VILNIUS, May 16 (Xinhua) -- The Lithuanian government decided on Wednesday to reorganize Lietuvos Gelezinkeliai (LG), the country's state-run railway company, splitting it into three separate enterprises.
The government approved the amendments to the Railway Transport Code which provides for separation of Lithuanian Railways into three companies, a manager of railroad infrastructure, a carrier of passengers and a carrier of freight.
The three companies will be managed by a holding state-run company LG, Lithuania's Ministry of Transport and Communications said in a statement.
"The decision to implement a new model of LG operations was adopted with respect to the best international expertise. The strategic Lithuanian company will undoubtedly remain in the hands of the state, yet it will become more transparent, financially stable and easier to handle," Rokas Masiulis, Lithuania's minister of transport, was quoted as saying in the statement.
In his words, the reform would depoliticize the enterprise and possibly increase the company's return to the state. However, the minister admitted that the activities of passenger carriage are like to be making a loss.
"The passenger carrier will likely remain loss-making and will have to be covered by other railway operations," Masiulis told reporters.
While drafting the reorganization plan, the government followed an example of commercially successful German Railway reform, the ministry said in a statement.
"The planned changes support our long-term ambition to create a modern and efficient group of companies, oriented at sustainable growth. We plan to further increase the group's competitiveness and implement advanced business management and transparency standards," said Mantas Bartuska, CEO of Lietuvos Gelezinkeliai.
The three enterprises will be established by September 1, 2019, with holding company LG to control 100 percent of each company's stocks. The LG holding company will be 100 percent controlled by Lithuania's state. The reorganized railway group is expected to start operating by December 2019.
The reform and corresponding legislation is yet to be approved by the Lithuanian parliament.
The assets of LG amounted to 2.07 billion euros (2.44 billion U.S. dollars) in the first half of 2017, the company stated on its website.
