Support to the Government of Moldova...THE WORLD BANK AND GOVERNMENT OF MOLDOVA Technical Report –...

THE WORLD BANK AND GOVERNMENT OF MOLDOVA

Technical Report – Road Sector November 2012

Kocks Consult GmbH Stegemannstr. 32-38 D-56068 Koblenz Tel.: +49 261 1302-243

Fax: +49 261 1302-401 E-Mail: [email protected] Internet: www.kocks-ing.de

Support to the Government of Moldova for the Preparation of a Transport and Logistics Strategy

TECHNICAL REPORT – ROAD SECTOR

LEAD PARTNER Koblenz/Germany

Associate Partner

Wiesbaden/Germany Associate Partner Chisinau/Moldova

TRADE TRANSPORT

CUSTOMS

GOVERNMENT OF MOLDOVA

Transport and Logistics Strategy Preparation


Joint Venture Kocks Consult GmbH, Koblenz – TransCare, Wiesbaden – Universinj LTD, Chisinau II

NOTE: This report covers data collected and processed by the Project Team up to August 2012. The information presented herein has been compiled either from comprehensive research or from data provided by the relevant governmental and private institutions and agencies.




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TABLE OF CONTENTS 1. INTRODUCTION ..................................................................................................................... 1

1.1. Introduction ....................................................................................................................... 1

1.2. Country Background ......................................................................................................... 1

1.3. Population ......................................................................................................................... 1

1.4. Economic and Infrastructure Legacy ................................................................................. 5

1.5. The Current State of Affairs in the Logistics Sector ........................................................... 6

1.6. The Governments Response Strategy .............................................................................. 7

1.7. Moldova Economic Profile ................................................................................................. 7

1.7.1. Current Trends ........................................................................................................... 8

1.7.2. Current Trends in Location of Economic Development in Moldova ............................. 8

1.7.3. Economic Trends ....................................................................................................... 8

1.7.4. Domestic Opportunities .............................................................................................. 9

1.7.5. Future Geographical Outlook ..................................................................................... 9

1.7.6. Future Sectorial Economic Outlook .......................................................................... 10

1.8. Specific Factors Affecting International Transport of Passengers .................................... 11

1.9. Demographic Factors and Car Ownership ...................................................................... 12

1.10. Recent Trends in the Transport Sector in Europe.......................................................... 13

1.11. EU Policies Having an Impact on Moldova's Logistical Modes ...................................... 13

2. ROAD TRANSPORT SECTOR IN MOLDOVA...................................................................... 14

2.1. Ministry of Transport and Roads Infrastructure ................................................................ 14

2.2. National Road Network ................................................................................................... 19

2.1.1. Road Classification................................................................................................... 21

2.1.2. Road Condition ........................................................................................................ 24

2.2. Traffic Data and Observed Traffic Levels ........................................................................ 34

2.2.1. Principal Origins/Destinations ................................................................................... 36

2.3. Vehicle Fleet and Ownership .......................................................................................... 38

2.3.1. Vehicle Usage .......................................................................................................... 38

2.3.2. Road Haulage Industry ............................................................................................. 39

2.4. Domestic Passenger Transport ....................................................................................... 45

2.4.1. Urban Public Transport ............................................................................................ 45

2.5. Border Traffic .................................................................................................................. 47

2.6. Balance between Roads and Other Modes ..................................................................... 48

2.7. Road and Traffic Safety .................................................................................................. 48

2.7.1. Road Safety in Design and Maintenance .................................................................. 50

2.7.2. Overall Considerations ............................................................................................. 50

2.8. Road Traffic Forecast ...................................................................................................... 51

2.8.1. Forecast of Freight Transport in Moldova ................................................................. 52

2.8.2. Forecast of Passenger Transport in Moldova ........................................................... 54

2.8.3. Development of Traffic Model ................................................................................... 55

3. ROAD NETWORK MANAGEMENT AND FINANCING ......................................................... 61




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3.1. Introduction ..................................................................................................................... 61

3.2. Road Sector Reform ....................................................................................................... 61

3.2.1. National Strategic Directions and Policy Objectives.................................................. 61

3.2.2. Current Priorities ...................................................................................................... 62

3.3. State Road Administration ............................................................................................... 63

3.3.1. Status of Key-Reform Areas ..................................................................................... 64

3.3.2. Reform of Road Maintenance Organization and Contracting .................................... 65

3.3.3. Contracting ............................................................................................................... 66

3.4. Functional Classification ................................................................................................. 67

3.4.1. Principles of Functional Classification....................................................................... 67

3.5. Reform of Road Financing .............................................................................................. 70

3.6. Road Program 2011-14 ................................................................................................... 71

3.7. Level of Road Maintenance Expenditure ......................................................................... 76

3.7.1. Allocation of Funds ................................................................................................... 77

3.8. Financing Local Roads .................................................................................................... 81

3.8.1. Conclusions.............................................................................................................. 81

3.9. Needs Assessment ......................................................................................................... 82

3.9.1. Main Assumptions .................................................................................................... 82

3.9.2. Identified Need ......................................................................................................... 83

3.9.3. Current Funding Levels ............................................................................................ 83

3.9.4. Conclusions.............................................................................................................. 84

3.10. Additional Financing ...................................................................................................... 84

3.11. Rehabilitation of Core-Network ...................................................................................... 84

3.12. Findings and Recommendations ................................................................................... 90

3.13. Immediate Management and Financing Action Plan ...................................................... 92

3.14. Establishment of New Contracting Practices for Routine and Periodic Maintenance ..... 92

3.15. Establishment of a Modern Road Network Management System .................................. 93

3.16. Road Network Classification ......................................................................................... 94

3.17. Proposed Road Location Referencing System .............................................................. 95

3.18. Opportunities for Increased Private Sector Involvement in Highway Infrastructure ........ 96

3.18.1. Background ............................................................................................................ 96

3.18.2. Legal Provisions in Moldova ................................................................................... 96

3.18.3. General Options for Public-Private Partnerships .................................................... 97

3.18.4. External Risk Factors Affecting Potential Viability of Any PPP Scheme in Moldova 98

3.18.5. Public Finance, Accounting and PPP ................................................................... 100

3.18.6. Potential PPP Variants in Moldova ....................................................................... 101

3.18.7. Technical and Legal Requirements ...................................................................... 102

3.18.8. Economic and Financial Assessment ................................................................... 102

3.18.9. Conclusions .......................................................................................................... 103

4. ENERGY EFFICIENCY AND CLIMATE CHANGE .............................................................. 104

4.1. Introduction ................................................................................................................... 104

4.2. Vulnerability of Project Region (Moldova) and its Transport System to Climate Change 104




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4.3. Future Potential for Emission Reduction of Green House Gases (GHG) in the Transport

Sector by Means of Better Energy Efficiency ....................................................................... 106

4.4. Future Potential for Increasing Carbon Absorption by Means of Changing Land Use

Patterns Followed by a Reduction of Net Emissions of GHG ............................................... 107

4.5. Possible Adaptations of Transport System and Transport Facilities to Climate Change 107

LIST OF TABLES Table 1.1. Selected Rankings in Multi-year International Surveys................................................ 6

Table 1.2. Equipment and Transport Mode used by Product Type ............................................ 11

Table 2.1. Length of Road Network (kilometres) by Surface Type, 2011 ................................... 20

Table 2.2. SNiP Road Classification .......................................................................................... 22

Table 2.3 Number of Lanes According to Traffic Volume ........................................................... 22

Table 2.4. Length of National Road Network (Kilometres) by Class and Surface Type, 2011 .... 23

Table 2.5. Length of Local Road Network (kilometres) by Class and Surface Type, 2011 ......... 24

Table 2.6. Summary of Coverage of 2012 Road Condition Surveys .......................................... 27

Table 2.7. Roads Included in Visual Condition Surveys 2012 .................................................... 29

Table 2.8. Summary of Road Roughness Survey Results ......................................................... 30

Table 2.9. Summary of Visual Condition Survey Results ........................................................... 30

Table 2.10. Road Network Condition (National Roads) .............................................................. 33

Table 2.11. Road Network Condition (Local Roads) .................................................................. 33

Table 2.12. Summary of 2011 Annual Average Daily Traffic (AADT) by National Road ............. 35

Table 2.13. List of Freight Forwarding and Transportation Business ......................................... 40

Table 2.14. Major Trucking Companies in Moldova ................................................................... 42

Table 2.15. Goods Vehicle Fleet in Moldova by Type ................................................................ 42

Table 2.16. Cross Border Freight Traffic Movements, Moldova 2010-11 ................................... 47

Table 2.17. GDP Central Growth Forecast (% Average Growth per Year) ................................. 51

Table 2.18. Forecast of Tonnes Transported per Year, 2012 - 2032 .......................................... 52

Table 2.19. Forecast of Long Distance Land Passengers by Mode, 2012 - 2032 (‘000

Passengers) .............................................................................................................................. 54

Table 2.20. Brief Selection of Traffic Model Results by Forecast Year (AADT) .......................... 55

Table 3.1. Consolidation of Road Maintenance Companies ....................................................... 66

Table 3.2 Technical Categories of Public Roads in Moldova ..................................................... 69

Table 3.3. Road Fund Allocation, Years 2011-2014................................................................... 71

Table 3.4.a. National Roads Rehabilitation Program 2011-2014 Rehabilitation External Funding 72

Table 3.4.b. National Roads Rehabilitation Program 2011-2014 Rehabilitation National Funding 73

Table 3.4.c. National Roads Rehabilitation Program 2011-2014 Rehabilitation Unidentified

Funding ..................................................................................................................................... 73

Table 3.4.d. National Roads Rehabilitation Program 2011-2014 National Maintenance Funding 74

Table 3.5. Summary of On-going Road Rehabilitation Program ................................................ 75

Table 3.6. Allocation of Road Funds to Activities ....................................................................... 80




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Table 3.7. Financial Plan for Years 2013-2032, Unconstrained Budget ..................................... 82

Table 3.8. Main Assumptions for Unconstrained Budget Needs ................................................ 83

Table 3.9. Distribution of Available Funding for Year 2013 ........................................................ 84

Table 3.10. Core Road Network: Length and Current Status ..................................................... 85

Table 3.11. Core Road Network: Details of Road Sections ........................................................ 85

Table 3.12. Next to Core Road Network: Details of Road Sections ............................................ 86

Table 3.13. Screened Projects for PPP ................................................................................... 102

LIST OF FIGURES Figure 1.1. National Transport Network, Moldova ........................................................................ 2

Figure 1.2. Estimated Number of Moldovans Living Abroad 2001 Through 2011 ......................... 3

Figure 1.3. Annual Decline in National Population 2001 - 2011 ................................................... 3

Figure 1.4. Registered Ethnic Moldovans Living Abroad .............................................................. 4

Figure 2.1. Organisation Chart Ministry of Transport and Road Administration .......................... 16

Figure 2.2. International Transport Corridors in Eastern Europe ................................................ 17

Figure 2.3. International Motorway Corridors in Eastern Europe ................................................ 18

Figure 2.4. Road Network by Surface Type ............................................................................... 21

Figure 2.5. Road Network by Road Status ................................................................................. 21

Figure 2.6. National Road Network by Road Class .................................................................... 23

Figure 2.7. Local Road Network by Road Class ........................................................................ 24

Figure 2.8. Evolution of the Condition of National Roads 1992-2010 ......................................... 25

Figure 2.9. Local Road Network Condition in 2010 .................................................................... 26

Figure 2.10. Road Condition Survey Coverage, 2012 ................................................................ 28

