The director of the state-owned enterprise “Moldova’s Railways” (CFM) Oleg Tofilat admits that the entity is facing financial problems and, because of this, the employees have not yet received their salaries. According to the director, the company has only the money it earns and the reduction in revenues has generated salary arrears. Also, the war in Ukraine upset authorities’ plans to buy new locomotives and wagons, IPN reports.
The CFM director noted that the revenues in the company’s budget have decreased and the employees have not been yet remunerated for the last few months. The uncertainty in the railway system, generated by the war in Ukraine, has led to a significant reduction in revenues.
“Last year we doubled the salaries. These were very low and we raised them almost twice. I can’t say they are very big now. The average salary is just over 8,000 lei. However, this means that now the pressure on our budget is much greater. The lack of working capital is another problem at the company. Consequently, we manage on what we earn. If we have a period of one or two months when demand decreases, revenues respectively decrease and the company can have difficulties in paying salaries. This is unpleasant, but we cannot solve all problems in such short terms. When I took up my duties, this gap in working capital was equivalent to receipts for eight months. Now the situation is slightly better, but anyway, if demand drops, we run into difficulties. If we do not look at the figures, this year we paid more salaries than last year. The last two months have been critical in terms of revenues. Certainly, better times will come. The certainty of stabilization of pays will appear when the system stabilizes,” Oleg Tofilat said in the talk show “Day by Day” on Radio Moldova station.
He noted that most of the locomotives and wagons are worn-out and the rehabilitation of railway infrastructure and rolling stock has become imperative. However, new locomotives and wagons in times of war are extremely expensive.
“It’s hard in times of war to think about new equipment because international financial commitments stipulate that any financed good must be insured, and rail transport needs to cross Ukraine. Crossing a war zone makes insurance of an asset very expensive and this prevents us from procuring new rolling stock. In addition, the existence of this war means that you cannot buy even rails from Ukraine and Russia, but Russia was the largest producer of broad track gauges,” stated the CFM director.
Recently, the government approved the ratification of a €23 million loan agreement between the European Bank for Reconstruction and Development and Moldova. The money will be used to rehabilitate the railway corridor Valcinet-Ocnita-Balti-Ungheni-Chisinau-Cainari, which has a length of 446 km.
