ECO-BUS WEEKLY DIGEST February 1-7. Most important Economy & Business news by IPN
● MONDAY, February 1
Works to reconstruct Chisinau Wastewater Treatment Station to end in November
The works to reconstruct the Chisinau Wastewater Treatment Station will be finished by November 30 this year. Such a commitment was made by the building companies in a meeting with the administration of “Apă-Canal Chisinau” that was held last week. The information was communicated by the company’s acting director Anatolie Likii. “Now the business entities are checking the system for discharging wastewater into the centralized system and are making a maximum effort for the unpleasant smell in the municipality of Chisinau next summer not to be felt within 500 meters from the station,” Anatolie Likii stated in the ordinary meeting of officials of municipal services.
Flights to Moscow in February
As of February 1, FlyOne operates direct flights from Chisinau to Moscow and back on Monday and Friday. The flights are operated according to the schedule: Chisinau (KIV) 10:00am – Moscow (VKO) 1:00pm; Moscow (VKO) 2:00pm – Chisinau (KIV) 3.00pm. Air Moldova also published the timetable of flights for the first half of February. Flights to Moscow were scheduled for February 4, 6, 11 and 13. The operators warn the passengers that before purchasing tickets, they should see the information about the imposed or annulled restrictions published by the authorities of the state to which they intend to travel.
“For Moldova” suggests reducing VAT rate for hospitality industry
The MPs of the parliamentary platform “For Moldova”, which includes the MPs of the Shor Party, suggest reducing the VAT rate for the hospitality industry from 12% to 6% during the state of emergency or the state of public health emergency. A legislative proposal to this effect will be registered the next few days. The announcement was made after the MPs had discussions with representatives of the National Association of Restaurants and Recreational Facilities of the Republic of Moldova (MĂR) and representatives of large companies working in the hospitality industry. In a press release, the Shor Party says the MPs who come up with such an initiative consider that the state did practically nothing to support the hospitality industry during the pandemic even if this sector contributes substantially to the state budget and is the largest supplier of jobs in the country. “We consider this proposal is well-founded and correct in the context of the anti-COVID-19 measures,” said MP of the Shor Party Vadim Fotescu, noting the VAT rate for the hospitality industry in Romania was 5% even before the pandemic.
● TUESDAY, February 2
There is no real instrument for investing money in Moldova, economic expert
In the Republic of Moldova, there is no real instrument for investing money. The bank deposits are the main and practically only instrument used by the Moldovans. These deposits in 2020 cumulatively came to over 50 billion lei. “They rose considerably during the pandemic year too as the people do not have another investment solution,” economic expert of the Institute for Development and Social Initiatives “Viitorul” Veaceslav Ioniță stated. “We can now speak seriously only about one method of collecting money – through bank deposits. Theoretically, there is the possibility of buying shares, but the market is very poorly developed. There are brokers; companies are quoted on the stock exchange and there are banks that sell shares. Shares can be bought not only from the stock exchange, but also from shareholders,” stated the expert.
Investment Agency launches “Export Mission” program
Moldovan producers from three sectors of the economy will be able to promote and sell their goods on the EU market through the agency of the program “Export Mission”, which was launched by the Investment Agency in Chisinau on February 2. The program is implemented with the World Bank’s support. “According to the National Bureau of Statistics, the exports of products in 2020 declined by about 11.5%. This means that we must become more pro-active, better prepared and should adjust ourselves to the new realities, both by re-conceptualizing the marketing and promotion strategy and by increasing the capacities to connect to e-commerce and use online platforms,” said the director of the Investment Agency Rodica Verbeniuc.
Chisinau mayor accused of favoring advertising company. Mayor’s reaction
The PAS group on the Chisinau Municipal Council accuses the mayor of Chisinau Ion Ceban of “clearing” the city of advertising billboards in favor of the company “Epamedia”. According to the PAS councilors, the company holds a monopoly on the adverting market and has debts of millions of lei in the municipal budget, but continues to place ads on the streets of Chisinau, being protected by the mayor. In reply, Ion Ceban said the billboards will continue to be taken away. Councilor Roman Cojuhari told a news conference that “Epamedia”, which has a contract for the reconstruction of public transport stations signed with the Chisinau City Hall, was authorized to place 580 billboards. Moreover, “Epamedia” was taken over by “Moldpresa Grup”, which is owned by a person close to the Party of Socialists and Ion Ceban. As a result of these statements, Mayor Ion Ceban reacted, saying the regulations on advertising stipulates clear rules. More than 1,400 billboards have been removed so far and the city now looks much better. He assured that these places will not be allotted to “Epamedia” or to other companies to enable them to monopolize the adverting market.
