THE MINISTRY OF TRANSPORT AND COMMUNICATIONS COMPLIES WITH THE COMPETITION COUNCIL'S OBLIGATION TO AMEND THE RULES APPLICABLE TO RAIL FREIGHT CARRIERS

The Competition Council has determined that the Ministry of Transport and Communications has properly implemented its obligation and amended the priority rules for the allocation of capacity in the congested part of the public railway infrastructure in a way that does not contravene the requirements of the Law on Competition.

In November 2023, the Competition Council found that certain provisions of the Rules on Priority Allocation of Public Railway Infrastructure Capacity in Congested Public Railway Infrastructure were in breach of the Law on Competition. The provisions of the rules approved by the Minister of Transport and Communications in 2020 created barriers to new entrants to the rail freight market by favouring the incumbent company LTG Cargo. The Competition Council obliged the ministry to amend the provisions of the rules within three months so that they do not conflict with the requirements of the Law on Competition and to pay a fine of EUR 40 530.

The Competition Council had found that the previous provisions of the rules favoured LTG Cargo, a company already present on the market and transporting freight by rail, as it was able to justify, at no additional cost, that it was adequately prepared to use the requested rail infrastructure capacity. By contrast, a carrier wishing to enter the market had to submit contracts for the carriage of freight, acquire rolling stock and the necessary staff, and bear the financial risks involved, without even knowing whether it would be granted access to the requested part of the congested railway infrastructure, and therefore would be able to carry out the activity at all.

The Ministry of Transport and Communications has amended the priority rules and abandoned provisions related to the assessment of the readiness of the companies wishing to transport goods through congested railway infrastructure.

The ministry has also modified the rule stipulating that capacity in congested railway sections should be allocated to the company paying a higher fee for the minimum access package. Previously, according to this rule, the fee was calculated not only on the route for which freight carriers competed but also on other routes passing through the congested part of the public railway infrastructure. As noted by the Competition Council, the established company was able to order more routes for transporting goods and pay a higher fee than a newcomer attempting to enter the market, thus granting the incumbent an unfair advantage

According to the assessment of the Competition Council, by amending the rule and calculating the fee only for the congested part of the public railway infrastructure, the problems previously identified by the institution should be resolved.

"We hope that the changes to the rules will make the rail freight market more open and allow new carriers to enter the market and compete with the incumbent," said Jolanta Ivanauskienė, Chairwoman of the Competition Council.

The decision of the Competition Council, in which the Ministry of Transport and Communications was found to have violated the Competition Law, has been appealed to the court. The ministry has paid the fine to the state budget.