Figure 2.11. Summary of Road Roughness Survey Results, National Roads ............................ 30

Figure 2.12. Summary of Road Roughness Survey Results, Local Roads ................................. 30

Figure 2.13. Summary of Road Roughness Survey Results, All Roads ..................................... 30

Figure 2.14. Summary of Visual Condition Survey Results, National Roads .............................. 31

Figure 2.15. Summary of Visual Condition Survey Results, Local Roads .................................. 31

Figure 2.16. Summary of Visual Condition Survey Results, All Roads ....................................... 31

Figure 2.17. Visual Condition Survey Results National and Local Roads ................................... 32

Figure 2.18. Main Traffic Flows in Republic of Moldova ............................................................. 37

Figure 2.19. Growth of Registered Vehicles by Year ................................................................. 38

Figure 2.20. Composition of Moldovan Vehicle Fleet 2011 ........................................................ 39

Figure 2.21. Number of Registered Vehicles used in International Transportation ..................... 43

Figure 2.22. Operations Managed under TIR Carnets ............................................................... 43

Figure 2.23. The Country of Loading of Freight in Moldovan Carriers’ Trucks (by TIR System) . 44

Figure 2.24. The Country of Unloading of Freight from Moldovan Carriers’ Trucks (by TIR

System) ..................................................................................................................................... 44

Figure 2.25. Million Passenger Km by Mode ............................................................................. 46

Figure 2.26. Cross Border Goods Traffic by Weight, Moldova 2010-11 ..................................... 47




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Figure 2.27. Forecast of the GDP Growth Rates ....................................................................... 52

Figure 2.28. Forecast of Freight Transport by Mode, 2012 – 2032 ............................................ 53

Figure 2.29. Forecast of Freight Transport Modal Split, 2012 – 2032 ........................................ 53

Figure 2.30. Forecast of Long Distance Passengers by Mode, 2012 – 2032 ............................. 54

Figure 2.31. Forecast of Long Distance Passenger Modal Split, 2012 – 2032 ........................... 55

Figure 2.32. Estimated Traffic Distribution 2022 – Moldova ....................................................... 57

Figure 2.33. Estimated Traffic Distribution 2032 - Moldova ........................................................ 58

Figure 2.34. Identified Core-Network ......................................................................................... 60

Figure 3.1. State Road Administration Organizational Chart ...................................................... 63

Figure 3.2. The Dynamics of Performed km with Number of Signed Contracts 2011-2015 ........ 75

Figure 3.3. 2011-1014 Road Program ....................................................................................... 76

Figure 3.4. Maintenance Expenditure in Road Infrastructure per Km of Total Network .............. 77

Figure 3.5. Allocation of Road Fund by Road Category ............................................................. 80

Figure 3.6. Identified Next to Core Network Road Sections ....................................................... 87

Figure 3.7. LTIS- Based Scenario .............................................................................................. 88

Figure 3.8. Adjusted Funding Balance According to LTIS-Based Scenario ................................ 88

Figure 3.9. Revised Scenario .................................................................................................... 89

Figure 3.10. Funding Balance for Revised Scenario .................................................................. 89

Figure 3.11. Road Rehabilitation Process .................................................................................. 91

Figure 3.12. Maintenance Contracts .......................................................................................... 92

Figure 3.13. Proposed Structure of the RMS ............................................................................. 94

Figure 3.14. Excerpt from Example Location Referencing System ............................................ 96

Figure 3.15. PPP Options ........................................................................................................ 102

Figure 4.1. Rainfall and Temperature in Moldova 1960-1990 .................................................. 105

Figure 4.2. Rainfall and Temperature in Moldova 1990-2007 .................................................. 105

APPENDICES Appendix I-A Automatic Traffic Counts for 2009-2011

Appendix I-B Manual Traffic Counts for 2011

Appendix II Vehicle and Transport Growth in Moldova

Appendix III Road Safety Strategies

Appendix IV Draft Government Decision for Maintenance Reform

Appendix V Total Road Network Works Required 2012-32

Appendix VI European Transport Network Map Submitted to Eastern Partnership Transport Panel




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ABBREVIATIONS

AADT Annual Average Daily Traffic

ADT Average Daily Traffic

AITA International Association of Road Hauliers

ATC Automatic Traffic Count

BI Bump Integrator

bln. billion

BoT Build Operate Transfer

CCN CEEC plus Cyprus and Malta

CIS Commonwealth of Independent States

DCFTA(Z) Deep & Comprehensive Free Trade Area (Zone)

EBRD European Bank for Reconstruction and Development

ECAA European Common Aviation Area

EIA Environmental Impact Assessment

EIB European Investment Bank

EPTP Eastern Partnership Transport Panel

ERF European Union Road Federation

EU European Union

EUR Euro (€)

EURORAP European Road Assessment program

GDP Gross Domestic Product

GHG Green houses gases

IDA International Development Association

IFC International Finance Corporation

IFI International Financing Institution

IMF International Monetary Fund

IRI International Roughness Index

km kilometer

kph kilometer per hour

LoS Level of Service

LTIS Land Transport Infrastructure Strategy

MCC Manual Classified Count

MCC Millennium Challenge Corporation

MDL Moldovan Lei

mln. million

MoTRI Ministry of Transport & Road Infrastructure

n/a Not Available

NBS National Bureau of Statistics

NCHRP National Cooperative Highway Research Program

NDS National Development Strategy

NRSC National Road Safety Council

PFI Private Finance Initiative

PPP Public Private Partnership




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RF Road Fund

RSPSP Road Sector Program Support Project

SNiP Russian Construction Standards

SRA State Road Authority

t ton

thd. Thousand

TI Transparency International

TIR Convention on International Transport of Goods

TRACECA Transport Corridor Europe – Caucasus - Asia

TTFA Transport and Trade Facilitation Assessment

UN United Nations

USD United States Dollar

v/c Flow/capacity ratio

WB World Bank

WEF World Economic Forum




Joint Venture Kocks Consult GmbH, Koblenz – TransCare, Wiesbaden – Universinj LTD, Chisinau 1

1. INTRODUCTION

1.1. Introduction

This document presents an overview of the road-transport sector in Moldova with an emphasis on road network and its condition, as well as road maintenance and financing.

The document first provides an overview of socio-economic background as well as the economic situation under which transport and logistics services are provided in Moldova.

In the following chapter data and information on the road sector is provided, both for infrastructure as well as operators and regulators. The results of the condition survey conducted for this study are presented. The chapter concludes with a summary of the road traffic forecast and the identification of a “core”-roadway network.

Chapter 3 of the document addresses road financing and maintenance and provides a network-wide needs assessment and subsequent budget, as well as needs assessment based on the identified core-network.

The report concludes with an assessment of climate change and energy efficiency as it relates to the transport sector in Moldova.

1.2. Country Background

The Republic of Moldova became independent in August 1991 following the collapse of the Soviet Union. It is bordered by Romania and Ukraine. The total area of the country is 33,843.5 km2. It has a total of 1,389 km of international borders.

The relief of the country represents a hilly plain sloping from northwest to southeast with an average elevation of 147 m above sea level. The central part of the country is occupied by Codrii woods, the most elevated topographical region with a maximum altitude of 429.5 m at Balanesti Hill, and a terrain fragmented by valleys. The terrain of the southwest of the country and the region along the lower course of the Nistru River represents a less fragmented plain.

The climate of the Republic of Moldova is moderately continental. It is characterized by a lengthy frost-free period, short mild winters, lengthy hot summers, modest precipitation, and long dry periods in the south. The average annual temperature increases southward from around 8-9°C in the north to around 10-11°C in the south. The average annual precipitation varies between 600-650 mm in the north and the centre and 500-550 mm in the south and the southeast.

1.3. Population

The total population of the Republic of Moldova was some 4.07 million (including Transnistria) or 3,560,000 as of mid-2011. According to the 2004 Census as published by the National Bureau of Statistics, a negative annual growth of approximately 0.09% per year was observed. The population density was 131.6 persons per km2. According to the Census, 75.8% of the population is ethnic Moldovan/Romanian with Russians (5.9%) and Ukrainians (8.4%) and Gagauz (4.4 %) being the largest minority groups. Some 60% of the population lives in rural areas. Chisinau, the capital city, has a population of some 664,7001. The average age of the population is 35 with about 30% under the age of 20.

1 2011.





Figure 1.1. National Transport Network, Moldova

Source: The Consultant





The population data reveals some regional variations in growth:

Continuing decline in population in the extreme north of Moldova and Transnistria;

Recent significant growth in population in Chisinau, Balti and to a lesser degree the intervening central-north belt;

Weaker but positive growth in population in the remainder of the country. A review of demographic reports published identifies close to 660,000 Moldovans residing permanently outside of their home country. See Figure 1.2 below. Figure 1.2. Estimated Number of Moldovans Living Abroad 2001 Through 2011

Sources: Rosstat, Ukrstat, Eurostat and Census statistics of several countries

As noted above, the population has been declining steadily over the period 2001 – 2011, as shown in Figure 1.3, though this has been an on-going trend since independence. From 2001 – 20122, population declined by a total of 83,640 persons. Most recently, however, the outflow has reduced significantly. Figure 1.3. Annual Decline in National Population 2001 - 2011

Source: NBS

2 Data before 1999 includes Transnistria and is therefore not directly comparable. Nevertheless, from the data provided by the National

Bureau of Statistics, it is clear that the population peaked in 1991, the year of independence and has continuously declined since.





Clearly, there are specific migration patterns, depending on traditional links, geographic proximity, openness of immigration countries, and (least) recruitment treaties between countries. Moldova is characterized by a strong migration eastward, to Russia and to some extent also to Ukraine and Belarus, and westward, to the Southern EU countries. Several hundred thousand Moldovans also hold Romanian passports, and thus are able to travel freely in the EU. Since Moldovan/Romanian is a Latin language, Moldovans are able to communicate rather easily in Italy, Spain, and Portugal. The three countries with the largest Moldovan population (ethnic residents as well as temporary migrants) are Russia (258,000), Ukraine (199,000) and Italy with 131,000 registered Moldovans. Migration to Romania, Czech Republic, Germany, Portugal, and Spain account for about 63,000 immigrants. See Figure 1.4. Data for US, Canada, Australia, France and Great Britain was not readily available. This lack of data may be partially caused by the fact that, there are an estimated 120,000 to 200,0003 Moldovans who have dual citizenship, also holding Romanian citizenship. These may leave the country on their Moldovan passport, but are registered as Romanians while in the EU. Furthermore, those that go to the east, especially Russia may not register their presence with the authorities there. Figure 1.4. Registered Ethnic Moldovans Living Abroad

Registered Moldovans Living Abroad ('000s)

0

50

100

150

200

250

300

Other Romania Czech

Republic

Germany Portugal Spain Italy Ukraine Russia

Registered Moldovans living abroad in (000)

Sources: Rosstat, Eurostat and Census statistics of several countries

These demographic patterns do strongly influence transport and logistics within as well as outside of Moldova. Population loss in the rural areas of Moldova makes it a challenge to provide adequate transport services. On the other hand the large number of Moldovans living abroad contributes to the strong increase in air travel.

