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Watchdog closes probes into Latvian rail company

  • 2000-12-21
RIGA (BNS) - The Latvian Competition Council has closed a case against the state-owned railway company Latvijas Dzelzcels (LDz) over a possible breach of competition law while refusing to transport the fuel cargo of Neste Latvija to the port of Riga.

Competition Council chairman, Peteris Vilks, said that the fuel terminal's technical project did not provide for fuel exports, and that the technical instruction does not outline the procedure for operations with export cargo.

"Thus the Competition Council does not have grounds to believe LDz has breached the competition law," Vilks announced.

The council opened an investigation into a possible breach by LDz of the ban to misuse its dominant position in the market. There were two probes, one based on a complaint filed by Neste Latvija, the other on a Latvija Statoil complaint.

A conflict between the rail company and the two fuel traders flared up as LDz refused to transport export fuel cargo to a Neste and Statoil terminal at the port of Riga. It cited technical problems at Ziemelblazma train station in Riga, through which the cargo should be transported.

The state railway technical commission said the oil products cannot be transported through Ziemalblazma to the terminal unless it is reconstructed.

The maximum capacity at Ziemelblazma is 2.1 million tons a year, whereas the expected transportation volume, based on forecasts, is 1.9 million tons - near the critical margin where reconstruction is needed.

LDz said that the two fuel companies have changed their previous business plans to accomplish import cargo transportation en route from the sea with transportation of the export cargo in direction of the sea.

Latvija Statoil and Neste Latvija, meanwhile, said the amounts of cargo to be transported for the business needs of the two companies will be slightly lower than 500,000 tons a year, as envisaged under the previous agreement with LDz. The two fuel traders believe it will be possible to transport cargo in both directions.

LDz has agreed with Statoil and Neste on working out a plan of measures to be taken in order to make fuel export operations possible.