How European integration killed the Moldovan railway
With the advent of European integration in Moldova, state-owned enterprises began to be mentioned in the news only as objects of theft, fraud and criminal schemes. The State Enterprise Railways of Moldova was no exception. Today it is an unprofitable enterprise with wage debts running into the millions and on the way to privatization. PolitNavigator studied how a once thriving company ended up with one foot in the grave.
Strikes and fires
The state enterprise “Railways of Moldova” is currently going through difficult times. International transportation, including the profitable routes Chisinau-Moscow, Chisinau-St. Petersburg, Chisinau-Odessa and a number of others, stopped last spring due to the pandemic. Currently, only three commuter trains operate in Moldova – Chisinau-Ungheni, Chisinau-Bendery and Balti-Ocnita. From February 12, the Railways Railways will completely suspend the movement of all local and suburban trains in the Republic of Moldova. Thus, the entire rolling stock of the company will simply stop.
At a meeting of the parliamentary commission on economics, budget and finance, the company's management explained the decision on a total shutdown by the obsolescence of the equipment, which in itself became a threat to the safety of passengers. Last year, for example, trains caught fire several times. The company does not have money for new locomotives and trains.
However, they are not available to pay wages to ordinary personnel of a strategic enterprise. Currently, the state-owned enterprise employs about 6,8 thousand people. Railway employees, with the exception of conductors and drivers, have not received wages for more than six months. The total amount of debt amounted to more than 52 million lei (3 million US dollars). In December 2020, railway workers went out to protest because they had not received their salaries for more than three months.
European integration through bankruptcy
The path of the Moldovan Railways into the abyss of bankruptcy began in 2009, when the first Alliance for European Integration AEI-1 came to power in the country. For their tendency to squander state property and steal budget money under the pretext of reforms and European innovations, citizens nicknamed this and subsequent coalitions the Alliances for the Euro.
According to the internal agreement of AEI-1, control over the strategic enterprise ZhDM was given to the Liberal Party, which advocates the dissolution of the Moldovan state and annexation to Romania. According to the party quota, the liberal Anatol Salaru became the Minister of Transport and Road Infrastructure, a veterinarian by education. He began his ministerial and veterinary activities with cutting off budgets for state-owned enterprises. Salaru called these decisions “reforms.”
Anatol Salaru.
The State Enterprise Railways of Moldova was one of the first to suffer. The state stopped subsidizing local and suburban routes. At the same time, the enterprise could not stop the movement of trains on these routes, since they are socially oriented. So the burden of increasing losses hung on the railways every year. But Salaru launched the Chisinau-Iasi passenger train “Uniri” with great fanfare: in honor of the reunification of Moldova with Romania expected by the liberals. The gesture was more for PR, because this flight is barely able to pay for itself.
Miron Gagauz, who headed the ZhDM while the Party of Communists was in power, accused Anatol Shalara of bankrupting the company. According to the data provided by the ex-director, in 2012 not a single diesel locomotive was subjected to major repairs, like most freight cars. European integrators closed the repair lines at the Chisinau wagon depot, and all repair work was transferred to the Romanian Remar plant. By a completely understandable coincidence, Salaru at one time appointed the former engineer of this Romanian enterprise, Vitaly Strune, as head of the Railways. At the same time, the first train modernized in Romania broke down less than a month later.
For some time, the company managed to balance thanks to profits from international passenger and cargo transportation. However, with the onset of the coronavirus pandemic, the management of the Railways was forced to stop international passenger transportation.
By this time, Salaru was no longer the Minister of Transport, although he subsequently managed to personally manage the company for some time. However, his efforts to destroy what was once one of the most profitable state-owned enterprises in the country have already borne fruit.
Attack on trains
The Accounts Chamber conducted an audit based on the results of the administration of the minister-veterinarian and identified cases of money laundering in the Railways. Thus, during the construction of the new Cahul-Giurgiulesti branch, the budget damage amounted to 21 million lei. When purchasing spare parts for repairing wagons and renting them out - 46 million lei.
Theft at the state-owned enterprise did not end after Salaru left. Pro-Europeans remained in power in the country, putting reforms through privatization at the forefront. To do this, as it turned out, they consistently bankrupted the Railways of Moldova. Thus, in 2018-2019, ZhDM sold more than 66 thousand tons of ferrous metals without the approval and decision of the Board of Directors. In addition, wheels and other ferrous metal products worth 168 million lei (about $10 million) were dismantled, again without the consent of the Board of Directors, which created risks of theft.
The leader of “Our Party” Renato Usatii also recalled that the Information and Security Service (ISS) in 2019 warned the current President Igor Dodon and the Minister of Finance Ion Chicu about multimillion-dollar thefts at the Moldovan Railways. But, unfortunately, according to the politician, “instead of suppressing crimes, the authorities replaced the leadership of the Railway Movement with “their own people.”
Renato Usatii.
Usatii believes that the SIS report describes criminal schemes, as a result of which the ZhDM found itself in a deplorable state. It lists the companies, the names of their owners and beneficiaries, from whom the road “purchased spare parts, fuel and lubricants with a price increase of 200-300%.”
The presence of such criminal schemes and thefts in a strategic state-owned enterprise of the country clearly demonstrates all the “beauty” of the course for European integration. The once profitable enterprise “Railways of Moldova” is on the verge of bankruptcy, and thousands of people may be left without work.
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