Ion Zaporizhan and Serhiy Kotelnik at a meeting with protesting railroad workers
Prime Minister Dorin Recean said that the Agency for Material Reserves will supply diesel fuel to the railway company. This will be done as a de-blocking of the crisis at the enterprise, without repayment or loan conditions.
The government is also analyzing the possibility of supporting the activity of the WDM by investing in infrastructure. To this end, it is planned to allocate 400 million lei annually for five years to modernize the railway tracks. The relevant contract is to be signed between the Ministry of Infrastructure and Regional Development and the Railroad Company.
A management crisis is also present. Serghei Tomsha, the interim director of Moldova Railways, tendered his resignation on February 25. He had held this position for exactly one year. The reasons for his resignation were not specified by the former head. On March 13, the government decided to appoint Serghei Cotelnic as the new interim director of Railroad Moldova. According to him, the priorities are: payment of salaries; optimization of expenses (especially for fuel and production processes); and financial sustainability (to work within the available budget).
As of early March, only 10 out of 34 branches of the railroad had received their August salaries. Protests by railroad workers in several regions continue.
Ion Zaporozhian, chairman of the Moldovan Trade Union Federation of Railwaymen, said in this regard: “All they tell us is that they are looking for solutions. But people have nothing to eat. At present, the debts of the Railroad Ministry to suppliers amount to more than 1.2 billion lei. For diesel fuel – 22 million lei, for labor remuneration – 191 million lei, for Moldovagaz – 25 million lei, for Termoelectrica – 19 million lei, etc.”.
In order to realize the reasons for the current crisis and the lack of funds for WDM, it will be logical to make a comparison with the previous period. It can be seen that the indicators have fallen tenfold.
In 2000, 8.2 million tons of goods were transported by rail, while the highest volume was registered in 2003 – 14.7 million tons.
The peak of passenger transportation by the Railway was registered in 1995 – 11.7 million; after 2000 the figures for the next ten years were at the level of 5-5.5 million passengers per year.
According to statistics, in 2024, the share of railway transport in the total structure of transported cargo (road, air, river) will account for 12.1%. Which is relatively small.
The volume of transportation in 2024 by rail decreases to 2.484 million tons, which is only 62% compared to 2023. Passenger traffic is also declining. In 2024, 589,500 people used the railroad, or 76.1% compared to 2023.
Indicators of financial performance of “Railways of Moldova”:
2019 – loss of 26.518 million lei;
2020 – loss of 215,898 million lei;
2021 – loss of 61,598 million lei;
2022 – profit of 62.127 million lei;
2023 – loss of 143.873 million lei.
Minister of Infrastructure and Regional Development Vladimir Bolia wrote in social networks that “during the last 10-15 years the state enterprise “Moldovan Railroad” was badly and irresponsibly managed”. Also, the minister emphasized: “Due to the lack of timely investments and a clear vision, the Moldovan Railroad has turned into an enterprise that cannot ensure its financial sustainability. In addition, the war in Ukraine has changed the logistic chains and Moldova is no longer a transit territory for goods transported by rail…”
Experts in the field of transportation note that the problems of the Railways did not arise yesterday, it is clear to everyone. But for a long time the necessary measures to prevent the crisis were not taken. Therefore, it will now take years to eliminate the causes of the crisis. In this regard, we can only welcome the authorities’ intention to allocate money for the modernization of the railway infrastructure, with 400 million lei annually for five years. It follows that in the long run, for at least five years, the Railway Ministry will be provided with financial support from the state, which will help stabilize the situation.
Another key formula that was voiced was that the situation in the LDM depends on the logistic chains formed in other countries, and Moldova is no longer a territory for the transit of goods. But if there is no transit, there is no revenue.
It is well known that the main part of the RDM’s income comes from transit freight traffic from/to Ukraine via Moldova to Romania. Trains carry grain, liquid fuel, all kinds of raw materials: oils, glass, slag, saltpeter.
The RDM used to earn the most from the transit of Ukrainian coal and iron ore to the Galati metallurgical plant, but due to objective reasons these cargoes have almost disappeared.
Even after the conflict in Ukraine is over, it is not certain that transit will be restored. The reason is the situation at Galati Iron and Steel Works, which is now called Liberty Galati. It is one of the largest steel producers in Eastern Europe. As of March, the plant remained idle for the ninth month in a row. With high energy prices and steel import tariffs, the mill’s debts were growing and commercial disputes were multiplying. The company announced the start of the preventive process, a procedure aimed at preventing the debtor’s insolvency by reaching an agreement with creditors.
Liberty Galati management is looking for ways to stabilize and further develop the business. Moldova Railways’ revenues depend to a certain extent on how the situation at the Galati plant will develop.
