Rail Transport:

The Moldovan Railways (CFM) were re-built after World War II using wide gauge tracks, and were made an integral part of the former Soviet Union's Railways. The break-up of the Soviet Union deeply affected the whole huge railways system. Unlike Russia, Moldova has not been able to afford to keep loss-making services running by cross-subsidizing from freight.

After nearly sliding into absolute bankruptcy, CFM proposed a restructuring plan in August 1999, which aimed at reorienting the state enterprise to the conditions of a market economy and improving its operations by going from a "production" strategy to a "market" strategy. However, the restructuring process - supported by the EU under TACIS - has been slow for the following main reasons: (i) the goals of the restructuring plan have not been widely accepted by the staff of CFM; (ii) determining what would be the specific status of Transnistria and its independent policies, while railways are operated integrally; and (iii) resolving the cross-subsidy provided by freight transport to passenger transport which the government imposes on, but for which it does not compensate the railways. It is likely that hard choices lie ahead, including downsizing and concentrating efforts only on the core businesses with potential.