Project to restructure Moldova’s Railways is practically not implemented, MP
The investment project “Restructuring Moldova’s Railways” that has a total budget of €109 million and is financed by the EBRD and EIB is practically not implemented, said the head of the Parliament’s public finances control commission Igor Munteanu. “Each of the citizens of the Republic of Moldova started to pay this money back as creditors, while Moldova’s Railways does not use what it brought by investments, locomotives, transformation of railroad sections. This shows the made investments are not put to good use and there is no investment plan that would match the function of the Administration Board and would do away with the chaos witnessed at this enterprise,” Igor Munteanu stated in a press briefing. In the hearings staged by the public finances control commission, Adrian Onceanu, acting director general of Moldova’s Railways, said the 12 locomotives bought within the EBRD-EIB project that were delivered on July 31 are used and bring benefits to the enterprise. A part of them were subject to technical overhaul. They are used to transport freight.
● WEDNESDAY, February 3
Only 104 interurban vehicles included in superior comfort category
The process of classifying the interurban units of transport into comfort categories that was launched last year was to end on October 1. But the deadline was extended until December 1 owing to the pandemic. Even so, not all the units of transport were subject to assessment. Of the over 2,000 tested vehicles, only slightly over 100 were included in the superior class. Yuri Gulca, of the National Road Transport Agency, said that 2,657 units of transport were to be assessed according to the timetables presented by operators. As many as 2,074 vehicles were yet examined last year. Eighteen of them weren’t validated because they didn’t meet the technical conditions. In these cases, prescriptions were issued for removing the shortcomings. A new assessment is to follow. Of the 2,056 validated vehicles, 104 fell into the superior comfort class, while 1,475 into the second class. A number of 1,579 comfort category certificates were issued, while the rest are yet to be collected. In the absence of such certificates, the minibus or bus cannot run on routes.
Dwellers of Chisinau block economize 50% on heating
The dwellers of the apartment building situated at 13 Calea Ieșilor St managed to save over 50% of the heat bill after their old heating system was replaced with an autonomous centralized heating system. Dweller Ioana Rotaru, who lives in an apartment that is 37.4 square meters in area, said that owing to the new heating system, she benefits from multiple advantages. “I’m very satisfied. If it’s too warm, I close the nozzle slightly and that’s all. We pay for what we consume. I don’t pay much. The heat and hot water bill for December was 552 lei. Earlier, I paid 1,300-1,200 lei for such an apartment,” stated Ioana Rotaru.
Oil sellers adopt similar behavior in modification of prices, hearings
Six oil companies that together manage 66% of the gas stations in the country adopt a similar behavior with regard to the modification of prices, which are similar, during 48-72 hours. The analysis of board prices points to a disagreement in the market’s reaction to the international quotations, namely the immediate reaction to the rise in quotations and the delayed reaction to declines. The findings were presented by the Competition Council in the hearings staged by the Parliament’s commission on economy, budget and finance. Competition Council chairman Marcel Răducan said the institution can intervene on the oil products market went the prices are posted at filling stations, when signs of cartel agreements and abuse of a dominant position are identified. Since March 2019, when the new fuel price formation methodology took effect, the Council has intensified the monitoring measures. Currently, six companies – “Lukoil-Moldova”, “Tirex Petrol”, “Rompetrol”, “Petrom”, “Bemol”, “Datario” – cumulatively manage 467 gas stations, which is 66% of the total. The given companies are the main suppliers of oil products.
Bridge over the Răut River in Ștefănești, Florești, available for use
The bridge over the Răut River that forms part of the national road G52, which ensures connection between the villages Prodănești, Ștefănești, Ciutulești and Cașunca of Florești district, became available for use. According to secretary of state at the Ministry of Economy and Infrastructure Mihail Lupașcu, the bridge over the Răut will ensure direct access for the over 6,200 inhabitants of Ștefănești, Ciutulești and Cașunca to the network of national roads. State Road Administration acting director general Veaceslav Potop said the participants in traffic will no longer bypass this region as the repaired road facilitates access to a number of local arteries, including to social facilities. The repair works on the bridge are of a high quality and were executed by a local company according to plan.
