Special obligations are functions that a state-owned enterprise (SOE) would not undertake to perform on a commercial basis (or would do so at a price higher than the fixed price) and that are entrusted to it by a state decision.
The list of specific obligations to be carried out by SOEs and their subsidiaries was adopted on 16 March 2021. Order No 4-193 of the Minister of Economy and Innovation of the Republic of Lithuania (link).
LTG Link UAB performs the special obligation - public passenger transport by rail. In December 2022, a long-term outsourcing and financing (PSO) contract was signed with the Government for a period of 10 years (2023-2032). The average annual amount of co-financing for passenger transport will be EUR 40 million. Public passenger transport services are fully financed, covering all losses incurred in this activity.
The purpose of the special obligation is to provide public passenger transport services by rail and/or public combined passenger transport services on local transport routes.
The legislation which confers this special obligation on the state enterprises is Article 12 of the Railway Transport Code of the Republic of Lithuania.
Legislation defining the conditions for fulfilling this special obligation - Article 12(9) of the Railway Transport Code of the Republic of Lithuania, which implements Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on public passenger transport services by rail and by road and repealing Council Regulations (EEC) No 1191/69 and (EEC) No 1107/70, as amended by Regulation (EU) No 2016/2338 of the European Parliament and of the Council of 14 December 2016, as well as Resolution of the Government of the Republic of Lithuania No 716 "On Approval of the Description of Procedures for Compensation of Losses Incurred in the Execution of a Public Service Obligation" and amendments thereto.
Legislation regulating tariffs - Article 34(1) of the Law on Railway Transport of the Republic of Lithuania.
The function is subject to the State budget allocation in accordance with the provisions of the Law of 29.12.2022. The contract on the provision and financing of public passenger rail transport services and/or public combined passenger transport services on local lines concluded between the Ministry of Transport and Communications of the Republic of Lithuania and LTG Link UAB, and the contract on the use of state budget funds allocated for the implementation of the programme "Implementation of Transport and Communications Policy" concluded annually between the Ministry of Transport and Communications of the Republic of Lithuania and LTG Link UAB.
The funds for special obligations are foreseen until 2025:
State budget funds allocated to LTG Link UAB - EUR 50.4 million, of which
- EUR 8.8 million to finance passenger transport services on preferential terms;
- EUR 41.6 million to cover operating losses in passenger transport on established national and international routes within the territory of the Republic of Lithuania.
More detailed information on the state budget allocations for the special obligations can be found in the Strategic Operational Plan 2025-2027 of the Ministry of Transport and Communications of the Republic of Lithuania, which can be found at the following link.
The results of the Special Obligations in 2024 are presented in the Annual Management Report 2024 of LTG Link UAB.