3 http://www.rferl.org/content/Moldovan_PM_Satisfied_With_Romanian_Vote_Result/1897332.html





1.4. Economic and Infrastructure Legacy

Current day Moldova was not an independent state until 1918, when the then territory of Bessarabia gained independence at the end of the First World War. Before this date, it was part of the Ottoman Empire and before was linked to the Kingdom of Hungary. In more recent history, Bessarabia, which covered most of current day Moldova (and a small part of what is now Ukraine) but not the lands east of the Dniester River, was annexed by the Soviet Union to become the Moldavian Soviet Socialist Republic. The fact that the country has been often part of a larger entity, and later of the centrally planned Soviet Union created distortions in the economy as well as in the development of infrastructure. Especially the Soviet Union left an economy that was distorted, as some of the Moldovan industries developed as part of the planned economy to a size that perhaps would not have happened in a competitive market economy. In addition, central planners sometimes located factories at certain locations to provide for employment of family members of military personnel that would be stationed in particular locations and would otherwise be devoid of any gainful employment. To assess the level of distortion, it would be necessary to look at economic development at specific locations long before Moldova became a part of the planned Soviet economy. In this context, if a location was undeveloped at the turn of the 19th century or was in decline during this period, the long term economic viability may be questioned and when considering substantial capital infrastructure, this must be taken into consideration. Furthermore, Military Strategic consideration was, in addition to perceived or planned needs at the basis of infrastructure investments. Roads and rail were not necessarily constructed where economic need dictated, but especially rail infrastructure, served a military purpose. To create further challenges, during the Soviet period, financing of road infrastructure expenditure was based essentially on two separate sources. These were:

(i) Domestic revenues raised through the Road Funding Law of 1958, and (ii) Transfers of important resources from the budget of the Soviet Union, in the form of

specific subsidies to Moldova for the construction of “strategic roads”. Transfers of such subsidies essentially ended in the late 1980’s.The Road Funding Law of 1958 remained in place until 1993 and established a broad-based tax to finance the development and maintenance of the country’s road network. The tax rate was set at:

(i) A general rate of 1.5% of the revenues of all legal productive entities; (ii) A reduced rate of 0.5% on the turnover of all trading enterprises; and (iii) Varying percentages of the revenues of transport enterprises, depending on the type of

vehicle used. Overall, available resources for roads exceeded the absorption capacity of the road construction sector in most years. However, the early 1990’s were marked by a dramatic overall reduction of economic activity in Moldova, as a result of the disintegration of the Soviet Union. The ensuing collapse and shutdown of a large number of state enterprises rendered the long-standing system of road financing through taxation of general economic activity non-viable.





Overall, central planning, economic distortions and a period of relative over funding of infrastructure construction have resulted in a transport infrastructure network that today:

- May be over-dimensioned for the economic needs, capabilities for upkeep as well as the size of the population;

- May not be at the location where current and future economic activity takes place.

Thus, from the strategic perspective, whenever we consider current infrastructure, we need to ask ourselves the question if it is still serving a viable economic purpose as well as is dimensioned in line with the current population density and traffic flows, both domestic and international. Furthermore, the oversized infrastructure drains the maintenance budget, and comes at the expense of their quality. Moldova would probably be better off with smaller (but adequate) roads that are in good condition. Less, in this particular case, may be more. 1.5. The Current State of Affairs in the Logistics Sector The logistics sector in Moldova, which we for the purpose of this document consider private and public enterprise somehow involved in the movement of goods and passengers is made up of largely private enterprise in the road sector, a state owned railway, state owned and operated airports and both state and private airlines. In addition, we take border agencies as well as physical infrastructure as part of the sector mainly due to the link between performance and quality of infrastructure. In terms of performance, Moldova's overall rating in the Logistics Performance Index; a rather disappointing 104th position indicates that there are some problems to be addressed in the sector. Up to a point, this is also confirmed by the IFC trade across borders survey, though as can be noted from the table, the rankings contain some contradictions and inconsistencies. For example, it is hard to believe that a country like Uzbekistan, which is near the bottom in most surveys, could be performing better in the LPI. See Table 1.1. Table 1.1. Selected Rankings in Multi-year International Surveys (as of 2011-2012)

Selected Country Rankings in different surveys

Logistics Performance Index (WB)

IFC Doing Business

(overall score)

IFC Doing business (trade across borders)

WEF Global Competitiveness

Index

TI Corruption Perceptions

index

Latvia 37 21 15 64 61

Lithuania 45 27 28 44 50

Romania 59 72 72 77 75

Uzbekistan 68 166 183 No data 177

Ukraine 102 152 140 82 152

Moldova 104 81 134 93 112

Tajikistan 131 147 177 105 152

Total number of countries

155 183 183 142 183

Sources: IFC/TI/WB/WEF





Therefore, the rankings should be taken as an indicator but not too much should be read into exact ranking data. 1.6. The Governments Response Strategy The Draft National Development Strategy for Moldova 2012 – 20204 defines the Government objectives for the period as “accelerating economic growth and, implicitly, poverty reduction”. The strategy defines seven key development priorities that are expected to contribute to achieving the overarching goal of poverty reduction in Moldova. These development priorities are stated as follows:

Aligning the education system to labour market needs in order to enhance labour productivity and increase employment in the economy.

Public investment in the national and local road infrastructure in order to reduce transportation costs and increase the speed of access.

Reducing financing costs by increasing competition in the financial sector and developing risk management tools.

Improving business climate by streamlining the regulatory framework and applying information technologies in public services for businesses and citizens.

Reducing energy consumption by increasing energy efficiency and using renewable energy sources.

Financial sustainability of the pension system in order to ensure an appropriate rate of wage replacement.

Increasing the quality and efficiency of justice and fighting corruption in order to ensure equity for all citizens.

The specific objective of this strategy is to contribute to achieving the goal of poverty reduction by the government of Moldova through “facilitation of trade though improved performance of the Logistics sector in Moldova”. The facilitation of trade through improved logistics performance depends on the existence of trade and its resulting demand for logistics services. In this context though, it is important to remember that transport and logistics is not an end in itself but a means to achieve (facilitate) the successful development of other sectors such as manufacturing and for example agriculture. Thus, even the best logistics strategy with accompanying capital expenditure, enhanced border management and everything else that may facilitate the movement of goods both across the country and for exports cannot be of benefit if the rest of the economy is not able to produce goods and services that are competitive in the market. Therefore, it is important that this strategy is not taken as a stand-alone paper but as one of the strategic action plans that must be implemented to achieve the objectives. On the contrary, if expensive infrastructure is put in place without improved economic performance, it may become a drag on the economy due to the then crippling cost of finance and maintenance. 1.7. Moldova Economic Profile Moldova is the second smallest of the former Soviet republics and the most densely populated. Industry accounts for only 20% of its labour force, while agriculture's share is still more than one-third. It is landlocked, bounded by Ukraine on the east and Romania to the west.

4 Moldova 2020.

http://en.wikipedia.org/wiki/Moldova

http://en.wikipedia.org/wiki/Republics_of_the_Soviet_Union

http://en.wikipedia.org/wiki/Ukraine

http://en.wikipedia.org/wiki/Romania





Moldova ‘s GDP per capita is estimated at 2,128 USD in 2012 by the IMF. Despite improvements on the economy the Republic of Moldova remains Europe's poorest nation. Car ownership is correspondingly low, estimated at 118 per 1,000 persons on the basis of National Bureau of Statistics’ data. Road vehicle ownership in total is 190 per 1,000 persons. The needs for transportation of goods and the modal split are to a large extent determined by the future of the economy of Moldova. At the same time, economic development opportunities are affected by the availability of factor conditions, of which transport links are one, as discussed above under the section that describes competitiveness factors. 1.7.1. Current Trends

There is no document that readily describes a vision of the expected economic profile of Moldova in the medium and long term, e.g. a document that identifies what sectors of the economy may become important and where the centre of gravity of economic development will be. This however, considering the long lifespan of future infrastructure investments, is an important factor in relation to the “what” and the “where” of investment in key infrastructure. In absence of a comprehensive vision, we describe the current state of affairs and identified trends as available from various publications and will attempt to extrapolate these into a vision of future growth sectors and locations. 1.7.2. Current Trends in Location of Economic Development in Moldova One of the latest publications available that provides some guidance as to where economic activity is taking place is the 2011 Country Economic Memorandum of the Worldbank5. The document indicates that the centre of gravity of the formal economy is in Chisinau, which provides for 63% of all formal sector jobs in the country, as well as generating 78% of all formal enterprise revenue. In addition, 71% of all business enterprises are based in Chisinau while, indicating a clear trend, 85% of all new companies registered are established in Chisinau. Chisinau has also registered a substantial population growth, while Moldova as a whole has suffered from substantial emigration, mainly caused by both legal and illegal labour migration. 1.7.3. Economic Trends Moldova was, in the Soviet time a major producer of fruit and vegetables as well as a one of the leading wine regions for the Soviet Union. A 20 year absence of investment in the fruit (mainly apples) sector has resulted in a drop in productivity that will take many years to reverse. Other areas of non-animal agriculture provide some opportunities, though competitiveness (price and volume) limit the scope of future development. In addition, challenges exist in meeting the EU's strict marketing, hygiene and quality standards that are in place. A Project financed by the World Bank6 is expected to address some of the issues related to quality, market access and processing, providing future growth opportunities. The Wine industry has faced serious difficulties finding new markets after the 2006 ban on Moldovan wine imports into Russia, which resulted in a 50% drop of market size. It now competes in the EU against 5http://documents.worldbank.org/curated/en/2011/06/15549933/moldova-after-global-crisis-promoting-competitiveness-shared-

growth# (accessed 6 March 2012). 6 Moldova Agricultural Competitiveness Project.

http://documents.worldbank.org/curated/en/2011/06/15549933/moldova-after-global-crisis-promoting-competitiveness-shared-growth

http://documents.worldbank.org/curated/en/2011/06/15549933/moldova-after-global-crisis-promoting-competitiveness-shared-growth





other emerging markets (some of which are in the EU) as well as the more established “New World” wines from for example Australia, the USA and Chile. As the EU already faces oversupply of low quality “Table Wines”, quality and marketing are main factors that determine the future of the export opportunities into the EU. In addition to the traditional sectors above, some new potential pockets of economic growth have emerged in recent years. These have not just been identified by the World Bank report, but have received active investment in recent years and could provide the sources of growth that are urgently needed to provide employment and thus stem the decrease in the labour force that undermines the future economic viability of the country.

The sectors that are developing to a certain extent or have been identified as representing future opportunities are:

Textile;

Fashion accessories, (footwear and handbags7);

Metal products and vehicle components;

Home furnishings;

ICT and Software. 1.7.4. Domestic Opportunities As Adam Smith already argued over a century ago, productivity is a major factor determining the economic success of a country or region. Import substitution, often carried out by erecting barriers to protect uncompetitive industries is counterproductive and in the current era of free trade and free trade agreements not possible due to restrictions of what can be done. Thus, domestic opportunities must be created by exploiting comparative advantages to the fullest extent, even before concentrating on export. In this context, the Agri-Food sector, where Moldova has indisputably a comparative advantage that is not fully exploited is where domestic growth may be coming from. By improving quality and marketing and distribution, domestic producers should be able to compete against imports of especially processed (canned and bottled) food that are currently to be found in the supermarkets.

