Threat of insolvency has been averted in the short term - Latvijas Dzelzcels

RIGA - In the short term, Latvijas Dzelzcels (Latvian Railroads, LDz) state-owned company has averted the threat of insolvency, as LDz representatives told LETA, commenting on LDz board's report on the threat of insolvency faced by LDz, which was reviewed at a recent meeting of the company's shareholders.

The company explains that at the end of 2023 the government allocated EUR 10 million to stabilize the financial situation at LDz.

Furthermore, at the beginning of this year a subsidy of EUR 25 million was granted to LDz for maintenance of passenger transport infrastructure, which is part of EUR 50 million subsidy that the company is to receive this year.

In order to stabilize LDz's financial situation in the long term, it is essential that the Cabinet of Ministers approves the indicative rail infrastructure development plan for 2023-2027 and that a multiannual agreement between is concluded by the Transport Ministry and LDz in accordance with the requirements of the Railway Law.

According to LDz, these documents will define infrastructure development and maintenance needs at a national level and serve as a basis for determining the minimum level of costs required to provide such infrastructure maintenance.

LDz expects that the indicative rail infrastructure development plan for 2023-2027 will be approved and enter into force this year. Pursuant to these documents, LDz will revise its existing or develop a new medium-term operational strategy in line with the current situation and national requirements for the rail infrastructure development.

The government decided at an extraordinary meeting on December 28 last year to allocate EUR 10 million to LDz to ensure continuity of operation of the state public rail infrastructure.

This past January, Transport Minister Kaspars Briskens (Progressives) said that there is currently a nearly EUR 70 million shortfall in funds for the maintenance of Latvia's railway infrastructure.

LETA also reported, the turnover of the Latvijas Dzelzcels concern in the first nine months of 2023 was EUR 194.94 million, which is 7.4 percent more than in the corresponding period of 2022, while concern's loss reached EUR 730,000.

At the same time, Latvijas Dzelzcels' own turnover in the first nine months of 2023 was EUR 123.39 million, which is 18.9 percnet more than in the corresponding period of 2022. The company's loss rose to EUR 14.415 million

Latvijas Dzelzcels is a state-owned railway company. Latvijas Dzelzcels group comprises the parent company, Latvijas Dzelcels, and six subsidiaries: LatRailNet, LDz Cargo, LDz Infrastruktura, LDz Ritosa Sastava Serviss, LDz Apsardze, and LDz Logistika.