After a few years of inquiry, the European Commission (EC) may this week announce sanctions for the state-owned railway company Lietuvos Geležinkeliai (Lithuanian Railways) for limiting competition by 2008 dismantling of a rails between Mažeikiai, a city in northern Lithuania, and Renge, Latvia.
Lietuvos Geležinkeliai
© DELFI / Domantas Pipas

The maximum fine for the Lithuanian railway company is predicted to be around 35 million euros.

Ahead of the decision, Latvia, which had filed the appeal against Lithuania, intensified pressure and handed an official note with a demand to rebuild the railway stretch and restore the possibility of transporting freight on Latvian railways.

Poland's Orlen concern, which operates an oil refinery in Mažeikiai and the Butingė terminal, has also reported the dismantled railway to Brussels, however, Lithuania has lately improved its ties with the company.

Lithuania's Prime Minister Saulius Skvernelis confirmed to BNS he had information about the finding to be announced next week.

"I know," said the prime minister when asked whether he knew about the decision expected next week.

"Let's refrain from guesswork, we have preliminary knowledge but let's not guess. In any case, we will use every legal possibility to prove that we're right," said Skvernelis in comment of the possible sanctions.

Under EU rules, competition violations may carry a fine of up to 10 percent of the annual turnover of the last year. LG revenue from freight transportation stood at 350.4 million euros in 2016, consequently, the maximum fine could reach 35 million euros.

An appeal against the EC fine may be filed with the European Union Court based in Luxembourg. Furthermore, payment of the fine would not cancel the duty of removing the violation, with parties still able to file claims.

Brussels has also urged Lithuania to separate the LG operations, however, critics of the idea have said the state could lose the profitable freight haulage operations.

Lithuanian officials have publicly said the railway stretch had been dismantled in 2008 for security reasons.

BNS
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