Rail transport is one of the most promising land transport modes in terms of both safety and ecology. It plays an important role in the Latvian economy. Of the total volume of land transport in the country, the share of rail freight transport is about 39%, but passenger transport - 7%, but in the suburban region of Riga it reaches 35%. In the structure of rail freight transport, 85% is transit transport, mainly from Russia and Belarus to Latvian ports (East-West transit corridor), domestic transport is about 11%, which can be explained by relatively short transport distances.
The railway infrastructure for public use is developed in accordance with the needs of the national economy and its manager is the state-founded joint stock company “Latvijas dzelzceļš”. In order to develop the infrastructure and increase the level of safety, several projects are being implemented, which are financed from the European Union funds together with co-financing from the state budget. Modernization of electrified railway lines is planned in the future.
In order to ensure equal and non-discriminatory access to the infrastructure for all carriers, JSC “LatRailNet” has been established, which performs the essential functions of the infrastructure manager: allocation of railway infrastructure capacity and setting charges for the use of railway infrastructure.
By liberalizing the sector in accordance with the European railway development policy, in addition to SJSC “Latvijas dzelzceļš” subsidiary JSC “LDZ Cargo”, two private capital companies have been successfully operating in the freight transportation market for several years - JSC “Baltijas ekspresis” and JSC “Baltijas tranzīta serviss”, transporting 20% of the total volume, which is one of the highest in Europe. Local passenger transportation is performed by JSC "Pasažieru vilciens" and JSC "Gulbenes – Alūksnes bānītis". In order for passenger trains to become modern, comfortable and efficient, they are being modernized and the purchase of new trains is planned, attracting financial resources from the Cohesion Fund and the state budget.
International rail passenger services are currently provided to Russia, Belarus and Ukraine. JSC “LDZ Cargo” provides international passenger transportation services, offering to passengers trips to Moscow and St. Petersburg. Traffic with Minsk is provided by the Minsk-Riga train of the Belarusian railway formation. On September 28, 2018, the international passenger train of the Ukrainian railway formation started running from Kiev to Riga via Minsk and Vilnius. In international passenger traffic, the passenger train Vilnius-Daugavpils-Vilnius is provided by the Lithuanian State Railway Company “Lietuvos geležinkeliai” on Saturdays and Sundays from 13 January 2018.
The legal framework for the railway sector has been harmonized with European Union law and in practice the requirements regarding the liberalization of the railway transport market, public administration and traffic safety have been fulfilled. Currently, specialists and industry experts of the Railway Department, the State Railway Administration and the State Railway Technical Inspectorate, as well as the Transport Accident and Incident Investigation Bureau are actively working in working groups of the Council of the European Union, the European Commission and the European Railway Agency, so that Latvia's interests are reflected in the forthcoming legal acts of the European Union.