National Bank urges citizens not to disclose bank card details
The National Bank of Moldova (NBM) warns the population that any information on bank cards is private and should not be disclosed to anyone, not even to bank representatives. The warning was issued in connection with false messages disseminated through such communication applications as Viber, WhatsApp, Telegram etc. on behalf of the central bank. The NBM warns that such messages are issued by imposters trying to obtain data on bank cards from uninitiated persons. In the case of disclosure, the information can be used by scammers to steal money from the card account. Keeping money on the card is a safe option, if the conditions of use are met. It is important that the card details be not disclosed to third parties.
● THURSDAY, February 4
Fewer mortgages were released in 2020 compared with 2019, but trend is kept
New mortgages to the value of 2.81 billion lei were provided in Moldova in 2020, a 13% decrease on 2019. The value of mortgages released by banks during the last three years trebled yet, to 7.88 billion lei at the end of 2020, constituting 17.3% of the portfolio of total bank loans, the National Bank of Moldova (NBM) has said. According to the recent data of the International Monetary Fund, the value of mortgages in the portfolio of total loans varies depending on the country. In Romania, the figure stands at 25.5%, in Ukraine at 3.4%, in Armenia at 10.6%, in Georgia at 32.3%, in Poland at 28.1%, in Russia at 12.1% etc. In Moldova, bank mortgages started to be more popular in 2018. Until then the value of released mortgages was rater low. At the end of 2017, this was 2.64 billion lei. The upward trend is kept – the demand for mortgages had grown relatively constantly during the last two years, except for the period when restrictions related to the COVID-19 pandemic were introduced. Later, the monthly volumes of the released new loans declined to almost the same value as in 2019, even if the total volume in 2020 didn’t reach the values for 2019, said the National Bank.
About 2,000 tonnes of apples and plums returned from Russia last year
Up to ten consignments of 20 tonnes of Moldovan apples or plums each were returned from the Russian Federation last year after detecting quarantine organisms in them. The Agency’s specialists said that samples from the fruit are collected before authorizing the export of stone fruit and these are analyzed by the Central Phytosanitary Laboratory for detecting harmful organisms. The quarantine organisms found by the phytosanitary bodies of Russia do not have the same status in Moldova. The returned consignments of fruit are examined and, if no harmful organisms are identified in them, the fruit can be sold on the local market or processed. The head of the Agency’s Plants Protection Division Svetlana Lungu said that given the large quantities of fruit exported to Russia, the return percentage is not so large. If the batches are sent back, it does not mean that the whole batch didn’t comply. It is enough for one fruit to be affected and the whole consignment is returned.
Hearings in Chisinau Airport and Air Moldova to be held in Parliament
Hearings on the situation at the Chisinau International Airport and at Air Moldova company will take place in Parliament next week. Such a proposal was formulated by the MPs of the Party “Dignity and Truth Platform”. “Missis Speaker, we should avoid the situation of last December when we voted for hearings, but you closed the session earlier. Let’s ensure clarity as to when the hearings on the Airport and Air Moldova will be held,” said MP Alexandru Slusari.
Commission created on parliamentary platform to analyze situation at Moldova’s Railways
A special commission constituted on the parliamentary platform will analyze the economic-financial situation of the state-owned enterprise Moldova’s Railways and the results of the activity of the railway transport sector for 2010-2020. A decision to this effect was adopted by the MPs on February 4. According to the Socialist MPs, who are the authors of the bill, the enterprise’s credit debt at the end of 2020 was 459.4 million lei. The salary arrears (partially for October and November 2020) came to 35.5 million lei, the debts for the contributions to the social insurance and health insurance budgets to 26.9 million lei, while to the budget to 5.5 million lei. In his speech, PPPDA MP Alexandru Slusari said their group has reasonable suspicions that the purpose of this commission is to distract attention from other important issues, like the bankrupting of a strategic facility and its transmission to shrewd guys or even to another state.
● FRIDAY, February 5
Aureliu Ciocoi: If acting Government works until snap elections, money for elections will be taken from reserve fund
Acting Prime Minister Aureliu Ciocoi said that in the absence of a fully-fledged Government that would amend the state budget law, money for the snap elections will be taken from the reserve fund. He assured there are now no salary and pension arrears. Aureliu Ciocoi didn’t rule out the possibility that the executive he manages will fulfill its duties until the snap parliamentary elections. If an executive with full powers to amend the state budget law is not voted in until the snap elections, money for the snap parliamentary elections will be taken from the Government’s reserve fund that now totals 161 million lei.
