The railway market in Latvia continues to grow

Latvian Railways (LDz) has been a leading Baltic freight transport company for the last few years. Considering the increase in Latvian Railways’ main freight groups – coal and oil products – and to keep up with growing demand, Latvian Railways is now seeking opportunities to develop infrastructure in the fastest and most efficient way to provide greater throughput.

Rail freight turnover record

2011 was a record year for LDz Cargo – Latvian Railways’ freight sector. It carried 59.4 million freight tonnes, which means the infrastructure capacity of 65 million tonnes per year has almost been reached. In order to provide greater throughput according to the growing demand, it is planned to increase infrastructure capacity to 85 million tonnes per year. Increasing capacity towards Russia, Belorussia and Lithuania is also planned. The busiest railway section in the country is between Daugavpils and Indra (on the border of Belorussia). The interval headway between trains on this singletrack section is approximately 20 minutes. Latvian Railways is responsible for almost 2,000km of railroad in total.

Cooperating with colleagues from Russian Railways, intensive work has been carried out in order to gain common support for Latvian Railways’ initiative to increase the infrastructure capacity. This is crucial as for almost six months a year, more than five million freight tonnes are transported per month. In March 2012, the amount exceeded six million tonnes. As a result of such increase in freight transport, there is less time for railroad repairs. This situation must be solved in a short period of time.

In 2011, oil and oil products, as well as coal, were the most transported forms of freight – 34.5% and 34.4% of the whole amount. The main freight transporter was Russia with 67.5% of all freight carried by Latvian Railways. Belorussia was the second leading freight transporter at 21.3%. The third was Lithuania at 3.7%. Fifty-four per cent of rail freight was transported through the port of Riga, 41.8% through the port of Ventspils and 4.8% through the port of Liepaja.

LDz has experienced an ambiguous situation carrying coal – while there is a significant coal freight increase, due to bad weather conditions it is not always possible to handle coal in a timely manner. During the first month of 2012, we experienced rail carriage idleness, but it didn’t affect the transportation of other rail carriages and load compositions on the main roads, as the first quarter of the year is usually a challenge because of the winter season.

LDz does have capacity reserves, but there are railroad sections, so-called bottle necks. Calculating freight volumes in relation to the total track length, Latvian Railways takes fourth place among most loaded railroads in Europe, which highlights the company’s efficiency. But in order to increase our capacity and efficiency, serious investments must be considered in throughput increase and system modernisation.

A significant proportion of rail freight in Latvia is carried by private rail carriers and there has been an annual increase in the amount of freight carried by them. Therefore, railroad development is essential for all operators. In 2011, 20% of rail freight was carried by private rail carriers: 2.12 million tonnes by Baltijas Ekspresis Ltd and 12.7 million tonnes by Baltijas tranzīta serviss Ltd.

International passenger traffic

In 2011, 335,000 passengers used international rail passenger traffic between Riga and Moscow, Riga and St. Petersburg and Riga and Minsk. It makes 1% less than in 2010, when 338,000 passengers were carried. According to statistics, 142,000 passengers left Latvia by train in 2011 and 145,000 entered the country – 48,000 were transit passengers through Latvia.

Although domestic passenger carrier Pasažieru vilciens Ltd offers relatively cheaper tickets, international passenger trains in the Latvian territory are attractive to those travelling within the country. The most popular destinations are Daugavpils and Rezekne.

Unfortunately LDz has failed to carry out a project to restore the international railway line from Riga-Tallinn-St. Petersburg. It had been discussed with Estonian Railways but the operator is not ready to join the project, and it would not be cost-effective for the Latvian side alone, as LDz would have to pay for the use of Estonian infrastructure, increasing the price of tickets and becoming uncompetitive in relation to the bus and even air travel.

In cooperation with Russian Railways, LDz is working to find possibilities to increase the speed of international passenger trains on the Riga to Moscow line. The aim of the project is to provide the potential demand of rail efficient transport by 2018 when the FIFA World Cup will take place in Moscow. It is planned to carry passengers by night and reach the destination in 11 hours.

Reconstruction of the Šķirotava’s station marshalling yard

Riga Šķirotava station is one of the main railway junctions in Latvia – 2,500 rail carriages are sorted there daily. Most train sets to Riga Port terminals are formed there. This place of strategic importance is essential for load inlet capacity building.

However, there are certain aspects within the marshalling yard that are performed using methods developed in the middle of last century. For example, when process braking. The braking at the last wagon is carried out by a railroad worker placing specific brake shoes under the train wheels. As this doesn’t meet modern standards, Latvian Railways released a tender in 2011 for the reconstruction of the Šķirotava station marshalling yard. This contract was agreed in February 2012 with BMGS.

