General information about the Charging Scheme

The infrastructure manager, in accordance with the method of cost allocation, from its total costs of/to the minimum access package and to the access to railway infrastructure connecting service facilities allocates to freight and passenger service groups the full costs necessary to ensure common access rights throughout the railway infrastructure using the cost drivers referred to in Annex 1.

Average network-wide direct costs of the infrastructure are calculated as a difference between  the full costs of every cost parameter referred to in Annex 1 to the Charging Scheme within freight and passenger service groups and the costs included in the full costs of every cost parameter which according to Regulation 2015/909 are considered ineligible.

LRN determines average network-wide direct costs and infrastructure charge mark-ups in particular market segment(s) for every cost parameter, thus providing multi-parameter access infrastructure charges (without value added tax) for various performance indicator units:

(a) M ceļ uztur gr s – EUR / train kilometer

(b) M mez uztur gr s – EUR / wagon

(c) M atj gr s – EUR / gross ton kilometer

(d) M elektr gr s – EUR / train kilometer

(e) M bfv gr s – EUR / train path

The existing market segmentation is based on the impact of different types of utilisation of the infrastructure on the costs of the infrastructure, on the productivity increase achieved by railway undertakings, or on the impact of the allowable infrastructure charge mark-up value on the competitiveness of the final consumer market.

Not later than four months before the deadline for the publication of the network statement, applicants may provide the evidence that, within the existing market segments in the foreseen market conditions in the programming period, the criteria and their values laid down in the Charging Scheme are not equivalent for different types of utilisation of the railway infrastructure, the market cannot bear the existing infrastructure charge, or there are particular market segments which railway undertakings are not currently operating but may provide services in.

The criteria for market segmentation are described in detail in Annex 3 to the Charging Scheme.

According to Annex 5 to the Charging Scheme, the list of market segments in force includes the following market segments:

(1) Passenger services:

(a) passenger services within the framework of a public service contract (within wide gauge network);

(b) passenger services within the framework of a public service contract (within narrow-gauge network);

(c) international passenger services within the European Economic Area;

(d) other passenger services (within wide gauge network);

(e) other passenger services (within narrow-gauge network);

(2) Domestic freight transportation with collecting and pick-up trains:

(f) domestic freight services with collecting and pick-up trains;

(g) domestic grain freight services;

(h) domestic cement freight services;

(3) Freight services within domestic network and EEA

(i) multimodal freight services within domestic network and European Economic Area (without the use of node infrastructure);

(j) multimodal freight services within domestic network and European Economic Area;

(k) international freight services within the North Sea - Baltic rail freight corridor using pre-reserved train paths;

(l) building material delivery freight services for the construction of Rail Baltica infrastructure (without the use of node infrastructure);

(m) other freight services within domestic network and European Economic Area

LRN evaluates the relevance of the mark-ups within the market segments and also assesses the need for further distinguishing of market segments according to commodity or passengers transported, if:

(a) applicants in infrastructure capacity applications indicate specific conditions for utilization of the infrastructure that allow them to adapt to the final customers' preferences (obtaining additional competitive advantages) or to their own technological failures, and that causes the infrastructure manager’s costs which would otherwise be eliminated and cannot be included in the infrastructure charge;

(b) the infrastructure manager’s services improve the criteria of final customers' preferences compared to competing modes of transport and infrastructure networks;

(c) such environmental, accident and infrastructure costs can be observed that are not paid for by competing modes of transport and there is a decision of the Cabinet of Ministers (referred to in Article 11(11) of the Railway Law) on the assignment of compensation, its value and payment conditions.

LRN can apply the following charge differentiation tools:

Scarcity charge: reflects the scarcity of the infrastructure capacity in a specified part of the railway infrastructure during congestion periods.

Not applied at this moment.

Environmental charge: takes into account the costs of the environmental impact of train traffic.

Not applied at this moment.

Project charge: applied to specific investment projects that are not provided by the contractual agreement but increase efficiency or cost-effectiveness of applicants and if it could not otherwise be or have been achieved.

Not applied at this moment.

Discounts: two types of discount can be applied:

(1) a volume discount to a specific market segment if, during the programming period, the volume of traffic within a specific market segment exceeds the forecasted volume of train kilometers;

(2) a network loading optimization discount to a specific part of the infrastructure where it is determined that the demand for the infrastructure capacity does not reach the optimal load and where, based on efficient, transparent and non-discriminatory principles, it can be established that the discount can stimulate the usage of the infrastructure capacity.