However, under the Deep & Comprehensive Free Trade Area (DCFTA) Moldova will have unlimited duty free access to the EU market but EU producers, often better funded (subsidised) and equipped with slick marketing tools will have also full access to the Moldavian market. This market access is subject to some safeguards, though these are limited to only the most extreme circumstances. 1.7.5. Future Geographical Outlook Though we cannot claim to be able to predict the future, in this section, we make some assumptions based on trends identified above. These assumptions are intended to assist us in the identification of future needs in terms of logistic services and indirectly, to prioritise investments between different transport modes, based on expected needs. Thus, we make the following assumptions:

7 Identified by the Competitiveness Enhancement and Enterprise Development Project (USAID).





We note that formal economic activity is concentrating in Chisinau and its close proximity. There is, given the current trend of high concentration of new company formation in Chisinau, reason to believe that the economy will concentrate in Chisinau and its close proximity. The second economic development pole of Moldova is Balti with a corridor of high development potential between the two cities;

The officially registered population has decreased in Moldova in the period 2005 – 2010 by about 40.0008 inhabitants. The official statistics most certainly understate the extent of migration and general decrease in population especially in rural areas. Though most likely slower, there may be a continued outflow of the population for the foreseeable future;

In detail, the population of Chisinau and its region has consistently increased over time in the period 1980 – 2010 while in the rest of the country all but three municipalities9 have seen a decline of their population. It is expected that this trend will continue and the population will become more and more concentrated in the Chisinau region;

Based on current trends, it is to be expected that the centre of economic gravity will be Chisinau with a potential linkage to the Free Economic Zone in Balti.

1.7.6. Future Sectorial Economic Outlook We above outline the potential locations of future development, in this section we explore the type of economic activity that we may expect to see developing in Moldova over the next years as well as their logistics needs based on the product characteristics. Broadly these sectors are:

Wine and spirits for domestic consumption and export;

Agro-Food, primary production with some processing for the domestic market and some export to third countries, mainly of primary production;

Textile and clothing, mostly but not exclusively for export with imports of raw materials for processing;

Fashion accessories, mostly for export;

Manufacturing of vehicle components by tier 1 and 2 manufacturers for various car manufacturers. Exclusively for export;

Home furnishings (furniture), both for the domestic market as well as under tolling10 arrangements for export.

In terms of logistics needs, each of the identified growth sectors has its specific needs. In addition, there are domestic transport needs related to the normal functioning of the economy as well as needs related to imports. In terms of transportation modes, the above identified sectors would be mostly relying on road transport to fulfil their transportation needs though multi-modal (road – rail) could develop over time, in line with developments elsewhere. In more detail we expect that within the mode the following specific equipment will be used:

8 The official statistics may understate the departure of the population. There is an understanding that there are many Moldovans who

have left the country without de-registering or letting the authorities know about their whereabouts. 9 Criuleni (on the border with Transnistria), Ocnita (north Moldova) and Gagauzia (south Moldova)

10 In case of tolling, raw materials are imported into Moldova, processed and the finished product is exported. This business largely

depends on differentiation in the cost of key inputs, in the case of furniture, low cost of labour.





Table 1.2. Equipment and Transport Mode used by Product Type

Type of product Equipment Possible Mode

Wine and Spirits (bottled wine) General purpose trucks Road

Wine and Spirits (Bulk) Bulk tanks or bulk containers Road / Multi Modal (depending on destination)

Agro Food (perishable) Temperature controlled trucks Road

Agro Food (processed, canned) General Purpose trucks Road / Multi Modal (depending on destination)

Textile / Clothing General Purpose trucks, specialized trucks for hanging garment or containers

Road / Multi Modal (depending on type of garment destination)

Fashion accessories General Purpose trucks or containers

Road / Multi Modal (depending on type of product or destination)

Vehicle Components General Purpose trucks Road only (due to Just in Time)

Home furnishings General Purpose trucks Currently road only, Multi Modal possible depending on destination.


1.8. Specific Factors Affecting International Transport of Passengers The international transportation of passengers is affected by several major factors in terms of its volume and the mode of transportation. The volume of transport of passengers is, up to a point determined by the level of economic activity in the country (business or work related travel) as well as the need to obtain a visa to certain countries. From analysis of the available statistical data, some trends can be identified. These are:

Rail travel decreased significantly over time. It experienced a large drop at the time of the 1998 Russian financial crisis, possibly due to the loss of many jobs in Russia;

Rail transport continues to decline up to today;

Other modes of transport were also affected by the 1998 crisis, but to a lesser extent,

Air travel has been growing briskly over the last years, growth accelerating in 2009 and onwards;

Passenger air traffic broadly splits between the north-eastern region with Russia, Ukraine, and other former soviet republics, a southern region with Turkey, Greece, Bulgaria, and south and western region with destinations such as Romania, Germany, Italy and other EU destination in the ratio of:

- North and East: 32 % - South: 26 % - South and West: 42 %

Russia and Turkey are the major destinations for Moldavian air travellers. Russia represented more than 29% of total passenger revenue in 2011 followed by Turkey-21%, Italy-14%, Germany-13% and Romania 8%. Russia, Italy and Germany are the fastest growing destinations for Moldova. The project experts assume that this increase is particularly resulted from growing labour outflow abroad which are regularly visiting their families in Moldova. Air travel to and from the EU has been liberalised following the Moldovan Government’s signing of an agreement with the ECAA in June 2012. This may result in the entry of low cost airlines into the Moldovan market, though even the threat of this happening will put pressure on airfares.





In addition, Moldova may benefit from Visa free travel to the Schengen countries in the foreseeable future, possibly in the next few years. Experience from other countries indicates that this will increase the number of travellers to the EU significantly. Thus, based on the past events and experience from elsewhere we can expect that:

International rail travel will continue to lose significance unless higher travel speeds on rail would be achieved;

Lower airfares will lead to increased demand for air travel;

Visa free travel to the EU will increase the number of persons travelling to the EU and these will most likely travel by road and air.

1.9. Demographic Factors and Car Ownership As noted above, the population has been declining steadily over the period 2001 – 2011, though this has been an on-going trend since independence. From 2001 – 201211, population declined by a total of 83,640 persons. This information though, does understate the outflow of the population, either those that left (semi) permanent as well as those that depart on seasonal labour migration. This lack of data may be partially caused by the fact that, there are an estimated 120,000 to 200,00012 Moldovans who have dual citizenship, also holding Romanian citizenship. These may leave the country on their Moldovan passport, but are registered as Romanians while in the EU. Furthermore, those that go to the east, especially Russia may not register their presence with the authorities there. Car ownership in Moldova is low in absolute terms with about 12 vehicles per 100 persons, but high in comparison with the GDP per capita. Lithuania, which started from the same baseline on independence has a GDP per capita of around 6 times higher, but has a car ownership of 55 per 100 inhabitants or around 4.5 times higher. Car ownership in Moldova has risen faster than GDP growth would normally allow for, possibly due to the fact that many cars may be remittance financed. A negative factor that may have dampened the car ownership increase is the tax treatment of import of second hand cars older than 7 years (from non CIS countries) under the pretext of environmental protection and road safety, though according to cynics more due to the lobbying of car importers. The limit presumably puts cars out of reach of the poorer rural population and may actually lengthen the life of even older cars, as it artificially will keep prices high. With regard to future development of car ownership, based on historic trends, it is not unreasonable to expect that the number of road vehicles will increase by anywhere between 5 and 10% per year over the next few years until the saturation rate, which is a bit higher than the EU 27 average of 460 vehicles per 1000 persons, has been reached. Extrapolating from current trends, a conservative estimate is that by 2035 a total of approximately 500 vehicles per 1000 persons may have been reached. This would result, assuming that no further decrease in the population takes place, in around 1,780,000 vehicles in Moldova.

11

Data before 1999 includes Transnistria and is therefore not directly comparable. Nevertheless, from the data provided by the National Statistical office, it is clear that the population peaked in 1991, the year of independence and has continuously declined since. 12

http://www.rferl.org/content/Moldovan_PM_Satisfied_With_Romanian_Vote_Result/1897332.html





1.10. Recent Trends in the Transport Sector in Europe

High fuel and labour costs as well as multiple toll and infrastructure charges have pushed the cost of road transportation in the EU up to unprecedented levels. As a result, international transport by road, which is most affected by the toll and infrastructure charges has become so expensive that the break-even point for the choice of use of rail as part of a multi-modal chain has reached 500km.

In other words, European transport companies are using combined road / rail transportation for most distances over 500km. This is mostly done by either putting semi-trailers on the train or containerising the cargo and sending the container by train over long distance. This scenario is, due to the relatively low wages in Moldova not yet fully relevant but it provides a window into the future, as overtime wages will increase and, all things being equal, the break-even point between modes will become lower and lower. Considering the above, we can reasonably expect that:

With the exception of bulk goods, most domestic transportation will take place by road;

In the short term, road will remain the preferred mode of international transport for most goods except bulk goods;

In the medium and long term, depending on the development in wages and infrastructure charges, international multi modal transportation will become the norm for non-bulk goods;

Bulk goods, both domestic and international will be transported by train for the foreseeable future. In international transport, depending on the origin, inland and maritime shipping may play a role.

1.11. EU Policies Having an Impact on Moldova's Logistical Modes

The EU, in its latest policy statements has indicated the intention to improve sustainability of transport networks by promoting inland shipping, short sea shipping and rail as multi-modal transport. This will result to the availability in, especially Romania of multi modal services that may affect the Moldovan international transport market by providing cost effective alternatives to road transport to and from the EU to Moldova. In this context, it is worth noting that heavy goods vehicles which are used as part of a multi-modal transport trip may be exempt from infrastructure charges. In the field of passenger transport, the EU on the one hand strongly has liberalised markets in all public transport modes (air, rail and bus) though on the other hand does have concerns about the environmental impact of growth of aviation on the environment. Thus, train travel over long distance, especially using high speed rail is actively encouraged and, due to cumbersome procedures at airports successful even though it may not be cheaper than air travel. As a result, many travellers prefer high speed rail when travelling distances up to around 500 km, not in the least due to that fact that, though rail is slower, its brings one directly to the city centre (or nearby) rather than somewhere far from the city.





2. ROAD TRANSPORT SECTOR IN MOLDOVA This chapter first reports on the road sector and network, its extent and condition in Moldova, then goes on to describe road usage and users including passenger and freight transport operations. Further sections describe border traffic and road safety in Moldova. 2.1. Ministry of Transport and Roads Infrastructure The Ministry of Transport and Roads Infrastructure (MoTRI) is the central organ of public control, which develops and realizes the policy of state in the sphere of transport and road infrastructure. According to the Decree 695 from 18.11.2009 of the Moldovan Government on the “Ministry of Transport and Roads Infrastructure Statement, its Structure and Staff number”, the main functions of the MoTRI are the following:

1. The introduction of the state policy for an improvement in the business environment in the sphere of responsibility;

2. Development, introduction and monitoring of development strategies in the sphere of responsibility;

3. A constant development and the renovation of the legal, analytical, decreeing, monitoring, technological and financial abilities of transport sector for purposes of the satisfaction of the requirements of other sectors of the national economy in so far as concerns of development and operation of transportation means;

4. Introduction and monitoring of the provisions of international agreements in the sphere of responsibility;

5. The creation of the mixed commissions and working groups, whose activity is governed by intergovernmental agreements and contracts in the sphere of transport and road infrastructure;

6. The development of the draft annual budget of Ministry and, if necessary, submitting the proposals for additional financing for the concrete actions; the control of budget funding use according to the designation.

The principal general credentials of the MoTRI are the following:

- Development of the national transport policy and strategies; - Harmonization of the current transport policies with the requirements of the European

integration process; - Financial management in the transport sector; - Establishing of state-owned enterprises and state property management in transport

sector; - Creation of the statistical database in transport sector; - Develops the free market and free competition in transport industries; - Initiates and leads the international talks on behalf of the Government in the sphere of

responsibility, represents Republic of Moldova in the international organizations and agreements;

- Supports and consults the local authorities in the sphere of investment programs and specific regulations in the sphere of responsibility;

- Develops the programs and investment projects in the sphere of responsibility; - Approves the investment projects of the national importance financed from the federal

budget, local budgets, special funds and other sources;





- Undertakes measures for creation, development and operating the international transport corridors;

- Undertakes measures for fulfilment the obligations of Moldova within the relationships with the EU in the sphere of responsibility.

