Government support diverting LDz profits for railway development
Latvia’s government has conceptually supported establishing the portion of Latvijas dzelzceļš profits to be paid in dividends in 2018-2020 at 0%, allowing the company to use profits and divert them to the development of infrastructure development and restoration, as confirmed by LDz.
This includes diverting profits for the formation of reserves to be used for preservation of sustainable function of LDz and realization of planned infrastructure projects.
This condition will have to be taken into account during the development of the legislative draft On State Budget for 2019 and further legislative drafts for the next three years.
In accordance with state capital association’s management needs, LDz has prepared a medium-term strategy for the next ten years. Its realization includes keeping the company’s profits in company hands and diverting it for the development and restoration of existing infrastructure, as noted by LDz.
LDz also notes: «The necessity to secure appropriate financial balance for infrastructure management is detailed in EU Directive for Creation of a Single Railway Space. To ensure infrastructure maintenance on a high level, as well as cost stability for carriers, it is important to keep the company’s financial stability independent of transport volume changes. Keeping profits in the hands of the company would help secure stability.»
«LDz is in the process of realizing very serious changes – by balancing operations in conditions that are very complicated for the industry, we have successfully reorganized the company’s internal structure, making work more efficient. At the same time, LDz is hard at work on development of a new transport corridor and attraction of new customers to help improve Latvia’s international corridor. We are very happy to see the government notice our hard work and provide support for continued efforts,» says LDz President Edvīns Bērziņš.