The Road Administration to Become a Joint-Stock Company in a Year and a Half
On Wednesday, the Cabinet of Ministers approved the recommendation of the Ministry of Transport and Communications to reorganise SE Lithuanian Road Administration (LRA) from a state enterprise into a joint-stock company. Such reorganisation is expected to increase the efficiency of the company‘s operations, speed up project implementation and enable the application of the highest corporative governance standards.
“The Road Administration shall increase the efficiency and quality of its operations and the speed of decision making, shall implement projects faster and respond more quickly to the problems posed by stakeholders. The reorganisation of the enterprise into a joint-stock company will not only provide more flexibility, but will also open up the possibility to better adapt to the changing state road maintenance and development market. Moreover, such reorganisation will also bring benefit to the State through less administrative burden on the enterprise and its asset management, commercial opportunities, consistently increasing return on equity, strong role of the board and clear responsibility, transparency and openness,” the Minister of Transport and Communications Marius Skuodis says.
According to the Minister, the legal form of a joint-stock company will enable the enterprise to attract more various forms of capital and investments, as well as to invest and dispose of the assets managed more easily. It is expected that additional revenue could be used to speed up the implementation of important and large-scale road infrastructure projects.
It should be pointed out that even after the reorganisation, the special obligations of LRA will remain. These are the management of state significance roads and the organization and coordination of ensuring safe traffic conditions by implementing traffic safety measures on state roads. Moreover, the enterprise will have to ensure the security of assets important for national security, to attain the ends set by the shareholder, including the protection of the public interest.
Following the reorganisation, all LRA shares will continue to be owned by the State. Being the single shareholder of the enterprise, the State will retain control over it. National security will also be ensured: the joint-stock company will remain listed among the enterprises important for national security, and state roads will continue listed among the facilities and assets important for national security.
Amendments to the laws allowing to change the legal form of LRA from 2 January 2023 will have to be approved by the Seimas.
Other transport companies to be reorganised into joint-stock companies by the end of 2022 are Lithuanian Airports, Oro navigacija (Air Navigation), Klaipėda State Seaport Authority and the Lithuanian Inland Waterways Authority.
The reorganisation of state-owned companies is performed while implementing the Government’s programme and the recommendations to review, simplify and unify legal forms of state-owned companies written by the Organisation for Economic Co-operation and Development.