Cargo, EU – Baltic States, Lithuania, Railways, Transport

Udovickij says that GG filed on February 28 a complaint with the Commission on allegedly unlawful state aid to Lietuvos Gelezinkeliai (Lithuanian Railways, LG) and LG Cargo, the state railway company's freight transportation arm. 

"State interference in free competition, any restriction of competition, is one of the most serious violations of the European Commission regulation," he posted on his Facebook page.  

According to the Klaipeda businessman, GG lists in its complaint systemic violations that have not only affected competition in the rail freight market, but have almost eliminated it.

The Commission has informed the company that it accepted the complaint but has yet to decide whether it will be considered on the merits, he said.

GG' losses due to the authorities' refusal to allocate it capacities amount to 40 mln euros and "are growing every day," Udovickij said. 

GG says that Lithuania is the last EU member state that blocks private railway operations.

"Such a ban on the transport of goods by private operators on trunk lines is a restriction of competition on the part of the state; from the point of view of EU law, this is a fundamental violation," GG said in a comment. 

GG has recently announced the purchase of eight new trunk locomotives to transport Belaruskali's fertilizers from the Belarusian border to the port of Klaipeda.

The company does not disclose the price of the locomotives, but says that the total value of the fleet will amount to "tens of millions of euros". It plans to purchase at least ten more locomotives in the near future, increasing the fleet to twenty. 

GG has in the past three years applied for authorization to carry freight via trunk lines from the border with Belarus to Klaipeda, but has not been allocated the requested capacities by the Lithuanian Transport Safety Administration (LTSA) due to "congestion on the lines".

LTSA Deputy Director Justas Rasomavicius has told that capacities were allocated to companies that plan to carry more freight and have priority in passenger transportation. 

LG Cargo and LG Keleiviams (LG for Passengers), the state railway company's passenger arm, were issued with all the requested permits last year. 

GG told that it has signed contracts with Belaruskali to transport its fertilizers from the Belarusian-Lithuanian border to Klaipeda, where Belarusian fertilizers are handled by Biriu Kroviniu Terminalas (BKT), a port company co-owned by Udovickij and the Belarusian fertilizer producer. 

LGC Cargo, a Lithuanian railway services company that is indirectly linked to former Latvian political heavyweights and Russian Railways via its Latvian majority shareholder Baltic Transit Service, also applied for capacities on railway lines last year. 

LTSA did not allocate the requested capacities, saying that LGC Cargo's business plans have signs of transit and that transit railway shipments between third countries via Lithuania can only be carried out by a state controlled company. 

LGC Cargo has also filed a complaint with the European Commission against Lithuania.