(repeats story unchanged)
* Rail freight volumes from Russia to Latvia drop sharply:
* Russian railways says no new restrictions
* Official, some customers see political motives
* Latvian Prime Minister says that is "speculation"
By Gleb Stolyarov, Natalia Chumakova and Gederts Gelzis
MOSCOW/RIGA, May 23 Russia's state-owned railway
monopoly is refusing most requests to take cargo from Russia to
ports in Latvia, industry executives said, a serious blow to the
Baltic state which depends on the transit trade.
The monopoly, Russian Railways (RZhD), has in many cases
offered no explanation to customers for turning down the
cargoes, mostly oil products, fertiliser, coal and metals which
had previously been transported relatively easily by rail to
Latvia, nine people familiar with the situation told Reuters.
Asked for comment, RZhD said it had not introduced any
restrictions on transporting freight to Latvia, and that it
looks at each request to transport freight on its own merits.
Russia has a long history of testy political relations with
Latvia, a former Soviet republic now in the European Union.
Several of the sources, and a Latvian local official, said
they suspected Russia was hindering the cargoes in retaliation
for Latvia snubbing a Russian-led pipeline project, although
they offered no direct evidence.
Latvia is among several eastern European states opposing
Nord Stream 2, a Russian-led initiative to build a new gas
pipeline under the Baltic Sea to Germany. Latvian media said the
project's backers had wanted to use Latvia's port infrastructure
to help develop the pipeline.
Internal Russian Railways data, provided to Reuters by
logistics firms, point to a 90 percent drop in the volume of
metals, coal and oil products transported by rail from Russia to
the Latvian ports of Riga and Ventspils. None of the other
Nordstream opponents have reported such changes.
The volume of goods usually falls in the second quarter
because some freight is diverted from Latvia to northern Russian
ports, where costs fall in the spring once the sea ice has
But the industry sources who spoke to Reuters said the drop
was much sharper this year and was being driven in large part by
RZhD refusing to take the cargoes.
In the first half of May 45,700 tonnes were transported by
rail from Russia to the Latvian ports of Riga and Ventspils,
while for the full month of April the total was 750,000 tonnes,
compared with 1.2 million tonnes for March, the data showed.
Russian Railways said in its statement: "RZhD has not
introduced any restrictions on transport to Latvia, you have to
look at each concrete case where despatch has been declined."
Latvian Prime Minister Maris Kucinskis told Reuters he had
no evidence that the decline in freight was linked to his
government's opposition to Nord Stream 2. "At the moment I see
it as speculation," he said.
Russia's foreign, energy and transport ministries did not
respond to requests for comment.
CARGOES TURNED DOWN
The Reuters sources included people from three companies
which send their goods via rail, two traders, and four
executives at logistics companies that send freight via rail for
their clients. All spoke on condition of anonymity because of
the sensitivity of the situation.
They said that RZhD had been accepting orders for taking
freight to Latvia without problems at the start of the year, but
that when additional orders were submitted in March and April,
they started receiving refusals.
The rate of refusals accelerated in May, the sources said.
They said that RZhD either offered no explanation at all, or
cited repair work on the tracks as the reason for declining the
"Now they are taking orders for (transporting) coal and
fertiliser for only 10 percent of the requested volumes," said
one of the sources, who works for a logistics company.
Another source, a trader, said of the disruption to freight:
"It's all very serious ... No one knows how long it's going to
go on for, or what to do about it."
The sources said the requests that RZhD was rejecting came
from long-standing customers and were identical to requests that
the railways monopoly had in the past approved.
RZhD is wholly-owned by the Russian state and its chief
executive is Oleg Belozyorov, a former deputy transport minister
in the Russian government. He was born in Latvia, which at the
time was a Soviet republic and which still has a substantial
Edgars Suna, director of the marketing department at Riga
port, told Reuters the flow of cargoes of coal, oil products and
fertiliser reaching the terminal by rail from Russia had fallen
by around half since mid-April.
Speaking earlier this month, the mayor of the Latvian port
city of Ventspils said he expected Russia to reduce freight
volumes in response to Latvia's decision to oppose Nord Stream.
"Russia will certainly react," the mayor, Aivars Lembergs, told
a news conference.
Rail freight was worth 263 million euros ($294.67 million)
to the Latvian economy in 2016, according to the central bank,
or about 1 percent of gross domestic product.
Swedbank, in a research note last year, said that falls in
Russian freight flows, which it said account for 80 percent of
all rail transit in Latvia, could impede the country's economic
($1 = 0.8925 euros)
(Additional reporting by Anastasiya Lyrchikova in Moscow and
Natalya Shurmina in Yekaterinburg; Writing by Christian Lowe;
Editing by Philippa Fletcher)