As presented in Figure 2.1, MoTRI is headed by the Minister who has two deputy Ministers. One is responsible for the railway transport; the other deputy Minister is responsible for Road Transport. The structure of the MoTRI contains:

Top Management (Minister and Deputy ministers);

Cabinet of the Minister;

Department of International Relations and European Integration;

Legal Department;

Department of Analysis, Monitoring and Policy Assessment;

Land Transport Department;

Road Development Department;

Road Maintenance Department;

Rail Transport Office;

Waterway Transport Office;

Air transport Office;

Investigation Office;

Human Resources Office;

Accountancy Office;

Internal Audit Service

Secretarial Office.





Figure 2.1. Ogranisation Chart Of Ministry Of Transport And Road Infrastructure

Source: MoTRI

The Ministry of Transport and Road Infrastructure is the central public authority in charge of the development of Government policies and strategies related to transport and it is responsible for monitoring of their implementation. In this context, the Ministry has highlighted the following policy objectives:

Harmonization of transport policies and legislative framework in the transport sector in line with European standards;

the integration of the national road, rail, aviation transport system into the European network;

Promoting Multi – Modal transport, especially in international transportation.





The Creation and Development of the Network of International Transport Corridors The Helsinki Declaration of 1997 laid down a Europe wide transport policy based upon established EU principles. Transport network development in Moldova needs to take account of the resulting pan-European networks which include: the Trans-European transport network across the EU territory; pan-European transport corridors, the TINA network 46 (Transport Infrastructure Needs Assessment, now TEN-t), pan-European transport zones covering the basins of the Mediterranean, Black, Adriatic/Ionic seas and the region of Barents Sea of the European part of the Arctic; and Eurasian connections, in particular the Transport Corridor Europe-Caucasus-Asia TRACECA. Two pan-European corridors cross the territory of Moldova. Corridor VII encompasses the Danube River and is the main corridor for inland water transport connecting Western and Eastern Europe through the Rhine, Main and Danube. At its southern extremity, Moldova has a short frontage on to the River Danube Corridor IX is the longest of the 10 pan- European multi-modal transport corridors starting in Helsinki and ending at the Alexandropoulos port in Greece. Its Moldovan section connects the Romanian border at Leuseni with Chisinau and the Ukraine border via Transnistria. These corridors are shown in Figure 2.2 below. Figure 2.2. International Transport Corridors in Eastern Europe

Source: www.mt.ro

The main purpose for developing international transport corridors in Moldova is the creation of favourable conditions for the attraction of international transport flows into Moldova and the improvement of internal transport communications.

http://www.mt.ro/





The following main objectives are:

Coordination of transport infrastructure development for the purpose of Eurasian transport systems integration for the unimpeded passage of passengers and goods across national borders;

Rationalization, based on logical principles and improved data, of the interaction between various types of transport in the inter-modal transport chain;

Reduction of tariffs for the transportation of passengers and goods via the increased use of the national transport network and a more effective utilization of resources;

Development of cross-border cooperation;

Increasing population mobility and easing access to transport services for every region of the country;

Assisting in the development of international tourism and cultural ties. From a Moldovan perspective, the main forum for the discussion of international transport network development is the Eastern Partnership Transport Panel (EPTP). A map submitted to the EPTP by Moldova is attached to this report as Appendix VI. Figure 2.3. International Motorways in Eastern Europe

Source: www.mt.ro

http://www.mt.ro/





Land Transport Infrastructure Strategy

The Land Transport Infrastructure Strategy (LTIS) 2008-2017 was approved by the Government of Moldova in February 2008. The main objective is to provide the country with an efficient transport system that supports citizens’ need for mobility and which facilitates trade in domestic and international markets, with a strong view of the role Moldova can play as a bridge between EU and CIS countries.

The following key roads sector reforms and policy actions are outlined in the LTIS:

Reform of road maintenance financing;

Reform of road maintenance organization and contracting;

Introduction of axle load control system;

Measures to improve road safety.

The LTIS is still valid, but the Government of Moldova is expanding the scope of the LTIS through the development of a broader Transport and Logistics Strategy (TLS) which:

(i) incorporates and updates the LTIS; (ii) covers other transport sub sectors.

Two areas of concern within the road sector where LTIS has yet to prove as effective as anticipated are the funding of road maintenance which has consistently failed to meet LTIS targets and road safety where progress has been slow. In addition to these particular areas the Transport and Logistics Strategy (TLS) will:

Reflect changes in the timing of investments;

Include the latest status of funding sources and amounts;

Assess updated road maintenance costs;

Review the implementation of the Road Sector Program Support Project.

The TLS culminates in the production of a Draft Transport and Logistics Strategy which it is planned will become the basis for agreement between the Government of Moldova and the international community in shaping the future development of the transport sector in the country.

2.2. National Road Network

The extent of the Moldovan road network (excluding Transnistria) has changed little over recent years, with a quoted total length in 2011 of 9,322km, of which 3,335km are national roads. Compared to ten years earlier this represents a reduction in the total length of 1.2% but an increase in national road length of 0.4%. An upgrading in status from local or other to national in the case of certain roads contributes to these changes. This process of upgrading specific roads to national status continues with the 2011-14 Road Programme, including the L376 between Cornesti and the M14 for rehabilitation following which, the road is expected to be upgraded to Republican or “R” status.

The MTRI have recently had a draft list drawn up of candidate local roads for promotion to Republican status. These number 35 separate roads and total 1,027 km in length. Of this, 56% is currently asphalt, 37% gravel and 7% earth surface. Traffic data is not currently available for these roads. Condition surveys have been carried out in the first half of 2012 and the results are summarised in section 2.1.2.





The process of selection is primarily driven by improving connections between, and access to, Magistral and Republican roads. MTRI are frequently subject to political pressure to improve local roads because technical and financial resources at a local level are inadequate. This draft list is an attempt to respond to such pressures although were such a shift to be implemented the responsibilities of the MTRI and SRA would increase, not least in the need to monitor the usage and condition of these additional roads. The density of the road network, 314 km per 1,000 km2 and 2.6 km per 1,000 persons, is considered reasonable for a country of Moldova’s development and is a legacy of the Soviet era. The Soviet Union bequeathed Moldova, as already mentioned, a well-developed road network with one consequence being that there has been little recent need for expansion, hence the static total length of road over the period 2001-11. The immediate post-Soviet years were also characterised by an economic collapse and consequently by a significant reduction in road traffic which further emphasised the more than adequate extent of the road network. The post-Soviet economic decline also produced a considerable reduction in maintenance expenditure on infrastructure including roads with the result that the primary objective at present is rehabilitation and protection of the existing network rather than further expansion. The shortfalls in road maintenance have been emphasised over the last five to ten years by increased national economic activity and hence higher traffic volumes. 2011 data provided by the SRA shows that 92.5% of national road and 46.1% of local road length is paved. This gives an overall figure of 62.7% paved for the entire network of 9,322 km. Table 2.1 below summarises the road network by surface type as of early 2011. The data is for those roads which are the responsibility of SRA and excludes Transnistria. Table 2.1. Length of Road Network (kilometres) by Surface Type, 2011

Status Concrete Asphalt

Concrete Surface

Treatment Gravel Earth Total

National: 287.4 2657.1 139.8 251.0 0.0 3335.3

% 8.6% 79.7% 4.2% 7.5% 0.0%

Magistral 249.1 550.2 18.3 2.3 0.0 819.9

Republican 38.3 2106.8 121.4 248.7 0.0 2515.3

Local 41.6 2374.0 342.6 2716.4 512.5 5987.0

% 0.7% 39.7% 5.7% 45.4% 8.6%

Total 328.9 5031.0 482.3 2967.4 512.5 9322.2

% 3.5% 54.0% 5.2% 31.8% 5.5%

Source: SRA





Figure 2.4. Road Network by Surface Type

328.9

5031.0

482.3

2967.4

512.5km

Concrete

Asphalt

Surface Treatment

Gravel

Earth

Source: SRA

Figure 2.5. Road Network by Road Status

819.9

2515.3

5987.0

Magistral

Republican

Local

Source: SRA

The 328.9 km of concrete surfacing is another legacy of the Soviet era although this figure is less than five years ago as a result of limited sections of concrete road being overlaid by asphalt. The M14, most of which has a concrete surface, forms the majority, 190 km, of the length of rigid pavement. 2.1.1. Road Classification Moldova has traditionally used the SNiP classification of roads which combines function and standard with traffic volumes. SNiP has five main categories of road with specified numbers of lanes, road widths and shoulder widths. Category 1 includes all those road sections with four or more lanes. There is no distinction between four and six lane roads. The only subdivision of Category 1 relates to median and roadbed widths. In addition, there is no recognition of three lane roads of which there are limited sections in Moldova, for example parts of the R2.





The following section provides an excerpt from SNIP relating to road classification. Excerpt from SNIP: “1.1. Automobile roads on all their length or on separate sections, depending on the calculation traffic volume and their administrative and community importance, are divided in categories according to Table 1” (see Table 2.2 below). Table 2.2. SNiP Road Classification

Note: Number of Lanes I-a and I-b: 4;6;8 II :2 III :2 IV :2 V :2

The number of lanes on roads of I category should be set depending on traffic volume and landscape according to Table 2.3.

Table 2.3 Number of Lanes According to Traffic Volume

Landscape type Traffic volume, in vehicles/24 hrs. Number of lanes

Flatland and cross-country from 14000 to 40000 from 40000 to 80000

from 80000

4 6 8

Source: SNiP

The SRA road network database includes the road category for each listed road section. However, the sectioning is such that a number of sections comprise more than one category and are

Road category

Calculation traffic volume, vehicles/24 hrs. Administrative and community

importance for passenger cars

in transport values

I-a over 14 000 over 7 000 Auto routes of state importance (including interstate roads)

I-b II

over 14 000 from 6 000 to 14 000

over 7 000 from 3 000 to 7 000

Automobile roads of state (except I-a category) importance, of republic or oblast importance

III from 2 000 to 6 000 from 1 000 to 3 000 Automobile roads of state, republican, oblast (except I-b and II categories) importance, of local importance

IV from 200 to 2 000 from 100 to 1 000 Automobile roads of republican, oblast, or local importance (except I-b, II, and III categories)

V below 200 below 100 Automobile roads of local importance (except III and IV categories)

Notes: 1. The traffic volume in transport values should be used, if the percentage of passenger cars amount to less, than 30% of total volume. 2. The category of approach roads to industrial companies is set according to the traffic volume for roads of I-b - V categories. 3. When similar requirements are set in the text for roads of I-a and I-b categories, they will be described as I category.





classified as, for example, 1-2. Very limited sections are not given a road category. Table 2.4 and Figure 2.6 below summarise the classification of national roads on the basis of the SRA dataset.

