Rolling stock modernisation is a major priority for Moldovian Railways (CFM) with Salaru stating that the average age of Moldova's rolling stock is over 30 years "which is becoming a big problem for the safety of passengers and freight."
However, CFM is unable to invest in the upgrades itself due to crippling debts and a continued lack of profit. In the first nine months of 2012, CFM lost a record Leu 165m ($US 13.5m), a 283% increase on 2011 when the company lost Leu 75.8m.
Indeed, there is a strong argument that CFM should use any financing secured from the EBRD to help it avoid bankruptcy.
CFM was expected to announce the layoff of 5000 employees in early 2013 to combat its financial difficulties, with the railway reportedly owing Leu 230m to domestic and foreign businesses including some based in Ukraine and Russia after taking out loans charged upon property. The rehabilitation of five four-car dmus,which enabled CFM to introduce an accelerated service between the capital Chisinau and Ocnita in July 2012, also added a reported Leu 150m to this debt.
And while securing the funds may allow the railway to avoid these layoffs, the EBRD and EIB are only likely to release the cash upon the condition that it is used to modernise the railway.