Latvian national railway company Latvijas Dzelzceļš (LDz) has cancelled its planned and ongoing projects to electrify the country’s railway network valued at 441 million euros. At the same time, LDz requires the financial bailout from the state. It requested around 41 million euros to secure its financial stability.

At the beginning of the year, Latvijas Dzelzceļš (Latvian Railways, LDz) has already announced its plans to reduce the staff by 1,500 people (its personnel consists of 9.950 people). Another momentous decision was adopted by the company on Monday, 23 March, under the influence of two key factors. The first reason is the gradual decrease in rail freight traffic, especially starting from the first half of 2019. “Now, the situation has substantially changed, and the changes to rail freight volumes and freight segments, brought about by the geopolitical situation, require corrections also to railway investment projects,” said Māris Kleinbergs, CEO of Latvijas Dzelzceļš.

Coronavirus impact

Another factor is the decline in economic activity and the looming crisis caused by the coronavirus outbreak. “The revision of the LDz investment projects is not an easy decision, but it is necessary to ensure that in the current situation the state does not undertake an additional burden that could impede Latvia’s economic recovery from the current recession,” added Mr Kleinbergs. Simultaneously, Latvijas Dzelzceļš asked the country’s government to allocate 40.8 million euros to provide its financial stability. The decision regarding this issue has not been finalised

Big plans

Earlier, Latvian Railways planned to electrify the country’s network with a 25-kilovolt and 50-hertz alternating current. This programme is valued at 441 million euros. 318.5 million euros of this amount should have been financed from the EU Cohesion Fund. The Latvian electrification project consists of three phases. The first phase covers the period until 2023 and includes the electrification of three main lines with a total length of 314 kilometres in the eastern part of the country: from Krustpils to Riga, Rēzekne, Daugavpils.

Two other phases are designed for the period until 2030. Within the second stage, LDz planned to electrify the 376-kilometre route from Krustpils to Ventspils via Jelgava and Tukums. The final stage includes the modernisation and conversion of three existing electrified routes: from Riga to Tukums, Jelgava and Skulte. It is worth to note that the current share of the electrified railways in Latvia is only 14 per cent. These lines provide only the suburb trains from Riga to Tukums, Jelgava, Skulte and Aizkraukle.

Read also:

• Estonia plans electrification of railway network