Table 2.4. Length of National Road Network (Kilometres) by Class and Surface Type, 2011

Class Concrete Asphalt

Concrete Surface

Treatment Gravel Total

No. Width (m)

1 15-30 34.9 49.0 83.9

1-2 16.1 16.1

2 7.5 232.2 483.3 4.8 720.2

2-3 54.5 54.5

3 7.0 2.5 1497.3 82.9 63.7 1646.4

3-4 2.9 174.9 33.8 58.6 270.2

4 6.0 14.9 374.9 23.0 121.1 534.0

not specified 7.2 2.8 10.0

Total 287.4 2657.1 139.8 251.0 3335.3

Notes: AC = Asphalt Concrete, ST = Surface Treatment Source: SRA/SNiP

Figure 2.6. National Road Network by Road Class

83.9 16.1

720.2

54.5

1646.4

270.2

534.0

10.0

km 1

1-2

2

2-3

3

3-4

4

not specified

Source: SRA

It is evident that the vast majority of the national road network consists of two-lane carriageways. Less than 100km of total national road length is classified as category 1, 3% of the total length. It should be noted that these category 1 sections are classified as such on the basis of traffic levels and do not meet all the highway standard requirements of SNIP. For example, strict adherence to SNIP requires grade-separation for category 1 roads but there are no fully grade-separated roads in Moldova. There is no category 5 or earth roads within the national road network. Table 2.5 and Figure 2.7 below summarise the classification of local roads on the basis of the SRA dataset.





Table 2.5. Length of Local Road Network (kilometres) by Class and Surface Type, 2011

Class No. Concrete Asphalt

Concrete Surface

Treatment Gravel Earth Total

2 3.6 8.1 11.7

3 5.8 183.0 15.4 84.8 7.0 296.0

3-4 40.9 17.8 30.2 0.2 89.1

4 26.9 2095.9 308.1 2463.5 316.3 5210.7

4-5 11.1 47.4 36.6 95.0

5 5.2 34.6 1.3 82.2 152.5 275.7

not specified 0.4 8.3 8.7

Total 41.6 2374.0 342.6 2716.4 512.5 5987.0

Notes: AC = Asphalt Concrete, ST = Surface Treatment Source: SRA/SNiP

The preponderance, 87%, of local roads is class 4, 6 m single carriageways. The commonest surface types are asphalt concrete, 40%, and gravel, 45%. Figure 2.7. Local Road Network by Road Class

11.7 295.99

89.11

5210.7

95.04

275.738.7

km

2

3

3-4

4

4-5

5

not specified

Source: SRA

Almost all national roads in Moldova have either a speed limit of 90kph, for rural areas, or 50 kph, for urban areas including village sections of inter-urban roads. Roads in residential areas, included within the SRA’s local classification, have a speed limit of 20kph. These values are laid down in the Driving Regulations of Moldova. 2.1.2. Road Condition There has been a significant decline in the condition of the Moldovan road network since independence and only in recent years has there been any success in reversing that trend. Figure 2.8 presents the evolution of the Condition of National Roads 1992-2010. The National Transport Strategy Study of 2007 stated that 7% of national roads were in good to fair condition and 93% in poor to bad condition. The Road Maintenance Reform Study by SweRoad in 2010 gives 32.4% in fair to good condition and 67.6% in poor to bad condition.





Figure 2.8. Evolution of the Condition of National Roads 1992-2010

Source: www.particip.gov.md

National Development Strategy of the Republic of Moldova for 2012-2020 states: “Moldova is in an intensive process of road degradation. If 70% of the length of national roads were in good condition in 1992 then 45% were in good condition in 1998 and only 7% in 2006. Although the condition of local roads was less examined, the study of 1,500 km (out of 6,000 km) of local roads, conducted in 2006, found a bad and very bad condition of about 96% of their length. Also, an improvement in the condition of roads has occurred in the past two years (2010-2011) in connection with increased contributions to the road fund (from MDL 241 million in 2009 to MDL 788 million in 2011 and 1024 million in 2012). However, these contributions are not sufficient to restore the entire road network to an appropriate state.” CONDITION ASSESSMENT Roughness data covering 41 national roads has been received from SRA. This data consists of average IRI (International Roughness Index) per kilometre by road and year over the period 2000 to 2012. There are many gaps in the dataset, for example there is no data for 2007 while other years and certain roads are poorly represented. The 2012 data, covering 15 roads, was collected by the Consultant in January. The data does not reveal clear trends in road surface condition and the gaps hinder confirmation of the improvement indicated by the 2007 and 2010 studies. However, concentrating only on those roads and those years with the most complete data series suggests that road surface condition was worsening between 2001 and 2003 and improving in 2009-10. 2011 and 2012 data are, to date, insufficient to confirm this recent trend of improvement. 2010 levels of roughness appear to be broadly similar to those for 2001. Taking all the most complete datasets gives an average roughness in IRI of 6.1m/km over the period 2001-10 and 6.2m/km if the years 2004-6 with substantial but lesser datasets are included. These average values are very close to the averages for 2010 which indicates that the condition of the national road network has not changed significantly over the last decade. An average roughness of 6.1-6.2m/km shows that, whatever the improvements of recent years, the national road network, as represented by the surveyed sections, remains in no better than adequate condition.

http://www.particip.gov.md/





It is not easy to draw conclusions on the basis of this data and more information was required to confirm that the overall condition of the national road network of Moldova is improving. LOCAL ROADS From 1992 the maintenance of local roads decreased dramatically, which caused a high level of distress especially for gravel and earth roads which together consist of 54% of the total local network. Most local roads have inadequate riding quality. According to the SweRoad study carried out in Moldova in 2010 the condition of local roads network is shown in Figure 2.9 below. Figure 2.9. Local Road Network Condition in 2010

Source: SweRoad/SRA

ROAD CONDITION SURVEYS 2012 The Consultant has carried out an extensive road condition survey as part of the current study to provide an up to date assessment of the condition of the national road network. This survey included road roughness measurements using a bump integrator (BI) in conjunction with ROMDAS (Road Measurement Data Acquisition System) plus a visual condition survey. ROMDAS is a low cost modular system designed to collect road and pavement data using any vehicle. In addition to an extensive sample of the national road network the condition survey covered a sample of local roads including some which are being considered for reclassification to Republican status. The local road survey consisted of roughness measurements on all selected roads plus a visual condition survey on a reduced sample, including roads in each of the three main regions of the country, north, central and south. The surveys were carried out in the first half of 2012. Table 2.6 below provides a summary of the extent of the 2012 road condition analysis including roughness data collected as part of recent national road studies.





Table 2.6. Summary of Coverage of 2012 Road Condition Surveys

Type of Survey

Road Category

National Local Total

Km km km

Roughness 2,859 (86%) 953 (16%) 3,812 (41%)

Visual condition 780 (23%) 228 (4%) 1,008 (11%)

Total Road Network 3,335* 5,987* 9,322* * Excluding Transnistria Source: The Consultant

Figure 2.10 and Table 2.7 on the following pages present the road sections covered by the condition surveys. The visual condition survey covered structural defects of the road surface:

Potholes

Cracking

Rutting

Edge Break Distresses such as bleeding or ravelling were not included. The visual condition survey used the following qualitative classes:

Good

Fair

Poor

Bad The following roughness (IRI) classification based on guidance from HDM-4 was used:

Good = <4 IRI

Fair = 4-6 IRI

Poor = 6-8 IRI

Bad = >8 IRI





Figure 2.10. Road Condition Survey Coverage, 2012






Table 2.7. Roads Included in Visual Condition Surveys 2012

No. Road Name Length

km

M21 Chişinău-Dubăsari-Poltava (Ucraina)* 36.8

R10 Ocniţa-Ruseni 19.7

R11 Ocniţa-Briceni 34.6

R12 Donduşeni-Drochia-Pelinia-M14 62.3

R13 Bălţi-Şoldăneşti-Rîbniţa(de la inter.M2 pina la Ribnita) 49.6

R17 Făleşti-Pîrliţa 32.4

R19 R13-Cunicea-Camenca 30.2

R2 Chişinău-Bender 42.5

R23 Criuleni-Brăneşti-Ivancea-M2 35.6

R25 Bucovăţ-Nisporeni-Bărboeni 46.0

R3 Chişinău-Hînceşti-Cimişlia-Basarabeasca 65.0

R32 R2-Puhoi-Căinari-Sălcuţa 47.7

R37 Ciadîr-Lunga-Comrat-Cantemir 78.9

R56 Cania — Baimaclia — Taraclia de Salcie — R38 47.6

R7 Soroca-Drochia-Costeşti-frontiera cu România 80.0

708.8

No. Road Name Length

km

L107 Soroca-Căinarii Vechi 19.90

L178 Olişcani-Pecişte-Chiştelniţa-Codrul Nou 40.00

L36 Lipcani-Duruitoarea Nouă 74.89

L390 Pîrliţa-Nisporeni 40.10

L464 R3-Rusestii Noi-Ulmu-M1 23.50

L481 Ţînţăreni-Geamăna-Ochiul Roş-Constantinovca 23.20

L568 Lăpuşna-Cărpineni-Voinescu 30.56

L671 Ciumai-Moscovei-Tătăreşti 38.69

290.84


The results of the condition surveys are summarised in the following tables and figures.





Table 2.8. Summary of Road Roughness Survey Results

All Roads, km National Roads, km Local Roads, km

Good 175 Good 156 Good 19

Fair 725 Fair 488 Fair 237

Poor 1202 Poor 924 Poor 278

Bad 1710 Bad 1292 Bad 419


Figure 2.11. Summary of Road Roughness Survey Results, National Roads

Figure 2.12. Summary of Road Roughness Survey Results, Local Roads

National Roads Condition by Roughness

5%17%

32%

46%

Good Fair Poor Bad

Local Roads Condition by Roughness

2%25%

29%

44%

Good Fair Poor Bad

Source: The Consultant Source: The Consultant

Figure 2.13. Summary of Road Roughness Survey Results, All Roads

Network Condition by Roughness

5%19%

32%

44%

Good Fair Poor Bad


Table 2.9. Summary of Visual Condition Survey Results

All Roads, km National Roads, km Local Roads, km

Good 6 Good 6 Good 0

Fair 208 Fair 159 Fair 49

Poor 676 Poor 520 Poor 156

Bad 118 Bad 95 Bad 23






Figure 2.14. Summary of Visual Condition Survey Results, National Roads

Figure 2.15. Summary of Visual Condition Survey Results, Local Roads

National Roads Condition by Visual Survey

1% 20%

67%

12%

Good Fair Poor Bad

Local Roads Condition by Visual Survey

0% 21%

69%

10%

Good Fair Poor Bad

Source: The Consultant Source: The Consultant Figure 2.16. Summary of Visual Condition Survey Results, All Roads

Network Condition by Visual Survey

1% 21%

66%

12%

Good Fair Poor Bad






Figure 2.17. Visual Condition Survey Results National and Local Roads






The 2012 road condition surveys have measured 41% of the total network for road roughness and conducted visual condition surveys on 11% of the network. The results of the surveys can be summarised as follows:

The overall picture is of a road network in predominantly poor to bad condition: the visual condition assessment shows 78% of surveyed road length classed as either poor or bad

There is very little difference between national roads and local roads in terms of visual condition;

The more extensive roughness survey gives similar figures, 76% of all roads being classed as poor or bad, 74% for national roads and 78% of local roads;

These figures are generally comparable with those from the SweRoad survey of 2010 which suggests that the decline in the overall quality of the road network may have been arrested but in part because there is little room for further deterioration; there is, in fact, a great deal of work to be done to restore the road network to a generally satisfactory condition;

The data sample is considered representative, the roughness measurements covering just over 40% of the total network and more than 85% of the national network while the local roads selected covered the different regions of Moldova and represented the various functions and categories of local road.

