2002 Year Report

CONTENT REPORT FROM THE DIRECTOR GENERAL 2 ADMINISTRATIVE STRUCTURE OF LDZ 4 STRATEGIC DEVELOPMENT 6 PERSONNEL 10 FREIGHT SHIPMENTS 13 PASSENGER SERVICE 19 INFRASTRUCTURE 20 RAIL TRAFFIC SAFETY 22 QUALITY MANAGEMENT AND ENVIRONMENTAL PROTECTION 24 ROLLING STOCK REPAIR ENTERPRISES 25 REAL ESTATE 26 INFORMATION TECHNOLOGIES 28 INTERNATIONAL CO-OPERATION 31 FINANCIAL STATEMENT 34 In the reporting period considerable attention was paid to the professional development and social stability of the employees, thus promoting further economic growth of the company. REPORT FROM THE DIRECTOR GENERAL WORK IS DONE WELL 9.8%, but the total number of passengers and diesel train carriages is a proof of that. 3.1 using domestic and international railway million lats were made available by the state to 2002 was a special year for the history of the transport was almost 22 million. repair the rolling stock of passenger trains. The State Joint Stock Company Latvijas dzelzce¬ß national policy in the area of railway transport – evaluation of the results of financial and RESTRUCTURING IN PROGRESS is changing gradually, with more respect for economic activity confirms the fact that this the provisions of the Railway Law. year has been the most successful one during In 2002, restructuring of Latvian Railway In 2002, major changes were introduced in the last ten years. continued, approaching to its goal – one of the most significant railway junctions It should be particularly noted that the good establishment of a holding company. in Latvia – Daugavpils, where the centres of results are the common achievement of all Economic and social philosophy of structural units for the repair of locomotives, our employees based on self-denying work. restructuring aims at the following: freight cars, track and track machines were The hard work has resulted in rhythmic • to ensure the competitiveness of the com- concentrated. With the aim of improving freight shipments, regular passenger pany in rail transit shipments; professional skills of the employees, the services, safe train traffic and the leading • to guarantee train traffic safety; branch of Latvian Railway Training centre position in transit shipments. • to develop the system of social security of was established and a training class of During the reporting period, 40.1 million the employees adequate for the locomotive crews arranged in Daugavpils, tons of freight were shipped which is 5.8% conditions of market economy. the latter being presently the most up-to- more than in 2001. As a result, the date in the Baltic States. railwaymen were awarded premia for the During the report period, complicated good performance. In total, 2.6 million lats restructuring problems were dealt with, REGULAR INVESTMENTS – were paid as premia. Profit and liquidity including the development of information GUARANTEE FOR THE FUTURE ratios of the company in 2002 were good, as technologies, drafting environmental well, enabling investment of more resources protection policy of the emerging holding Financial memoranda on the financing of four into the railway development. company, increasing traffic safety and Latvian Railway projects from the ISPA The fact that we are still one of the biggest improving personnel policy. Proposals with funding were signed between the European taxpayers in Latvia is a great satisfaction. regard to amendments to laws and Commission and the Republic of Latvia, More than 28 million lats were transferred to regulations were prepared in order to providing for the investment of 150.9 million the state budget in the form of taxes and harmonise the national legislation in the sector EUR into the development of railway other payments. of railway transport with the EU directives. infrastructure, the most part of the resources The socially significant passenger services in The first subsidiary enterprise of Latvian being a grant. This fact is an evidence for our the domestic railway traffic were provided in Railway – PasaΩieru vilciens (Passenger train) ability to develop projects of good quality and a fair way, still subsidized by the income successfully passed the first year of to implement them in an appropriate way. from freight shipments. The number of independent activity. The increasing number Competition in the transit shipment market passengers in domestic traffic increased by of passengers, modernisation of 62 electric requires continuous availability of efficient, 2 LATVIAN RAILWAY 2002 ANNUAL REPORT REPORT FROM THE DIRECTOR GENERAL precise and comprehensive information at the salaries. The average salary of the persons and Bulgaria, the Transsiberian Transportation disposal of the company management. employed in the basic activity of Latvian Council for International Co-ordination and Therefore