Network performance charge: penalties for actions which disrupt the operation of the infrastructure, compensations to the infrastructure manager or railway undertakings which suffer losses from disruption and bonuses if a delay exceeds the delay thresholds laid down in the Network Performance Scheme and if delays have caused train delays for other railway undertakings.

At the moment the infrastructure manager records the information about the delays and their causes but doesn’t apply any payments for them.

General information about charging within international 1520 traffic

In order to fully cover the incurred costs, public-use railway infrastructure manager JSC "LatRailNet" can set higher charges for services related to freight transportation from or to the third countries with railway track gauge 1520 millimeters.

The infrastructure charges within international 1520 traffic are calculated by separating costs relevant to concrete transportation performance indicators from the total cost base. The costs within international 1520 traffic are calculated for every cost parameter as a multiplication of the costs of the parameter with the relevant performance indicator of train kilometers, number of wagons and gross ton kilometers within international 1520 traffic.
The infrastructure charges within international 1520 traffic are set as a two-component charge relevant to the travelled train kilometers and the number of trains. It includes the following costs:
(1) the maintenance, renewal and train operating costs of the railway infrastructure providing the minimum access package for one train kilometer travelled (maintenance and renewal component);
(2) the maintenance and train operating costs of the railway infrastructure providing access to the railway infrastructure connecting service facilities for providing transportation of one train  (node component).

In market segments with pre-assigned train paths, infrastructure charges are set as a combination of both cost components that is expressed as an average cost of the performance indicator unit of one train kilometer within the relevant market segment. Pre-assigned train paths are requested at least 15 days before the first date of the following calendar month, and the initial payment for the number of requested train paths is applied in the amount of 10% of the charge within the specific market segment. The final payment for the use of pre-assigned train paths is applied to the actual railway undertaking in the amount of 90% of the charge within the specific market segment.
Charge amount for every cost parameter within international 1520 traffic for every specific market segment is calculated by adding a specific market segment mark-up to the value of average direct costs. The mark-up is set according to the difference between the full and direct costs of the specific cost parameter multiplied by the market assessment coefficient (“market can bear'') that characterizes the allowable markup level within a specific market segment in the existing market situation. In full costs, the financing costs are replaced with a reasonable profit margin.

The node component charge for the railway infrastructure providing access to the railway infrastructure connecting service facilities is divided between the railway undertaking performing transportation in border regions (Daugavpils - Indra - national border, Rēzekne – Zilupe – national border, national border – Karsava – Rezekne, Daugavpils - Kurcums - national border, national border - Eglaine - Daugavpils) or through border stations (Meitene, Lugaži and Reņģe) and the next railway undertaking, if any, that continues the movement of the train set from stations Jelgava, Šķirotava, Rēzekne and Daugavpils, observing the proportion which is determined by JSC "LatRailNet" as a ratio between the total number of train kilometers in these border regions in the reference period and the total number of train kilometers in the other parts of the railway infrastructure network within international 1520 traffic in the reference period.

If in border regions the transportation on the behalf of railway undertakings registered in Latvia is performed by railway undertakings from the third countries without the contract on the use of the railway infrastructure, then the amount of charge in these regions is applied to the next railway undertaking that continues the movement of the train set from stations Rēzekne or Daugavpils, but, if more than one railway undertakings are involved in transportation, then the amount of charge is divided between the railway undertakings on behalf of which the transportation were performed, that is, the first undertaking that continues the movement from stations Rēzekne and Daugavpils issues invoices to the other railway undertakings corresponding to the proportion of the number of the railway undertaking’s wagons in a specific train and the corresponding settlements are mutually made.

Applicants and the infrastructure manager not later than four months before the deadline of the publication of the railway infrastructure charges submit the evidence to JSC "LatRailNet" that the valuation criteria for different types of infrastructure utilization are not equal, the market conditions do not provide for covering the existing infrastructure charges, or specific market segments exist where railway undertakings are not operating at the given moment, but can provide services in. JSC "LatRailNet" assesses the necessity for the division of services into smaller market segments according to the cargo transported or in line with the criteria listed in Annex 3 to the Charging Scheme.

At the moment services within international 1520 traffic are divided into the following market segments:

(o) multimodal freight services within international 1520 traffic;

(n) coal freight services within international 1520 traffic;

(p) other international 1520 traffic freight services.

Payment conditions within international 1520 traffic are applied observing the principles for freight transportation included in the Charging Scheme, but using charge components determined for international 1520 traffic and relevant performance indicators of train kilometers and number of trains
LRN publishes Annex 6 to the Charging Scheme about charge calculation and payment conditions within international 1520 traffic on its website on the internet at least two months before the relevant railway infrastructure charges enter into force and it is not included in the railway infrastructure network statement.