Functioning of heating system necessitates daily efforts, Termoelectrica director general
In the course of 2020, the team of the Heat Networks Service of Termoelectrica carried out 1,150 interventions in the heating system and 250 interventions in the consumer connection points. About 350 specialists were involved in the works to maintain the distribution infrastructure, intervening nonstop whenever it was necessary, regardless of the hour or weather conditions, Termoelectrica noted in a press release. Termoelectrica director general Veaceslav Eni noted that the efficient functioning of the heating system necessitates great efforts daily. Hundreds of employees are concomitantly engaged in monitoring and intervention activities so that the consumers benefit from the best services.
Annual average inflation will be 1.8% this year and about 4.4% in 2022, NBM
The annual average inflation will be 1.8% in 2020 and about 4.4% in 2022. The annual pace of regulated prices will decrease in the first half of the year, but will rise starting with the third quarter of 2021 until the end of the forecast period. The annual pace of food prices will remain at relatively constant levels in the first three quarters of the forecast period and will then increase significantly until the first half of next year. Later, the food prices have a stable pace, says the first inflation report for this year that contains forecasts for 2021 and 2022. “The reduced annual pace of food prices in 2021 will be due to the aggregate internal disinflation demand and the effect of high annual basis. The subsequent rise will be influenced by the effect of products with a powerful seasonal character and the late effect of 2020,” the governor of the National Bank of Moldovan (NBM) Octavian Armașu told a news conference.
Concert halls and houses of culture to be reopened
The theater-concert institutions and houses of culture will reopen their doors to spectators, but will have to work at a capacity of 50% of the places and with the presence of at most 250 persons so as to efficiently manage the flow of visitors and to ensure the observance of the sanitary-epidemiological measures. A decision to this effect was taken by the National Extraordinary Public Health Commission on February 5. The activity of cinemas will be further restricted as most of the institutions of the kind are situated in Chisinau, Bălți and other municipalities, where the number of new cases of COVID-19 has increased. The public eating places of any kind will be able to provide takeout services between 10pm and 7am, but the consumption of products inside these places in the period is banned.
● SATURDAY, February 6
NBM official reserve assets go down
The official reserve assets at the end of January came to US$3.763,78 billion, down US$19.76 million on December 31, 2020, when they totaled US$3.783,54 billion. The decline in the official reserve asserts was determined by the payments made to service Moldova’s external public debt, to the value of US$13.27 million, by the depreciation of the exchange rates of the currencies that form part of the reserve assets against the U.S. dollar, in the amount of US$13.07 million, and also by the Ministry of Finance’s payments totaling US$6.49 million. Also, the rise in official reserve asserts in the period stemmed from the registration of loans and grants in favor of the Ministry of Finance for investment projects, to the value of US$5.35 million, which were disbursed by the IBRD within COVID-19 emergency response projects.
Moldova’s Railways does not confirm suspension of train routes
The information that the local and suburban train routes will be suspended as from February 12 wasn’t confirmed by the acting director general of Moldova’s Railways Adrian Onceanu. He has told IPN that a plan of measures for improving the situation at the enterprise was presented in the meeting of the Parliament’s commission on economy, budget and finance that was held on February 4. The suspension of the local and suburban train routes as of February 12 was one of the proposals, but this wasn’t accepted by the commission. Adrian Onceanu said that approximately 20,000 passengers were transported by local routes and 5,498 passengers by international routes in the course of last year. The losses total about 114 million lei.
National public budget executed with deficit of 38.5m lei
The revenues collected into the national public budget in January 2021 came to 4.96 billion lei, an increase of 251.1 million lei compared with January 2020. The expenditure totaled 5 billion lei, up 252.2 million lei on last January. The national public budget was executed with a deficit of 38.5 million lei. The state budget revenues in the first half of this month added up to 3 billion lei, up 262.2 million lei compared with the corresponding period last year. The revenues collected by the State Tax Service came to 1.6 billion lei, while those collected by the Customs Service to 1.5 billion lei. The state budget expenditure was 3.6 billion lei, while the deficit – 611.7 million lei.
