Foreign investors complain about railway

Sep 07, 2000

RIGA (BNS) - Statoil and Neste fuel distributors complained that actions of the state-owned railway company Latvijas Dzelzscels were obstructing the companies' entry into the fuel export market and led to the combined losses of about $2 million by refusing to establish rates and deliver fuel shipments to their terminals in the Riga port.

State-owned railway company Latvijas Dzelzcels' board believes the complaints are unsubstantiated, Latvijas Dzelzcels spokeswoman Biruta Sakse said.

The agreement between Latvijas Dzelzcels and Neste and Statoil originally concerned the import of fuel, for which the railway company undertook to deliver railway cars for loading and reloading to the Ziemelblazma railway station.

Sakse explained that the agreements with Neste and Statoil contained a provision saying that the station will require reconstruction should the companies import more than 500,000 tons of fuel annually or want to start exporting oil products.

The Ziemelblazma reconstruction project has now been put into the public for discussion, Sakse added.

Latvijas Dzelzcels had pointed out to the forwarding company serving both fuel distributors that it was interested in increasing cargo turnover and willing to transport their cargoes, but the shipments should be reloaded in other railway terminals in Ventspils and Mangali. It is contradictory to the agreement signed with Statoil and Neste whereby Latvijas Dzelzcels undertook to deliver railway cars for loading and reloading to the Ziemelblazma railway station.

Latvijas Dzelzcels explained its refusal as follows: In order to deliver oil products to terminals in the Ziemelblazma station, railway tanks with inflammable substances either had to be maneuvered or left on tracks waiting for the opportunity to approach terminals, and it was potentially dangerous for passenger trains going through. The company board has ordered the state trustees to look into the conflict with fuel distributors and Transportation Minister Anatolijs Gorbunovs has also issued similar instructions.

Latvija Statoil and Neste Latvija applied to the Competition Council, asking it to determine whether actions by Latvijas Dzelzcels complied with competition laws.

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