On 4 July 2007 the reorganization of the Latvian Railway (LDz) was filed in the Register of Enterprise of the Republic of Latvia.
With this the reorganization of LDz has been completed. It was already started up in 1999 but in the final stage was directed in compliance with the Cabinet of Ministers protocol decision (dated 10 May 2005) On the restructuring of Latvijas dzelzceļš. LDz Restructuring supervisory committee on the implementation, constituted by the Ministry of Transport, with its chairman Ainārs Šlesers, the Minister of Transport, and LDz Restructuring working group along with the advisory company Ernst&Young Baltic Ltd. drew up the new LDz business model and carried out the organizational arrangements to implement it.
The restructuring and reorganization of such a big company like the Latvian Railway in fact means a considerable alteration of all the economic sector structures, though there is no visible indication of this process.
If up to now the basis of LDz business was the organization of transportation, then after reorganization the principal activity of LDz business is the realization of public use infrastructure services, as well as the maintenance and development of the railway tracks in this respect to ensure the transportation business is available to everyone in order to become a railway carrier and complies with the defined legal requirements of the EU and the Republic of Latvia.
The restructuring does not mean only organizational arrangements. It required and will require the change in the attitude from both the practical workers and the managerial staff. The management of the new concern is not possible anymore with the methods that were used to manage the former unitary company. Therefore, the changes have been made also in the personnel management. Both LDz and its subsidiary companies have their own place and role in the development and the activity of the new railway transport system. Each of them has to be responsible for its own business sector to make the system work successfully. Therefore, the aim of the managerial staff is to ensure competitive activity of the whole system in the transport sector in general.
The State Joint-stock Company Latvijas dzelzceļš as a holding company is a railway infrastructure manager, which ensures the basic and supplementary services of infrastructure for all the carriers on an equal footing, as well as manages the subsidiary companies.
As a result of the reorganization, the requirements of the EU directives on the liberalized market in the railway sector are fulfilled; the maintenance of the railway infrastructure and the distribution of capacity are separated from the transportation on the public use railway. LDz reorganization fully ensures the transparency in the finances due to the clearly defined work, responsibility and the expenses of activities.
Along with four already existing LDz subsidiary companies SJC Pasažieru vilciens, SJC Starptautiskie pasažieru pārvadājumi, SJC VRC Zasulauksand Dzelzceļa apsardze Ltd. another three subsidiary companies LDz Infrastruktūra Ltd., LDz Cargo Ltd. and LDz Ritošā sastāva serviss Ltd. start unaffiliated activities from 4 July 2007.
LDz Cargo Ltd. is responsible for domestic and international freight traffic and the related supplementary services, as well as logistics services.
LDz Infrastruktūra Ltd. will perform the railway track construction, thorough repairs and other related modernization works mainly by LDz order.
LDz Ritošā sastāva serviss Ltd. will perform the railway rolling stock repairs, maintenance and equipping, as well as will be responsible for fuel storage and its distribution to the carriers. The services will be available to all the carriers and the owners of the rolling stock.
The reorganization process was carried out in compliance with the requirements of Commercial Law and Labour Law of the Republic of Latvia. The interests of LDz creditors, who had to register their possible claims against LDz reorganization at the appointed time, were maintained. At the moment of registration there were no claims against LDz.
The labour and social interests of LDz employees were maintained in the reorganization process, and the standards of Labour Law and Collective Labour Agreement were observed.