VILNIUS – Lietuvos Gelezinkeliai (Lithuanian Railways, LTG) says it has not yet received any requests related to the transit of Belaruskali fertilizers via Lithuania after the termination of its contract with Belarus’ potash giant on February 1.
Neither freight transportation companies nor intermediaries which could in theory organize Belaruskali fertilizer shipments using LTG’s wagons have made any inquiries to the state-owned railway group so far.
LTG provided the information to BNS after the government earlier this week ordered its contract with Belaruskali on the transit of 11 million tons of potash through Lithuania per year to be terminated on February 1.
Karolis Sankovski, CEO of LTG Infra, LTG’s infrastructure subsidiary, told BNS that the capacity of the public railway infrastructure from the Belarusian border to Klaipeda is currently allocated only for the state-owned railway group’s companies.
Last December, LTG Infra for the first time allocated some capacity in congested railway sections to two privately-owned companies: Gargzdu Gelezinkelis and LGC Cargo.
However, the CEOs of both companies then told BNS that they had not received all the requested capacity and would not be able to transport freight from the border with Belarus to the seaport of Klaipeda.
Tomas Kersis, director of the Lithuanian Association of Railway Companies and logistics manager at LGC Cargo, told BNS earlier that privately-owned Lithuanian carriers were ruling out the possibility of shipping potash fertilizers because of a lack of capacity and certain technical obstacles.
LTG’s acting CEO Egidijus Lazauskas also said that LTG Cargo, the group’s freight transportation subsidiary, had received no inquiries from freight forwarders or other companies about the possibility of transporting potash fertilizers.
“LTG Cargo has not yet received any inquiries about fertilizer shipments,” he said.
Transport Minister Marius Skuodis said on Wednesday that there was no guarantee that the transport of Belarusian fertilizers through Lithuania would stop in February, because at least two out of the 10 licensed companies could take over fertilizer transit shipments, and freight forwarders and many other legal entities could also order the freight to be shipped.
LTG LOOKING FOR WAYS TO REPAY PREPAYMENTS
According to Lazauskas, Belaruskali will soon be informed in writing of the government’s decision to terminate the contract on February 1.
In his words, LTG will stop providing services to the Belarusian company on that date as well.
Belaruskali product shipments via Lithuania did not stop after the US sanctions came into force on December 8, because the Belarusian company had made an advance payment to LTG, sufficient to cover the cost of rail services up to March.
Lazauskas told BNS that LTG is currently looking at how to repay the remaining balance of the advanced payment.
The acting CEO did not disclose the amount, but he told the parliament on Wednesday that LTG provided 6 million to 7 million euros’ worth of services to Belaruskali last November.
Lazauskas would not comment on whether LTG has received any warnings from the Belarusian company about a possible lawsuit.
“We have received written notifications from Belaruskali. I cannot comment on their content due to the sensitivity of the topic,” he told BNS when asked whether the company had received any notifications from the Belarusian producer about its intentions to turn to international arbitration.
Mantas Bartuska, LTG’s former CEO, has said that the company would face hundreds of millions of euros in lawsuits and even bankruptcy if terminated its contract with Belaruskali.
According to Lazauskas, Belaruskali product shipments generated just over 60 million euros in annual revenue to the state-owned railway group.
“Thus, that would be our annual revenue loss,” he said.
Belaruskali fertilizers account for between one-fourth and one-fifth of the group’s overall freight traffic.
LTG Cargo shipped around 53 million tons of freight in 2020 and generated 397 million euros in revenue in total in 2020.