EU-aligned rail reform: Moldova splits state carrier to unlock infrastructure subsidies
The Republic of Moldova is set to finalize a comprehensive restructuring of its state-owned railway, Calea Ferată a Moldovei (CFM), by the first half of 2026.
The reform will split the debt-ridden carrier into three independent entities: infrastructure, passenger transport, and freight. While transport services will operate under a commercial agent, the rail infrastructure—deemed a critical state asset—will remain under government management and will not be privatized.
Strategic subsidies and EU alignment
Deputy Prime Minister Vladimir Bolea announced that this "unbundling" is essential for legal compliance. Under current laws, the state cannot directly subsidize commercial freight agents, but it can fund the infrastructure it owns.
"We have allocated financial resources in the 2026 budget for these subsidies," Bolea stated during a TVR Moldova broadcast. He emphasized that once the reform is complete, infrastructure development will accelerate significantly due to dedicated state funding.
Modernization and digitalization
The modernization process, which began in 2025, strictly follows European Union requirements. The strategy focuses on two pillars: the adoption of the EU acquis communautaire and the total digitalization of railway operations.
Bolea noted that while parts of the current system remain decades behind, all new investments will meet modern European standards. Digitalization is expected to enhance safety and economic efficiency across the network.
Security and infrastructure upgrades
Planned upgrades include the installation of thermal sensor cameras, GPS equipment, and advanced lighting at strategic points. These measures aim to secure the network and improve operational transparency.
Although the reorganization was originally mandated by the 2022 Railway Transport Code, implementation was delayed, exacerbating the company’s long-standing financial crisis.
Financial crisis and regional impact
The urgency of the reform is underscored by CFM's dire financial state. On January 14, 2026, management extended mandatory leave for over 1,000 employees following months of unpaid wages.
The company’s decline began in 2009 but worsened significantly after 2022. The closure of the Port of Odesa and Russian strikes on Ukrainian rail infrastructure have severely disrupted the transit volumes Moldova relies on for revenue.
To mitigate these losses, the Government approved a multi-year contract in May 2025. This agreement ensures annual budget allocations for maintenance and development, aiming to shift freight traffic from roads to rail and increase overall transit speeds.
Translation by Iurie Tataru
