Baltic Express: Latvian transit industry’s international competitiveness has gone down because of LDz Cargo

It is great the Competition Council has fined Latvian Railway (LDz) a considerable amount for distorting competition. However, it is also necessary to consider the amount of losses LDz Cargo’s policy has cost other market participants over the years and how it may be possible to compensate them, told by Baltic Express deputy council chairman Aivars Gobiņš.

He said that LDz’s unwillingness to provide equal competition conditions for all railway freight carriers, monopolization of the border sections in the interests of its subsidiary LDz Cargo and its unjustified tariff increase policy have resulted in not only a considerable decline of railway transit, but have also reduced the international competitiveness of Latvia’s transit industry.

A single company’s abuse of dominant position to limit the competitiveness of other market participants is absolutely unacceptable in a democratic country. This kind of behaviour is prohibited by both EU legislative acts in regards to free competition and Latvia’s own legislation, says Gobiņš.

KP found that since 2007 SIA LDz Cargo has abused its dominant position on the market, impeding operations of competitors on the Latvian railway freight market by using a different pricing policy in relation to its and competitors’ clients for freight carrying. In certain cases SIA LDz Cargo terminated carrying contracts along the Russian and Belarusian border. Additionally, the company has been using an unjustified fee for downtime of privately owned freight wagons on public railways.