Based on the results of the road condition surveys described above The Consultant’s assessment of the overall (roughness and visual distress) condition of National Road Network of Moldova is presented in Table 2.10 for National Roads and in Table 2.11 for Local Roads.

Table 2.10. Road Network Condition (National Roads)

Condition Km %

Good 216.8 6.5

Fair 653.7 19.6

Poor 1,811.1 54.3

Bad 653.7 19.6

Total 3,335.3 100.0 Source: The Consultant

Table 2.11. Road Network Condition (Local Roads)

Condition Km %

Good 0.0 0

Fair 1,287.2 21.5

Poor 4,095.1 68.4

Bad 604.7 10.1

Total 5,987.0 100.0 Source: The Consultant

The surveys are acknowledged to be a snapshot sample of the road network in 2012, particularly with regard to local roads, and there will have been differences of methodology with the SWEROAD survey of 2010. However, the surveys do indicate that the general decline in the condition of the road network has been arrested. It is, perhaps, too early to expect major improvements in road condition as yet. Significant international funds for road improvement in Moldova only recommenced within the last two years. The Road Fund, meanwhile, is used mainly for periodic, recurrent and routine maintenance, and as such, does not tend to lead directly to significant changes in overall surface condition.





2.2. Traffic Data and Observed Traffic Levels SRA’s latest traffic count dataset indicates steady annual growth disrupted in 2008-9 when the national economy went into reverse as a result of the international financial crisis and subsequent recession. Average traffic growth as revealed by the SRA count data was 3% per annum between 2007 and 2011. The count data suggests that over recent years traffic growth has shadowed economic growth but has generally been less volatile than GDP. SRA have provided their latest traffic count dataset which consists of two components:

ATC data for 15 stations covering the years 2009 to 2011. The stations cover Magistral and Republican roads. Total vehicle ADT by month is given together with AADT by year. The Automatic traffic counts were accompanied by a map indicating position of the posts.

MCC (Manual Classified Count) data for 57 stations covering the years 2007 to 2011. Again, the stations cover Magistral and Republican roads. The data collection programme consists of a one day survey every quarter (although the dataset has gaps with certain stations not being surveyed each quarter or even each year) and use a sevenfold vehicle classification as follows:

- Motorcycle - Car - Minibus - Rigid Goods Vehicle (<3.5 tonne) - Rigid Goods Vehicle (>3.5 tonne) - Large Bus - Articulated Goods Vehicle

The traffic count data is summarised in Appendix 1. The Manual Classified Counts provided by SRA have been checked and positions marked on a map and highlighted in order to show their spatial distribution. The Manual Classified Counts have been adjusted and formulas corrected to obtain the correct average of traffic volumes for 2011 (traffic data is recorded each quarter of the year). In the event of there being less than four recordings per year, recordings were factored by their monthly coefficient and the average of the corrected values has been made. The count data suggests that over recent years traffic growth has shadowed economic growth but increased less rapidly than GDP with an average elasticity, 2007-11, of 0.99. When the economy went into recession for one year traffic growth did not stop but slowed up before accelerating the following year. Passenger vehicles show increases broadly in line with total vehicles while goods vehicles have generally lower and more uneven growth rates. In addition to the AADT data provided by the SRA further data was obtained from:

Recent studies by The Consultant

Other recent studies Table 2.12 below provides a summary of the major highway routes in Moldova by 2011 AADT, including all those roads with SRA survey stations and a 2011 AADT in excess of 2,000 vehicles (MCC locations in or very close to large towns have been excluded).





Table 2.12. Summary of 2011 Annual Average Daily Traffic (AADT) by National Road

Road No. From To Km 2011 AADT

M1 Chisinau Leuseni bp

11 9,778

58 2,845

91 3,716

M2 Chisinau Soroca

11 12,649

33 11,004

71 4,559

84 2,201

119 2,018

146 2,461

M3 Chisinau Giurgiulesti

82 3,747

109 2,280

199 1,431

M14 Briceni Pervomaisc bp

695* 2,885

706* 4,418

714* 6,754

M21 Chisinau Ukraine border 7 13,391

39 3,289

R1 Chisinau Sculeni bp 12 9,669

27 6,501

R2 Chisinau Bender 23 9,334

35 7,260

R3 Chisinau Basarabeasca 23 5.932

48 2,181

R7 Soroca Costesti bp 13 2,293

R8 Otaci Edinet 2 2,808

29 3,696

R14 Sarateni (M2) Balti 34 6,463

50 3,818

R20 Calarasi Rezina 41 2,394

R25 Bucovat Barboieni 13 3,478

R30 Anenii Noi Tudora bp 60 5,586

81 2,056

R34 Hincesti Slobozia Mare 128 2,915 Source: SRA * km from Brest (Belarus)

It is evident that, in general, traffic volumes are modest with very few count stations recording 2011 AADT estimates in excess of 10,000 vehicles. Indeed, a majority of stations produce AADTs of less than 5,000 vehicles. Of the three stations with flows higher than 10,000 vehicles two are on the M2 and one is on the M21. All of these high count stations, together with one each on the M1, R1 and R2 which carry more than 9,000 vehicles per day, are within 50 km of Chisinau. Most of the higher observed traffic flows are in the centre of the country, particularly in the belt between Chisinau and Balti, Moldova’s largest two cities (excluding Transnistria). Socio-economic indicators such as population growth and employment data suggest that this is currently the most dynamic part of the country. Traffic volumes in the north and south of the country, outside the central belt, rarely exceed 3,000 vehicles per day.





2.2.1. Principal Origins/Destinations The SRA do not carry out regular origin/destination (OD) surveys and only occasionally are they included as part of specific studies so data is limited. However, the travel patterns revealed by the reasonably extensive traffic count data give a good indication of the major attractors and generators of traffic in Moldova. As mentioned above the busiest part of Moldova in terms of highway traffic flows is the belt between the central and northern regions. The principal driver is Chisinau, followed by Balti and, to a lesser extent, the border crossings, including with Transnistria, within this belt. Traffic levels reduce steadily with distance from Chisinau and it is apparent that there is considerable movement between the capital and its outer suburbs, satellite towns such as Straseni on the R1 and Singera on the R2 and the capitals of neighbouring districts such as Orhei and Hincesti. The pre-eminence of Chisinau in the economic life of Moldova is clearly shown. Balti is the most important provincial generator of highway traffic. The significance of international traffic, and the importance of the role played by the road sector in such traffic, is also revealed by the count dataset. The busiest routes all connect to a border crossing, if those with Transnistria are included, although flow levels are significantly lower on the approaches to the national border than on sections closer to Chisinau. Figure 2.18 below shows the principal highway traffic movements in Moldova.





Figure 2.18. Main Traffic Flows in Republic of Moldova






Section 2.8 below provides a summary of the highway traffic forecasting work carried out by The Consultant as part of the current study and describes the definition and analysis of a Core Road Network for Moldova based to a significant degree on the existing traffic flows detailed above and mapped in Figure 2.18. 2.3. Vehicle Fleet and Ownership Registered car ownership has grown by 56% over the period 2004-2011, a rate of 6.6% per annum. Total vehicle ownership, assisted by a rapid expansion of the truck fleet, has grown by 69% or 7.8% per annum. In relation to GDP growth for Moldova, as quoted by the IMF, car ownership produces an elasticity of 1.16 and total vehicle ownership an elasticity of 1.58. These high growth rates reflect the low base from which Moldova is growing, the economy having contracted spectacularly in the 1990s, reducing by more than 40% between 1992 and 1999 when the economy started to turn around. Only in 2011, it is estimated, did the absolute size of the national economy, in dollar terms, exceed that in 1992. Car ownership was only 75 and vehicle ownership 111 per 1,000 people in 2004. Moldova’s ownership rates (118 cars and 190 vehicles per 1,000 persons) are inevitably low by European standards but roughly comparable to neighbouring Ukraine and during this recovery phase for the economy have easily outstripped economic growth itself. Bus registration has grown much more slowly than car or truck, by 8% since 2004. Figure 2.19. Growth of Registered Vehicles by Year

0

100000

200000

300000

400000

500000

600000

700000

2004 2005 2006 2007 2008 2009 2010 2011

Nu

mb

er

of

regi

ste

red

ve

hic

les

Years

Trailers and Semitrailers

Cars (including taxi)

Buses and Microbuses

Trucks

Source: NBS/Date.gov.md

2.3.1. Vehicle Usage In terms of vehicle usage there is no data available for private cars. Combined bus and taxi usage (passenger kilometres) has increased by 25%, or 4% per annum, between 2004 and 2011, almost exactly in line with GDP growth. Trolleybus use, confined to Chisinau and Balti, has declined by 48% over the same period.





Freight tonne kilometres by road have increased by almost 50% from 2004, increasing its modal share from 42% to 71% as rail usage has declined drastically. National vehicle ownership and usage data as provided by the National Bureau of Statistics is detailed in Appendix 2. Figure 2.20 shows the composition of the vehicle fleet in Moldova. Figure 2.20. Composition of Moldovan Vehicle Fleet 2011

420,462145,856

43,036

31,179

28,40021,320

13,052 1,758

Cars

Trucks

Trailers

Tractors

Motorcycles

Buses

Semi-trailers

Other

Source: NBS

2.3.2. Road Haulage Industry The road freight industry is privately controlled and is organized by the International Association of Road Hauliers of Moldova (AITA) which was established in 1992. In 2011 AITA were responsible for 80,000 runs within the TIR system, an increase of 8.5% over 2010 and a recovery to pre-2008/9 economic downturn levels of operation. AITA claims to contribute more than 11% to GDP. This claim is difficult to verify but an outline assessment by The Consultant indicates that it is of a reasonable order of magnitude. There are basically two types of shipping and freight forwarding companies in Moldova. On one hand, the forwarding companies whose business is strictly freight forwarding, i.e. dispatching and booking space for shipments on carrier companies. This type of company specializes in just one mode of transport, either air or rail. A few of them would combine their core business with trucking by contracting private carriers or running their own truck fleet. A lower number of companies would also have sea freight forwarding by carriers operating at the nearby ports of Ukraine and Romania. Some forwarding companies combine all four modes of transport, but have just one mode of transport as its core business. As of recent, many Moldovan forwarding companies have also become providers of customs brokerage services. On the other hand, there are the carriers, most of them trucking companies. Some of them would combine to some degree goods haulage (trucking) with freight forwarding by other modes of transport, usually railway or sea.





