February. This amount may change due to the war, the sanctions imposed on companies and the decrease in the volume of Kaliningrad transit.
“In other countries, it is common to co-finance the development of railway infrastructure”, says Karolis Sankovski, CEO of LTG Infra. To write off the declining revenue, the company says it continues the digitisation and automation of operations, the acquisition of services from market participants and the optimisation of operational functions, which started a few years ago. LTG Infra plans to save almost 7,5 million euros this year alone.
Track Access Charges Summit 2022
Are you interested in learning more about track access charges and how their policy is influenced by global and European developments, like the European Green Deal, the pandemic and the rising energy prices? On 20 & 21 April 2022, we will discuss these important developments during the 6th edition of the Track Access Charges Summit in Rotterdam.
This article was originally published in our sister publication RailTech.com.