The Ministry of Transport will conduct calculations on the potential cost savings of the railway sector reform, which includes integrating the state-owned “Eiropas dzelzceļa līnijas” (EDzL) into “Latvijas dzelzceļš” (LDz) group, Transport Minister Atis Švinka (Progressives) told LETA on Wednesday after a meeting of the thematic committee on the implementation of the Rail Baltica project.
He explained that the project currently requires a clear answer on leadership, making the first task the transfer of the design responsibilities of the joint Baltic company RB Rail to EDzL. The second task is to treat the railway infrastructure as a unified system, which is why EDzL should be integrated into the LDz group to eliminate duplication of functions and improve management efficiency
Švinka acknowledged that the meeting raised legitimate questions about critical details, and so the reform plan is currently at a conceptual stage. “Once we see detailed solutions, savings, and optimizations, we’ll be able to assess whether the proposed plan is feasible. Conceptually, the plan is moving forward,” he said.
When asked about the additional funding needed for the project this year, Švinka noted that over 62 million euros was required at the beginning of the year to cover costs for RB Rail, EDzL, construction indexation, and other needs. However, the total has since been reduced—though he did not specify by how much.
“It is difficult to find this additional funding, and while there is no clear-cut answer yet, there is a vision on how to resolve it,” the minister added.
On whether the integration would result in job cuts at EDzL, Švinka responded that Latvia’s railway operations are extensive and require highly skilled specialists. Many foreign experts with experience in constructing standard gauge railway infrastructure have been brought in, but ideally, local engineers and technical staff should absorb this expertise as quickly as possible.
The meeting also discussed the design and construction of the energy subsystem for the first phase of Rail Baltica, which requires a Cabinet decision for the next implementation steps. Additional topics included the consolidated procurement of materials and the funding required for construction, including centralized material deliveries, according to Ministry of Transport representatives.
As previously reported, the Ministry’s draft reform plan includes integrating EDzL into the LDz group and consolidating the group’s subsidiaries. It is planned that “LDz Ritošā sastāva serviss” and “LDz Loģistika” will be merged into LDz Cargo to enhance competitiveness and reduce administrative costs.
The need to spin off the merged LDz Cargo as a separate state-owned enterprise is also being considered, to ensure the complete separation of railway infrastructure management and transport operations.
According to the Ministry, the railway sector reform envisions significant changes to industry governance, aiming to optimize resource use and reduce administrative costs. It will also clarify the management and funding model of the sector and resolve the issue of who will operate Rail Baltica infrastructure.
Currently, LDz manages existing rail infrastructure, while EDzL is responsible for developing new Rail Baltica infrastructure.
In the Ministry’s view, the optimal solution for successfully integrating European standard infrastructure into the national railway system is the gradual consolidation of companies, ultimately resulting in full integration of EDzL into the LDz group.
EDzL is a fully state-owned enterprise with share capital of 4.445 million euros.
Preliminary data show that in 2023, the LDz group had a turnover of 233.738 million euros—an 11.3% decrease compared to 2022. The group’s losses increased 2.4 times to 7.794 million euros.
LDz is the public railway infrastructure manager and parent company of the group, which also includes: LatRailNet (responsible for infrastructure charging and capacity allocation), LDz Cargo (freight and international passenger services), “LDz Ritošā sastāva serviss” (rolling stock maintenance), “LDz Apsardze” (security services), and “LDz Loģistika” (logistics services).
The thematic committee was established on the 23rd of February 2024, by Prime Minister Evika Siliņa (New Unity) following a proposal from former Minister of Transport Kaspars Briškens (Progressives). The committee’s main task is to ensure effective cross-sectoral coordination for the successful implementation of the Rail Baltica project by 2030.