This project involves extensive construction works and modernisation of information systems. Braking shoes will no longer be used for braking wagon loads. It will, instead, be done by automated Siemens systems. The project value is 27.3 million LVL, 16.7 million of which is being financed by the European Union’s Cohesion Fund, 4.8 million by the State, and 5.8 million by Latvian Railways. The project is planned to be finished by 2015.

Railway electrification project

Latvian Railways is currently evaluating the best funding options for the railway electrification project worth €549 million (385.84 million LVL), and is expecting to reach a decision in October 2012. The existing DC wiring in the Riga region is only suitable for passenger trains and is in poor technical condition. The electrification project considers the transition to a 25 kW AC system in the existing contact and construction of new contact for railway trunk lines in Latvia.

The aim of the project is to increase operation efficiency and competitiveness of the rail corridor as well as to significantly reduce the greenhouse effect. The project will be carried out from 2015 to 2022.

Implementation of Krievu island project

According to the Riga city development plan, an idea to transfer port terminals from the right bank of the river Daugava in Riga to the left bank has been considered, with the aim of decongesting the city and increasing the port capacity. Latvian Railways is ready to carry out the construction of Station Bolderaja-2 with an access track to the Krievu Island terminals. The financing scheme is already clear and construction is planned to begin by the end of 2012.

The main aims of the project are to develop the railway infrastructure on the left bank of the river Daugava, to modernise and develop the rail junction equipment and to increase the Riga rail junction capacity. New connecting track will have a positive effect on the whole freight transit process on the Zasulauks to Bolederaja section and the whole rail load flow in Riga railway junction. It will guarantee the future develop – ment of Krievu Island infrastructure and ensure general improvement in the range of logistic services in Riga transport junction.

The project is expected to cost 32.075 million LVL, of which 21 million is financed by the European Union’s Cohesion Fund and 11 million by Latvian Railways. The project is planned to be finished by 2015 and will be completed in two stages, with the construction due to be completed by 2014 and the finished construction of Sataion Bolderaja-2 by the end of 2015.

Port terminals will be transferred to an unused area in the north part of Krievu Island, which is more suitable for port work. Port work will partly be transferred from the city centre and the right bank of the Daugava to Krievu Island. Traffic on both banks of the river Daugava will then be balanced and movement of cargo ships close to the centre of Riga will be reduced. Port territory will be developed in 56 hectares of land equipped with handling berths for four bulky cameras (for coal, metal, ore, etc.). The project involves autoroute, railway runway and the construction of the engineering and the communication systems in the port territory.

The traffic flow in Riga and the nearby territory will not be affected during or after the project.

Our strategy and aims

According to the strategy of Latvian Railways, our task is to ensure the management of railway infrastructure in the interests of Latvian economy and serve as the transit spine of the country. Our main aims are to:

• Ensure the inlet capacity of the railway infrastructure according to demand and reach 85 million freight tonnes by 2015
• Ensure competitive cost rate of rail infra – structure services
• Ensure the infrastructure service level according to the carrier demand.

By implementing our objectives, we will not only help the Latvian economy, but will contribute overall to the development of the whole region. As a result, it will also be beneficial for other European countries.

About the author

Uģis Magonis graduated as an engineer-navigator from Admiral Makarov State Maritime Academy in St. Petersburg in 1989. He then worked for Hanza Maritime Agency Ltd, Riga Commercial Port as a State Representative and Member of Supervisory Board representing state interests. He has also worked at the Ministry of Transport of the Republic of Latvia as a Counsellor to the Minister. Uģis has participated as a Member of the General Assembly in the Community of European Railway and Infrastructure Companies (CER) and as a Member of the Board in Latvian Transit Business Association. Since 2005, Uģis has been Chairman of the Board of SJSC Latvijas dzelzcelš. LDz has subsequently become one of the most valuable state joint stock companies in Europe, and is recognised as one of the most effective railways in relation to cargo volume per track kilometre. Uģis has also held the positions of Chairman of the Supervisory Board of SJSC Latvijas dzelzcelš, Member of the Supervisory Board of AirBaltic and Latvian Shipping Company, and Vice-Chairman of the Supervisory Board of Latvian Mobile Telephone Ltd. In 2008, Uģis won the ‘Effective Company Management’ award from the Employers’ Confederation of Latvia. That same year, he topped a top-500 poll as a company leader for performance results in a poll by newspaper Dienas Bizness. In 2009, Uģis received an Honorary Diploma from the Railway Transport Council.