Quality of public long-distance transportation services

• The amendments to the Road Transport Code, which entered into force on 1 July 2023, created the formal conditions for carriers to enter the market freely, but did not increase competition, improve the quality of transport services for passengers, or have any impact on the increase in passenger flows.
• State compensation to carriers for concessions amounts to EUR 9.8 million, but there is a lack of objective means to verify the data provided by carriers on the basis of which compensation is paid.

"To ensure competition among carriers and to improve the quality of long-distance passenger transport, amendments to the Road Transport Code have been adopted, but no analysis has been carried out on the most appropriate and cost-effective solutions that could be applied in the country," said Auditor General Mindaugas Macijauskas, presenting the results of the National Audit Office's assessment of "Quality of Public Long-Distance Transportation Services".

Despite government efforts to improve the quality of public long-distance transportation services through legal regulation, there is a lack of competition between carriers that could lead to higher service quality or lower prices. The number of people using these services is not increasing, the system of compensation for concessions to carriers has no objective means of verifying the data provided by carriers, and there is no quality standard defining the quality of service to be achieved.

Changes to the long-distance transportation system were initiated in 2020 after the Competition Council found that contracts with long-distance carriers were awarded in breach of competition procedures. The amendments to the Road Transport Code, which entered into force on 1 July 2023, aimed at increasing competition between long-distance passenger carriers and improving accessibility and quality of service. The assessment showed that the changes to the long-distance transportation system did not lead to greater competition between carriers and better accessibility of services, with the market dominated by two large carriers, whose market share increased from 43% (2019) to 57% (2023).

Although the amendments to the Road Transport Code aimed to increase the number of public transport passengers to 6 million per year, this figure will be 4.8 million in 2023, the same as the year before. Only 5.7% of the population in Lithuania uses public transport to travel around the country, one of the lowest rates in the EU (EU average: 7.4%), but it is the leading country in terms of the share of car users (88%, compared to an EU average of 72%).

The State compensates carriers for the loss of income due to long-distance concessions for various social groups. This is done without verifying the accuracy of the data. The amount of compensation to carriers from the State budget for these concessions ranged from EUR 4.6 million (2021) to EUR 9.8 million (2023). In 2023, the amount of compensation was above the pre-pandemic level, even though one million fewer concessionary tickets were sold (2.1 million tickets in 2023, 3.1 million in 2019, and EUR 9.5 million for compensation). It is important to underline that the reason for the rising costs is attributed to rising fares, but since 2009, no public authority has been involved in setting or modifying the maximum fares for transport services, although the fare reimbursed by the public budget depends on them.

Public passenger transport services are important for regional development, providing people with access to other essential services such as education and healthcare, and providing access to jobs concentrated in cities. A third of the municipalities surveyed say that the availability of public long-distance transportation services for their population has deteriorated since 1 July 2023 and that some of the routes are not served. There is also a lack of preparation for public long-distance transportation services that could be provided where commercial services are not available.