Construction, EU – Baltic States, Legislation, Lithuania, Railways, Transport

The group, owned by businessman Oleg Ossinovski, says Lithuanian authorities are seeking to eliminate its companies – Skinest Baltija and Vitras-S – from the market, which violates the EU's fundamental legal principles. 

"Such means are protectionist in favor of national entities," because local bidders, including LG subsidiaries, usually benefit from the exclusion of the Skinest companies from public procurement procedures, Skinest Baltija CEO Valdas Rasimas said.

According to Rasimas, Lithuania's system for vetting planned deals by strategic companies caught the European Commission's attention back in 2012 as potentially restricting the free movement of capital. 

"The system creates the illusion of an objective assessment and a civilized solution to problems, but it is a death sentence for any company that is not cleared by the governmental commission," he said. 

Skinest Grupp was effectively removed from LG's public procurement procedures last year after the governmental commission vetting deals by strategic enterprises and the government did not allow the state railway company to sign contracts with the Estonian group. 

The government said in a resolution in June 2018 that Skinest Rail's owner Oleg Ossinovski "maintains relations with institutions of foreign states or natural or legal persons from those states which increase the risk or pose a threat to national security".

Skinest contested the conclusion in Lithuanian courts, but its appeals were dismissed this year.  

In August, Skinest filed a complaint with the European Commission against LG over non-public procurement procedures by its subsidiaries – LG Cargo, Gelezinkeliu Tiesimo Centras (GTC) and Vilniaus Lokomotyvu Remonto Depas (VLRD), and over suspected state aid to these companies.