No Transit Hub for Ukraine in Moldova?

Huge plans to rebuild the country’s railway infrastructure in order to participate in Ukraine’s postwar reconstruction appear to have turned out to be a pipe dream

It has become commonplace for the ruling party’s grand promises and plans regarding integration into promising regional projects to turn out to be nothing more than PR stunts with no tangible results. Recently, Infrastructure Minister Vladimir Bolea announced that the authorities had abandoned the modernization of the Valcinet-Ocnita-Balti-Ungheni-Chisinau-Cainari railway corridor. This project was positioned as part of the “Moldova Solidarity Lanes” initiative within the European Union’s “Solidarity Lanes” program. In July 2022, Brussels put forward a proposal to expand the Trans-European Transport Network (TEN-T) by including Ukraine and Moldova. It was presented as a “lifeline for the Ukrainian economy and a key to global food security”. The official goal was to ensure the export of agricultural products to international markets amid disruptions to maritime shipments from Ukrainian ports. We can recall the enthusiasm with which our officials spoke about the emerging opportunities for the country to become a transit hub for Ukrainian grain. However, as early as late 2022, Brussels shifted its focus in the development of transport links toward military mobility. €226 million was allocated for these purposes, and by the summer of 2023, the total volume of EU investments had reached €250 million. In May 2023, the European Union and Moldova signed an agreement on Moldova’s accession to the Connecting Europe Facility (CEF) for the financing of infrastructure projects. Our country became the first non-EU member to gain access to this program. A month later, Ukraine signed a similar agreement. By that point, European partners had already invested approximately €250 million in “Solidarity Lanes” projects to develop cross-border transport links. One of these projects involved the modernization of the railway line from the Romanian border to Ukraine. The first phase was to restore the Valcinet-Balti-Ungheni section, followed by the Chisinau-Cainari segment. The European Bank for Reconstruction and Development was to provide a loan of €23 million, the European Commission a grant of €20 million, and an additional €28 million was to be provided by the state-owned company “Moldova Railways”. Even back then, experts doubted the economic viability of repairing these sections if the goal was to quickly reroute Ukrainian exports. The shortest and most convenient routes for this do not run through those areas. However, the authorities were not thinking in terms of economic logic, but rather political one. “There is an opportunity to use Brussels’ funds to repair the entire railway from north to south, and then quietly profit from transit”, officials explained their decision. Incidentally, at that time, Kyiv also saw the project as an opportunity to access EU funds, so it immediately agreed to participate in the repairs, while simultaneously expecting greater efficiency from its Moldovan counterparts in establishing transport along optimal routes. The railways of Ukraine and Moldova signed an agreement under which approximately 400 km of track were to be repaired by the end of 2024. Loan agreements were also concluded with the EBRD for 15 years on preferential terms. At the time, it seemed that the European Union and Ukraine were indeed considering Moldova as one of the potential transit routes, including the use of the Transnistrian segment of the railway. However, this required us to quickly fulfill our obligations and ensure efficient logistics. Certain work was indeed carried out: localized repairs were undertaken on specific sections, the route remained open to freight traffic, and measures to increase capacity were discussed. Tariff discounts were also offered, but they failed to produce any noticeable effect. This was likely due in part to simple greed and in part to an unwillingness to reach agreements with Tiraspol. However, Chisinau insisted that Ukrainian cargo transit exclusively through territory controlled by the constitutional authorities, arguing that it was both safer and more profitable. By the end of 2023, interest in the Moldovan transit route from Ukrainian partners had noticeably declined, and the Moldova Railway once again faced serious financial difficulties. Train traffic through Cuciurgan was restored only in April 2024, by which time alternative export routes for Ukrainian goods had already been established. In November 2024, it was announced that the project to modernize the “North-South” railway corridor would be supported by international consultants – the companies Obermeyer Hellas (Greece) and DB Engineering & Consulting (Germany), which had won the tender to provide technical supervision services. The European Union announced its readiness to provide a grant of 32 million euros. I think it’s clear why external oversight of the process of utilizing EU funds was needed. A year and a half later, it became known that this key strategic project, designed to connect our country to international transport networks, had been deemed economically unfeasible and canceled. According to Infrastructure Minister Vladimir Bolea, its implementation could have increased the debt burden of the state-owned company “Moldova Railways” to 1.6 billion lei. A natural question arises: why were the risks associated with debt financing not properly assessed during the decision-making process? In fact, the risk of debt burden was originally provided for in the terms of the loan agreements. Since when have loans from European financial institutions become a problem for officials? I would venture to suggest that it is from the moment and in those instances when external partners cease to see the wisdom in it. For our country, unfortunately, a situation often arises in which signed agreements are not fulfilled, and accumulated administrative experience allows for finding convincing explanations for this. There are always reasons why commitments are postponed or revised, and there is always hope that partners will be understanding. While corruption has traditionally been cited as the main criticism of Ukraine by its external partners, then in Moldova’s case it is compounded by political short-sightedness and a provincial managerial approach. Perhaps this is a subjective assessment, and the issue is not limited to our country. Could it be that the European “Solidarity Lanes” initiative has failed on its own merits? However, statistics provided by Brussels suggest otherwise. Over the course of three years, Ukraine managed to export approximately 179 million tons of goods via logistics routes established by the EU, of which 91 million tons were agricultural products, including 85 million tons of grain, oilseeds, and related products. In monetary terms, exports amounted to €61 billion, while imports totaled approximately €150 billion. By early March 2026, these figures had risen to 209 million tons of exported goods, including 98 million tons of agricultural products and 111 million tons of non-agricultural cargo, such as ore, steel, and related goods. These corridors also enabled Ukraine to import approximately 95 million tons of goods, including fuel, vehicles, fertilizers, as well as military and humanitarian aid. What share of these shipments did our country help transport, and what was the economic impact on the railway and the state budget? Judging by the dire situation at the company and the extension of the forced furlough for 600 workers, things are not looking good. And what kind of way out of the crisis can we even talk about given the unprecedented rise in diesel fuel prices, which is a critical resource for the railways? It would be more appropriate to speak of a final decline rather than development. The question also remains open as to whether the planned reform, which involves splitting the company into infrastructure and operational components, will improve the industry’s efficiency. Or will it serve as a cover for the dismantling and sale of the remnants of the former giant? We will find out the answer soon enough.