The volume of rail freight in Latvia has decreased by 32.9% in the first two months of 2025, compared to the same period in 2024, reaching 1.49 million tons. This decline is a continuation of a trend that started earlier, in 2020, when the Russian strategy of diverting transit traffic away from unfriendly countries began to show its effects.
According to the Latvian Railway (LDz), the company’s revenue in 2024 was 233.738 million euros, a 11.3% decrease from the previous year. The company’s losses in 2024 were 35.5 million euros and in the 2023-2024 period, the loss was 47 million euros, which had to be covered by the taxpayer.
Some influential individuals in Latvia are now asking whether the country really needs a railway at all. Girts Rungainis, an investment banker, suggests that a significant part of the tracks in the eastern part of the country should be dismantled and the main line should be left intact, but not the part that incurs significant losses and subsidies.
Guntars Vitol, an entrepreneur, proposes that the state should decide whether it is willing to spend an additional 90 million euros annually from the budget for the maintenance of the Latvian railway system or if it would be more cost-effective to dismantle part of the infrastructure and save money, especially considering that the Rail Baltica line, which is expected to be unprofitable, will also require maintenance in the future.
Juris Kanels, the rector of the Riga Institute of Transport and Communication, notes that the railway tracks in Latvia have already been significantly reduced and what remains is the minimum necessary for the country’s existence and the handling of international goods and passenger traffic.
Kaspars Briks, a former transport minister, suggests that the railway should focus on passenger traffic and not be dismantled. He also believes that new cargo can be attracted, for example, from Kazakhstan and that military cargo can be transported for “western partners” settling in the Baltics. Plans are also being made to develop so-called dry ports – intermodal terminals, far from the sea (for example, in the northern part of the Vidzeme region and in Latgale) – primarily near grain silos. According to Briks, negotiations are underway with Latvian agricultural cooperatives to motivate them to use the railway more for the export of grain to the ports.
Latvia is also still trying to revive the European railway project Rail Baltica, which was started 12 years ago and was supposed to connect Poland to the north through Lithuania, Latvia and Estonia. In 2024, the clouds of uncertainty lifted, revealing that the Baltic states had squandered the EU funds allocated for the project. The total cost of the project was initially estimated at 5.8 billion euros, but