Moldova Revamps Railways: Seeks Profitability & Investment
The Moldovan railway system, Calea Ferată din Moldova (CFM), requires restructuring to achieve profitability.
Efforts are underway to address outstanding wage payments, as reported by Andrei Spînu, Minister of Infrastructure and Regional Development, during an interview on TVR Moldova's program "Punctul pe Azi" (Point of the Day). Spînu emphasised the importance of implementing the Railway Code as a key factor in achieving this goal.
"There are still delays," Spînu acknowledged. "Based on the latest data, salary payments for February are nearly complete. The railway system must undergo a restructuring process. In its current state, the railways cannot remain viable for much longer. This is why I made this request to the interim director currently in place. While some progress has been made, other aspects are moving slower. However, it is crucial that we implement the Railway Code within the next one to two years, as this will serve as the framework for restructuring the railways."
Spînu outlined the restructuring plan, which involves establishing at least three distinct companies: one responsible for railway infrastructure, another dedicated to passenger transport, and a third focused on freight transport. "The purpose of this restructuring," Spînu explained, "is to attract private investors. Imagine I am a private investor interested in rail freight transport. I would purchase 100 wagons and two to four locomotives. By approaching the infrastructure company, I could lease the infrastructure, pay the associated fee, and gain access to the railway network."
According to estimates from the Minister of Infrastructure and Regional Development, modernising the railway infrastructure will require approximately three billion euros.
The State Enterprise CFM has been grappling with financial difficulties in recent years. The situation began to deteriorate significantly after August 2022, coinciding with the reopening of the port of Odessa, which led to a decrease in transit from Ukraine. The enterprise's estimated losses for 2023 amounted to nearly 150 million lei.
Previously, Oleg Tofilat, the former director of the enterprise who resigned at the end of January 2024, stated that 95% of CFM's wagons are nearing the end of their operational life by 2025. Consequently, these wagons will no longer be permissible for international transport after that date.
In a relevant development this April, the government increased CFM's share capital by leveraging loans from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB). The Ministry of Finance allocated over 728,000 lei, equivalent to approximately 35,000 euros, to increase the share capital of the State Enterprise.
Currently, CFM stands as Moldova's largest state-owned enterprise, employing approximately 6,000 people. Serghei Tomșa is the current head of the enterprise.
Translation by Iurie Tataru
