Moldova’s government to tackle growing problems of railway company CFM

Moldova’s government to tackle growing problems of railway company CFM
CFM M62-1060 in Chisinau. / Rikard Ågren
By Iulian Ernst in Bucharest August 1, 2018

The government of Moldova on July 31 put the public railway company Calea Ferata din Moldova (CFM) under direct supervision of the state assets agency (APP) in order to streamline the company’s operations. Its employees have now received their wages for the past three months.

The move comes after the government approved a bill on CFM’s restructuring last October, envisaging its division into three separate companies — one of the nine options suggested by the government’s consultant Egis, which was hired by the executive to explore options for the troubled company. Under the bill, the minister of economy was supposed to draft a strategy for the company and submit it to the government.

The wages of the 9,948 employees accounted for nearly 40% of the expenditures of the public railway company in 2016, the consultant underlined, suggesting significant personnel downsizing may be needed.

Prime Minister Pavel Filip hinted on July 31 that beside bad management, frauds are the cause of the losses incurred by the company. There are some 40 suppliers that use the company’s resources, he stressed. In the meantime, the company accumulated some MDL100mn (€5mn) in unpaid wages.

The company has been supervised so far by the ministry of economy headed by former prime minister Chiril Gaburici.

Filip urged the APP to quickly find resources to pay wages, streamline the company’s expenditures and start drafting a strategy for the future.

The Moldovan government plans to restructure CFM by splitting the public railway company into three separate units — to manage freight transport, passenger transport and infrastructure respectively.

The current situation of the country’s railway system and of CFM have deteriorated to an alarming extent, the report drafted by Egis concluded last October.

CFM needs €300mn of investments by 2020 in order to improve the safety and the quality of the services delivered, under the 2014-2020 investment plan previously approved by the government. The restructuring of CFM is aimed at implementing the investment programme.

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