Lithuanian railways to be reorganized amid criticism

Lithuanian Transport and Communications Minister Rimantas Sinkevicius vowed Wednesday to reorganize the state controlled Lithuanian railways amid criticism from the country's president and possible fine from the European Commission.

Sinkevicius told local media that the ministry will propose to the European Commission to reorganize Lithuanian railways according to the 4th railway package.

This set of legislation aims to create a single European rail, encourage competition by separating rail infrastructure and railway undertakings.

"Complying with the legislation which has already been approved in the EU would be the most rational solution," Sinkevicius told journalists referring to the 4th railway package.

"We will propose to make the activities of Lithuanian railways more transparent as it is determined in the 4th railway package," said Sinkevicius.

Though, he said the government aims to maintain a vertically integrated model of the company's structure.

The minister revealed the plans after meeting with the country's President Dalia Grybauskaite earlier on Wednesday.

Sinkevicius and Grybauskaite discussed the European Commission's accusations that Lithuanian railways abused its dominating position and the prospects that the state controlled company may receive a fine of 43 million euros (about 48 million U.S. dollars) for removing railway stretch to Latvia.

Grybauskaite urged the government to find a solution and inform the European Commission about its decisions that "would help avoid sanctions".

She highlighted that "the government's inaction will cost Lithuania millions in fines".

According to the president, the government has to make a decision on reorganization in Lithuanian railways immediately.

"Lithuanian railways are acting like a state within a state," Grybauskaite was quoted as saying in a press release.

"It is intolerable that the company's interests are raised above the interests of the country," she said.

Later on Wednesday, Prime Minister Algirdas Butkevicius dismissed Grybauskaite's criticism, noting he doesn't think Lithuanian railways are acting like a state within a state.

The European Commission has recently proposed the country with two solutions, either the country reorganizes Lithuanian railways by separating infrastructure and cargo and passenger carrying into two companies, or pays the fine and rebuilds the railway track, according to local media.

Lithuanian railways dismantled the track between Lithuania and Latvia in 2008. This action prevented Orlen Lietuva, a Polish controlled oil refining company in Lithuania and major client of Lithuanian railways, from using services of other railway companies. In 2013, the European Commission launched an anti-monopoly probe against Lithuanian railways. Endit