TRADE UNITES, POLITICS DIVIDES.

We're going to sever a railway link.  And Latvia is going to pay for it.

Not so fast: the Lithuanians only hurt themselves.

State railway Lietuvos Gelezinkeliai expects to start work shortly on reinstating the 19 km cross-border railway from Mazeikiai to Renge in Latvia, Managing Director Mantas Bartuska announced on October 18.

Earlier this month the European Commission fined LG €27·9m for dismantling the line in 2008, on the grounds that this had hindered competition in the freight market by limiting the ability of other potential operators to serve Orlen’s refinery. It was also ordered to ‘bring the infringement to an end’, which Competition Commissioner Margrethe Vestager suggested during a recent visit to Lithuania could best be solved by reinstating the line.

It appears as if the Lithuanian railroad didn't want to short-haul itself on shipments of refined product to ports at Ventsplis and Riga in Latvia.  The article doesn't mention any Lithuanian ports, which would provide the most effective way for the railroad to keep the line haul to itself, although there are lots of possibilities for railroads and shipping lines to tweak rates such that long-distance rates are equal from origin to destination no matter the routing, the port, or the modal split.

Asked about the possibility of Latvian operator LDz Cargo, the port of Riga and Orlen lodging claims for compensation, Bartuska told local media that these could not be ruled out, although he did not think there were substantial grounds. LG was already in negotiation with Orlen in an effort to avoid litigation, and expected to speak to the Latvians soon.

LDz spokesman Maris Ozols said the railway was still assessing the potential loss caused by the breaching of the line. While it did not rule out seeking compensation from LG, its priority was to get the link reopened as soon as possible, he insisted.

Somewhere Cornelius Vanderbilt and Thomas Scott are sharing a cigar and a smile.