“A Harbinger of Trouble”: Transport Sector Raises the Alarm

The existing model of managing passenger transport has run its course, and the long-overdue decisions in this sector will be painful for everyone, including businesses, the public, and the state

The fuel shock of this March has exposed the first serious crisis in the passenger transport sector. The transport system of a country is the lifeblood of any economy, and in Moldova’s case it has traditionally played a particularly important role by linking rural areas with cities, ensuring labor mobility, supporting trade, and providing access to basic services. That is why alarming signals from transport operators almost immediately generate social tension. This refers to a statement by the Employers’ Association of Road Transport Operators (APOTA), which announced the phased suspension of regular bus services on national routes. It also warned that, as during the pandemic period, some routes may not resume after being suspended, while the number of localities left without service could increase sharply. The formal trigger for this decision was the sharp rise in diesel fuel prices. Since the beginning of the month, diesel has increased by nearly 40%, surpassing the price of gasoline for the first time in the country’s history. For transport operators, whose minibuses and buses run on diesel, this surge has rendered most routes either unprofitable or on the verge of zero profitability. Meanwhile, road transport operators had been calling for a tariff revision long before the price surge. Negotiations between APOTA, the Ministry of Infrastructure and Regional Development, and the National Road Transport Agency (ANTA) began on February 25, with the changes expected to take effect on March 1. However, this ultimately did not happen, as the process was blocked by ANTA, which, according to the transport association, “demonstrated its professional inability to carry out even the most basic calculations”. However, it would be a gross oversimplification to attribute the current crisis between the state and transport companies solely to the fuel shock. The surge in diesel prices can be seen merely as a trigger, as the conflict between the government and road transport operators has much deeper roots and has been consistently ignored by the authorities in recent years. Put simply, officials have long been dragging their feet, postponing unpopular decisions until the “powder keg” began to detonate. At first glance, this appears to be a classic case of conflict over business-provided services, but in reality, it is just the tip of the iceberg. The main factor, as already mentioned, is fuel. For Moldova, a country entirely dependent on energy imports, any fluctuations in external markets are immediately reflected in domestic prices. At the same time, the costs of spare parts, maintenance, and insurance are rising, which, given an aging vehicle fleet, means a continual increase in operating expenses. Another structural issue is related to the state’s regulatory policy. The current tariff-setting model remains largely administrative and inflexible. As a result, rates are revised belatedly, fail to reflect current economic dynamics, and are often determined under political pressure. Consequently, the entire passenger transport sector finds itself trapped, with rising costs while fares remain fixed. The third factor lies in persistent underinvestment. A significant portion of the bus fleet has been in service for more than 10-15 years, which not only increases maintenance costs but also reduces safety and the quality of services provided. In addition, transport businesses have recently raised a major complaint against the authorities: inaction against illegal transport operations. According to APOTA, a whole shadow infrastructure has developed in the country, including unlicensed bus stations that duplicate official routes and effectively siphon off passenger traffic. Moreover, industry representatives point directly to a corruption element, arguing that such schemes would be impossible without the protection of high-ranking officials in relevant agencies and law enforcement bodies. The systematic accumulation of problems culminated in February this year, when transport operators were forced to stage a mass protest at the heart of Chisinau. Instead of attempting to de-escalate the situation, the authorities chose a path of administrative pressure and forceful measures, which only made matters worse. The crisis in the transport sector cannot be viewed solely as a business problem, as its consequences have a pronounced social impact. Rural residents are affected first and foremost, for whom public transport is often the only way to reach work, school, or medical facilities. Consequently, the announced reduction of regular routes effectively isolates citizens from basic services. Against the backdrop of the already significant gap in living standards between urban and rural areas, these transport restrictions will only exacerbate socio-economic inequality. Moreover, limited transport access accelerates demographic decline and affects the three most vulnerable social groups: pensioners, students, and low-wage workers. Restricted mobility ultimately speeds up a process that is already one of the country’s key problems – the migration of the population from villages to cities and eventually abroad, leading over time to the gradual depopulation of rural areas. At the heart of the current crisis lies a fundamental contradiction: freezing tariffs is politically advantageous but economically disastrous. On one hand, the state seeks to keep fares at a socially acceptable level; on the other, harsh economic realities are rapidly turning transport into an unprofitable business. Clearly, in an effort to avoid public unrest, the authorities are effectively shifting part of the social burden onto private operators. However, this cannot continue indefinitely, because once routes are closed, the illusion of affordable transport disappears immediately. Naturally, such problems are not unique to Moldova: in many countries, transport balances between social functions and market realities. However, in our circumstances, the burden on the sector is compounded by a high share of rural population, limited budgetary support, and weak diversification of the transport system. This is what makes passenger road transport both a critically important and highly vulnerable sector. Taken together, all of this creates a chain reaction effect, where the transport crisis is likely to evolve into a factor of overall economic slowdown. It is therefore appropriate to ask why the situation reached this point. The answer largely lies in a series of ill-conceived decisions. In recent years, the ruling party, following an electoral logic, avoided long-overdue reforms. Problems were acknowledged and discussed, but shelved for political reasons in favor of the overarching goal – to remain in power. The longest day has an end. It is now clear that the previous model of administering the passenger transport sector has run its course, and the necessary measures in this area will be painful for everyone, as they will inevitably affect the interests of businesses, the public, and the state. Overall, however, the crisis is far from accidental; it is the “harbinger” pointing to deep-rooted problems in the management of the economy and social policy, issues that we and other experts have been highlighting regularly over the past few years.