Social

Moldovan Railways on Brink: Reform or Collapse?

The Moldovan Railways (CFM) continue to grapple with severe economic difficulties. In light of this, authorities are contemplating workforce reductions at the company as part of a critical reform process.

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Sursa: stiri.md

Minister of Infrastructure and Regional Development Andrei Spînu insists this overhaul is absolutely essential.

Spînu outlined a two-pronged approach to the reform. The first priority is investment in railway infrastructure, a responsibility that falls squarely on the government's shoulders. The second, equally crucial element involves optimising CFM's operations to ensure profitability.

“The railway system urgently needs a major overhaul, and there are two key areas we need to address,” Spînu said in a recent interview on Realitatea te privește. “One is infrastructure investment, which is the government’s role. The other, which has been neglected in recent years, is that the company must become optimised and profitable. If figures show this railway can be managed with 100 employees but currently has 200, the question begs to be asked: why? We have long advocated for a cost analysis – do we need 10 accountants, or are eight enough? Do we need 600 security personnel, or can we digitise operations and make do with 300? The government cannot keep subsidising a company’s losses.”

The minister assures the public that there are no current salary debt increases for CFM employees. However, there are outstanding payments for past salaries. Earlier this month, CFM management announced they owe their employees over 70 million lei. The company is ruling out a loan to cover salaries and plans to raise funds through the sale of scrap metal and property rentals.

CFM previously secured a loan from the Public Property Agency, channelled through a state-owned enterprise, to cover salary arrears from late 2023 and early 2024.

The state-owned Moldovan Railways, which has been struggling financially in recent years, deteriorated further after August 2022, when Ukrainian transit traffic declined. The company’s estimated losses reached nearly 150 million lei in 2023.

CFM remains the Republic of Moldova’s national railway transport company, administering railway infrastructure, passenger and freight transport. It is also considered the country’s largest state-owned enterprise, with approximately 6,000 employees.

Translation by Iurie Tataru

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