Economic

Moldova's Railway Derailed: Debt, Decay, and an Uncertain Future

Moldova's national railway operator, Calea Ferată din Moldova (CFM), is grappling with a triple threat: mounting employee salary debt, a rapidly ageing fleet, and an impending deadline for locomotive use.

Calea Ferată din Moldova
Sursa: Calea Ferată din Moldova

Outgoing director Oleg Tofilat announced a staggering 135 million lei ($7.2 million) in unpaid wages for employees accumulated between November 2023 and January 2024. Facing this urgent crisis, Tofilat proposed bank loans as a potential solution.

But financial woes run deeper than unpaid salaries. Tofilat revealed a dire state of the railway fleet, with 60% classified as "poor" and 40% in "critical" condition. Further compounding the problem, most locomotives will become unusable after 2025 due to outdated technology, severely impacting international transportation.

"By 2025, 95% of wagons will exceed their operational lifespan," Tofilat warned. "All grain cars will be phased out, rendering them ineligible for international transport."

Citing the deteriorating situation, Tofilat resigned on January 29, 2024. CFM's troubles began in August 2022 with the reopening of the Ukrainian port of Odessa, leading to a significant decline in freight transit. The company incurred estimated losses of 150 million lei ($8 million) in 2023.

Serghei Tomșa has been appointed interim director, tasked with navigating these complex challenges and securing the future of Moldova's crucial railway network.

Translation by Iurie Tataru

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