implementation of the SAP project – Railway in the reporting period increased by other international organisations. introduction of the joint financial and economic 11.9% and amounted 212.1 lats per month. In 2002, the railway companies of the Baltic information system – was commenced in 2002. We are going to raise the salaries of all the States presented a joint project The Baltic This system, into which 2.2 million lats were staff categories in 2003, as well. Product to the Ministry of Railway Transport invested, shall be introduced in all Latvian An agreement on an extended health insurance of the Russian Federation, providing for Railway structural units by the end of 2003. package was signed with the insurance company container and contrailer freight shipments. ERGO-Latvija, resulting in the increased insurance On 2 September 2002, Latvian Railway PRIORITY – SOCIAL SECURITY premia and the number of services provided. signed a contract with the Ministry of Additional insurance of pensions was granted to Railway Transport of the Russian Federation Considerable attention in the reporting more than 200 specialists working under high- on the collaboration in the establishment of period was paid to the professional risk conditions (engine drivers and their assistants, intercommunication agencies. development and social stability of the contact network fitters, dispatchers, freight train The dialogue approach to international colla- employees, since in this way further conductors and compilers, shunting station boration has provided good results for Latvian economic growth of the company, provision workers). Railway. Our workers have demonstrated them- of qualitative services and favourable social selves as reliable partners able of working today climate among the employees are promoted. LATVIAN RAILWAY – and knowing how to do that tomorrow. On 8 March 2002, General Agreement in COMPETITOR AND PARTNER Railway Branch was signed between the On behalf of the Board of the Joint Latvian Railwaymen Trade Union and the In order to be a successful competitor in the Stock Company Latvijas dzelzce¬ß, I managers of five major companies of the business of transit traffic, the activity of express my gratitude to each of the branch, representing Latvian Railway, Joint collaboration partners shall be based on a numerous workers for the successful Stock Companies PasaΩieru vilciens and common transport technology. Latvian performance, and to our collaboration Lokomotîve, as well as L-Ekspresis Ltd. and Railway has effectively put this principle into partners and clients – for loyalty. Ëdensneséjs Ltd., introducing radical practice, thoroughly maintaining and changes with regard to relations between the modernising the infrastructure of the East- employer and the employee. This General West transit corridor and keeping up Agreement provides for equal social security constructive dialogue with railway companies Andris Zorgevics for anybody employed in railway industry, of other countries. In 2002, we took an active notwithstanding the status of the company. part in the activities of the International Union Chairman of the Board, Taking into account the requirements of the of Railways (UIC), the Organisation for Director General of the Latvian Railwaymen Trade Union, one of the Railways Cooperation (OSJD), the Railway State Joint Stock Company priorities of the company is to raise the Transport Council of the CIS, the Baltic States Latvijas dzelzce¬ß LATVIAN RAILWAY 2002 ANNUAL REPORT 3 ADMINISTRATIVE STRUCTURE OF LDZ Representative of state capital shareholder Council Board Chairman of the Board, Director General Senior Vice Chairman, Vice Chairman, Vice Chairman, First Deputy Director General Deputy Director General Deputy Director General Council of Directors Passenger Rolling Stock Legal Division Personnel Economic Director Finance Director Strategic Develop- Service Director Director ment Director Director Public Relations Personnel Laboratory of Division Deputy Work Or- Methodology Division of Passenger Administration Strategic deve- Complex Economic ganisation Division Traffic Division lopment Control Director and Payroll Regulations Measurements Technical Division and Tariff Personnel Inspection Marketing Division Development Finance Planning and Adverti- Technical Division Economic and Forecasting Division Division sing Sector Passenger Division External Relations Traffic Division Training Centre Management Rolling Stock SAP unit Documentation Division Repair Division Summary Reports Centre Secretarial Office Division Chemical Capital Internal Audit Accounting Laboratory Construction Train Traffic Division Division Division Management centre Security Maintenance and Quality Assu- Division Supply Division rance

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