● TUESDAY, May 5

Moldova’s Railways to initiate broad overhaul of trains

The state-run company “Calea Ferata a Moldovei” (“Moldova’s Railways”) is to start a major overhaul of its diesel trains and locomotives. An order to this effect was made by Minister of Transport and Road Infrastructure Vasile Botnari, who called a meeting with the administration of the company on May 5, following a new fire on a train running on the Chisinau-Ocnita route, IPN reports. Vasile Botnari instructed carrying out a broad investigation to find out the causes of fire on diesel trains running on internal routes so as to prevent the repeat of similar incidents. He also asked hastening the procedures for certifying the five modernized trains so as to put them into circulation as swiftly as possible. According to the company’s director general Vladimir Cebotari, Moldova’s Railways now operates 125 trains, 66 of which are main-line ones. The newest locomotives are over 30 years old. Ten diesel trains run on internal routes. The newest of these were purchased in 1986.

Locomotive that caught fire at end-March out of use

The locomotive that started to burn near Falesti town at the end of March is no longer used, director general of the state-run company “Calea Ferata a Moldovei” (“Moldova’s Railways”) Vladimir Cebotari has told. As in the case of the fire that occurred on another passenger train running on the same route, Chisinau – Ocnita, the rolling stock was worn-out. Vladimir Cebotari said the locomotive that burned on March 31 could not be repaired. The May 4 incident was a minor one and the assistance of firefighters wasn’t necessary. The fire started between two railcars and was extinguished by conductors. The damage caused is yet to be assessed. Press officer of the Civil Protection and Emergencies Service Diana Turcan said specialists of the anti-fire experimental lab established that the March fire started at the rear of the engine as a result of a leakage of lubricants on incandescent parts.

Two ring roads to be built with EU grant

The European Union offers Moldova a grant of €15 million for building two ring roads. A grant agreement to this effect was signed in Chisinau by Minister of Transport and Road Infrastructure Vasile Botnari and Julia Otto, Head of the EBRD Office in Chisinau, which will manage the grant. The €15 million will be used to build a 6 km ring road around Bahmut, on the R1 Chisinau – Ungheni – Sculeni national road, and an 8.5 km ring road around Vulcanesti, on the M3 Chisinau – Giurgiulesti national road, at the border with Romania.

Employers paying salaries ‘in envelope’ will be hunted

Multidisciplinary teams consisting of specialists of a number of state institutions will carry out a series of activities aimed at identifying the taxpayers that pay salaries ‘in envelope’ and use ‘illegal labor’. Joint regulations governing the activity of the multidisciplinary teams were signed by the National Confederation of Trade Unions, the General Police Inspectorate, the State Main Tax Inspectorate and the State Labor Inspectorate on May 5. General Police Inspectorate head Gheorghe Cavcaliuc said the multidisciplinary teams will make effort to identify the economic entities that break the law based on the available cash, the work performed in the traditional sectors and the significant turnover against the salary fund.

● WEDNESDAY, May 6

Kroll report: Full forensic trace is required to recover funds

The company Kroll, which carried out a preliminary investigation into the theft of money from three Moldovan banks, in its report says a full forensic trace of the beneficiaries of funds is required, in order to identify the true extent of beneficiaries to transactions, and apply an appropriate legal strategy to recover funds fraudulently dissipated, IPN reports, quoting an unofficial translation of moldova.org. The report says that between 2012 and 31 October 2014, the exposure of companies deemed part of the Shor Group increased dramatically from MDL 1.1 billion to MDL 8 billion. This comprised what appears to have been initial, genuine lending activity which, as time progressed, was characterized by a complex series of transactions, whereby loan funds were passed amongst the banks, between entities, via foreign entities using Latvian bank accounts. The structure of the transactions and overall scheme was designed in an attempt to deliberately disguise the true nature of lending activity and maximize available credit. The general profile of these loan customers was not typical of normal commercial transactions and the level of connectivity between the entities demonstrates a deliberate effort to disguise true exposure of the banks.

Exchange of damaged banknotes can be difficult

The replacement of damaged foreign currency banknotes can be problematic in Moldova and is left to the discretion of banks and currency exchange facilities. There is no legal provision that would oblige these to exchange damaged bills even for commission. Therefore, the Moldovans have no other way out than to keep the damaged banknotes for occasions when they will possibly travel to the bill’s country of origin or to seek help from acquaintances or relatives living abroad. The press service of the National Bank of Moldova said that under the regulations concerning the currency exchange facilities, these can accept bills with minor defects that appear as a result of normal wear and tear, such as dirt or erasing, small spots of fat or of another kind, notes and stamp prints (except of stamps showing that the banknote is not authentic), which do not modify the main signs of the bills. The currency exchange facilities have the freedom to decide whether to accept or not authentic foreign currency banknotes with more essential defects.

● THURSDAY, May 7

Inflation rate higher than projected at start of year

The National Bank of Moldova reviewed up the annual rate of inflation for this year. The new rate forecast is 8.15%, up from 5.8% projected in January. According to the Bank, this year the inflation will be the highest in the last seven years. In a news conference, the governor of the National Bank Dorin Dragutanu said the main factors that influenced the rate of inflation were the depreciation of the national currency and the consequences of this depreciation, especially the increase in the prices of basic food and industrial products. In the second quarter of next year, the inflation is expected to return to the Bank’s target inflation of 5%, plus-minus 1.5%.

Loans granted to three banks could become public debt, Dragutanu

If the three banks – Banca de Economii, Banca Sociala and Unibank – do not repay the loans provided by the National Bank of Moldova to them, this debt will be transformed into internal public debt, the governor of the National Bank of Moldova Dorin Dragutanu said in a news conference on May 7. Dragutanu didn’t specify the size of the debt, but said that the figures reported by the media are not correct and the ‘real figure’ is influenced by the volume of deposits in lei withdrawn from the given banks and by other factors. As regards the impact of the transformation of the unpaid loans into internal public debt, the governor said the sum will be divided up by years so that the budget incomes, with which the debt will be repaid, will not decrease so much and particular budget costs will not have to be reduced.