A few forwarding companies are known to provide warehousing services. However, warehousing services are generally separated from the forwarding or transportation business. A distributor will have to consider the warehousing aspect separately from the other links in the supply chain. The available warehouses are old Soviet-type facilities that do not fit Western storage standards, often lacking proper heating, ventilation or humidity control. A few underwent some type of modernization. Chisinau also has a number of specialized warehouses for frozen products. Such warehouses as a rule are run by specialized companies, such as meat processors, that provide overcapacities for rental. By some accounts, the warehouse space currently available in Chisinau is insufficient. Even though there are transportation companies and drivers that can be hired to provide transportation of goods, Moldovan companies tend to use their own account transport for distribution or supply of goods. Moldova is a relatively small market, without challenging terrain and therefore, does not need extensive investment in developing the distribution logistics. According to a World Bank report, majority of Moldovan firms use their own transport for distribution. The high share reflects the low quality of services available and the low initial investment in own equipment and transport staff. Many firms complain that on-time delivery and flexibility are the “weak links” in the supply chain as these services are rarely provided by Moldovan transportation companies. The demand for domestic distribution is low due to few countrywide retail operations as a result of low purchasing power. The common approach to identifying companies that provide transportation and logistics services in Moldova is through the local classified ads newspaper Makler, which publishes announcements in Russian. Companies may also contact stores, local business associations, trade consulting companies and the Moldovan Chamber of Commerce to inquire of providers of transportation and logistics services. A list of organisations and companies in the freight forwarding and transportation business is provided below. Table 2.13. List of Freight Forwarding and Transportation Business

Road Railway

LKW Alex Spedition 35MilescuSpataru St., Chisinau, MD-3400 International trucking and road freight forwarding Translogistic 15TraianBlvd., Office 5, Chisinau, MD-2060 Freight forwarding by railway and road to CIS, Western and Eastern Europe Trame Trans 13DimoSt, Chisinau, MD-2068 International trucking and freight forwarding by road Politrans SRL 47/2Bernardazzi St, Chisinau, MD-2012 International trucking to/from Western Europe, especially Italy and Austria; Renault Trucks official dealer Quehenberger Hellmann 51/2 Dacia Blvd., Chisinau, MD-2062

CaleaFerata din Moldova (Moldova Railway) 48VlaicuParcalab St, Chisinau, MD-2012 State monopoly railway transport; freight forwarding by rail ExpeditEuroTrans 72/1Columna St, Chisinau, MD-2012 Railway forwarding Megatrans 75Alba Iulia St, Chisinau MD-2071 Railway forwarding to/from CIS and Europe; container shipments to/from the Mediterranean, Asia, Near East and the Americas Translogistic 15TraianBlvd., Office 5, Chisinau, MD-2060 Freight forwarding by railway and road to CIS, Western and Eastern Europe Trinex





Freight forwarding by road, air and sea MD Trans 29MuncestiSt, Chisinau, MD-2001 Transport and freight forwarding by air, sea and road Pro Logistic 49/4Tighina St, off. 222, Chisinau, MD-2001 Freight forwarding by air, sea and road Transservice M 29/1Muncesti St, Chisinau, MD-2001 Freight forwarding, railway, trucking, warehousing

64 Stefan cel Mare Blvd., office 180, Chisinau Freight forwarding by railway to CIS, Baltic States and Europe Transservice M 29/1Muncesti St, Chisinau, MD-2001 Freight forwarding, railway, trucking, warehousing

Air River/Sea

Air Moldova 80/2Dacia Blvd., Airport, MD-2026, Chisinau Freight forwarding by air Pilot Cargo 27SfatulTariiSt, Chisinau MD-2012 Freight forwarding by air Quehenberger Hellmann 51/2 Dacia Blvd., Chisinau MD-2062 Freight forwarding by road, air and sea DHL 42VlaicuParcalabSt, Chisinau MD-2012 Air freight and sea transport CargoInterPrim 49/6 Dacia Blvd., Chisinau MD-2062 Exclusive Partner UPS Supply Chain Solutions; air freight forwarding MD Trans 29MuncestiSt, Chisinau MD 2001 Transport and freight forwarding by air, sea and road Pro Logistic 49/4TighinaSt, off. 222, Chisinau MD-2001 Freight forwarding by air, sea and road

Giurgiulesti International Free Port Privately owned and operated by ICS “Danube Logistics” ltd 2/2MihaiViteazul St, Chisinau, MD-2004 Transport and freight forwarding by sea, warehousing State enterprise “River Port Ungheni” 1 Lacului St., Ungheni, MD-3606 Transport and freight forwarding by sea State enterprise “Molovata Ferry” MolovataNoua, Dubasari region Transport and freight forwarding by sea State enterprise “River Port Bender” 67 Comsomolului St., Tighina Transport and freight forwarding by sea Quehenberger Hellmann 51/2 Dacia Blvd., Chisinau MD2062 Freight forwarding by road, air and sea DHL 42VlaicuParcalabSt, Chisinau MD-2012 Air freight and sea transport MD Trans 29MuncestiSt, Chisinau MD-2001 Transport and freight forwarding by air, sea and road Pro Logistic 49/4Tighina St, office 222, Chisinau, MD-2001 Freight forwarding by air, sea and road

Warehousing

Giurgiulesti International Free Port Privately owned and operated by ICS “Danube Logistics” ltd 2/2MihaiViteazul St, Chisinau, MD-2004 Transport and freight forwarding by sea, warehousing Transservice M 29/1MuncestiSt, Chisinau MD-2001 Freight forwarding, railway, trucking, warehousing INTERTRACTION M Ltd. 128 Grenoble St, Chisinau Warehouse services. VAMCOMPLEX Ltd., S.C. 801Muncesti St, Chisinau Warehouse services. Customs storage. LOGISTIC MOTOR Ltd. 47/2A. Bernardazzi St, Chisinau Warehouse services.






Table 2.14. Major Trucking Companies in Moldova

No Name No of

vehicles Address Director

1. IUGINTERTRANS SA 95 Taracla, MD-7401, 28 Voczalnayastr

Ion Ciareac

2. FORUM – TIR SRL 94 Chisnau 40 M.Eminescustr, ap. 40

Valeriu Sterea

3. CARGO TRAFIC SRL 74 Chisinau, MD-2032 14/3 Gr. Botanica str., ap.300

Ion Melnic

4. VRABII V.V.II 62 Edinet 3 Lazo str.

Victor Vrabie

5. SIMOR – TRANS SRL 61 Chisinau, MD-2023 98 Izmail str., ap.32

Alexandru Postolachi

6 MIGALAUTO SRL 58 Balti, MD-3100 27/4 Puskin str.

Mihail Gutu

7. DELTRANS – GRPUP SRL 57 Chisinau 400/1A Muncesti str.

Nicolae Gribincea

8. TRANSIMEX SRL 57 Chisinau, 13 Padurii str.

Valeriu Tulbu

Source: AITA

In 2011 there were around 146 000 vehicles for all types of freight services (trucks, vans, pick- ups). As of April 2012, from the 4471 trucks registered in transport companies, 1350 or 30% of them were compliant with Euro 5 standards; 3% with Euro 4; 24% with Euro 3; 35% with Euro 2; 5% with Euro 1 and 3 % with Euro 0. In international freight transportation 5582 road-trains (vehicle – traction unit with semi-trailer, vehicle with trailer) are in use, with the classification shown in Table 2.15 below. Table 2.15. Goods Vehicle Fleet in Moldova by Type

Freight transportation: Description No. of Vehicles

General purpose (canvas cover) 3111

Vegetables/fruits (refrigerator) 1003

(isothermal) 209

Fluid cargo (wine/juice) tank-cars 92

Car carrier 30

Container trucks 89

Light goods vehicles 317

Others 731

Source: AITA

The number of registered trucks has grown rapidly during the last decade, with an average yearly growth of 6.2% between 2000 and 2012 Q1, the dynamics of yearly registration can be observed In Figure 2.21 below.





Figure 2.21. Number of Registered Vehicles used in International Transportation

Source: AITA

Companies operating under TIR convention are members of AITA, the Moldovan Association of Road Transport; (Asociaţia Internaţionala a Transportatorilor Auto) which is the entity responsible for issuing and guaranteeing TIR Carnets in Moldova. It numbered 456 members at the beginning of 2012, and employed 5440 drivers. For first quarter of 2012 it was managing operations based on 20,781 TIR. Figure 2.22 below presents the increase in operations during the last ten years:

Figure 2.22. Operations Managed under TIR Carnets

0

20000

40000

60000

80000

100000

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Nu

mb

er o

f Car

ne

ts

Years

TIR Carnets

TIR Carnets

Source: AITA

An overview of the global destinations for deliveries, and loading of all Moldovan trucks working in the TIR system is presented in the following figures.





Figure 2.23. The Country of Loading of Freight in Moldovan Carriers’ Trucks (by TIR System)

0

5000

10000

15000

20000

25000

30000

35000

Nr.

of T

IR L

oad

ings

Loadings by Country

2011

2010

2009

Source: AITA Figure 2.24. The Country of Unloading of Freight from Moldovan Carriers’ Trucks (by TIR System)

0

5000

10000

15000

20000

25000

30000

35000

Nr.

of

TIR

Lo

adin

gs

Unloadings by Country

2011

2010

2009

Source: AITA In 2011, Moldovan trucks loaded 11.487 times in CIS countries, 9.781 times in EU countries, 3.450 times in Romania, and 44.300 times in other countries, among which Turkey dominates with 12.228 times. The main loading place remains Moldova with 30.514 times. Moldovan trucks unloaded cargo mostly in Moldova (20.323 times), Russia 32.247, Ukraine and Belarus (2.158 and 2.744). Romania was the destination of cargo 1.756 times, EU countries as a whole 8.226 times, Turkey 2.559 times.





These figures are characteristic of TIR activity. There are two main groups of delivery (unloading) destinations for cargo outside Moldova, the neighbouring CIS countries (Ukraine-Russia-Belarus) and the EU. In terms of external loading locations Turkey leads, followed closely by CIS countries and the EU. National Moldovan export/import operations stand as the main usage of the Moldovan fleet. 2.4. Domestic Passenger Transport Domestic long distance transportation comprises cars, (mini) buses and trains. Cars and buses greatly exceed the train in terms of speed and network coverage, though the costs are also higher. Increased car ownership, discussed below may negatively affect both train and bus travel, though the extent to in which this takes place is hard to predict, as many other factors, including the cost of fuel may have a role in any shift of mode. 2.4.1. Urban Public Transport In Chisinau municipality the passenger transportation services are provided by M.E. “Electric transport division” and M.E. “Urban bus fleet”, as well as by 19 transport companies – administrators of minibus and bus routes. There are also 45 licensed taxi companies. There is no subway system in Chisinau. Buses and trolleybuses normally begin service at 06:00 with buses operating until 22:00, trolley buses and minibuses until midnight. Currently the following public transport routes exist in Chisinau:

23 trolleybus routes

27 bus routes (including 4 private)

72 minibus routes On average the routes are served by:

258 trolleybuses

118 buses of increased capacity (including 25 private)

1874 minibuses

1670 taxis In 2011, 93.9 m. passengers were transported on regular trolleybus routes. From the total passengers 79% paid the regular fare of MDL 2 for a total of 73.8 m. passengers. Socially subsidized travel accounted for 20.1 m. trips or 21% of all trips. 15.6 m. Passengers were transported by bus (12,4 m. (80%) paying fare and socially subsidized 3.2 m. (20%)). In addition during the same period minibuses transported circa 190 m. passengers. Therefore, in the corresponding period in total 299.5 m. passengers were transported by trolleybuses, buses and minibuses, or daily on average – circa 820.000 passengers. The number of passengers in trolleybuses has decreased by 2.1% from 2010, the decline caused by a diversion of passengers to minibuses and buses. The number of bus transported passengers has increased by 2.2% compared to 2010 as result of an increase in passengers with socially subsidized fares.





As of 01.01.2012 the Electric transport division was managing 320 trolleybuses, of which:

164 units have been in service up to 15 years

22 units have been in service between 15 and 20 years

134 units in service over 20 years. Therefore, at the beginning of 2012 156 trolleybuses or 49% were officially life-expired. However, the issue of an ageing trolley bus fleet in Chisinau is being tackled with the financial backing of the EBRD. A loan agreement has led to the purchase of 102 new trolleybuses from a company in Belarus together with appropriate maintenance equipment. These trolleybuses started to come into service during Q1 2011. In October 2011, an agreement was signed between the Moldova and Belarus governments for the assembling of further new trolleybuses in Chisinau. On 01.01.2012 the urban bus fleet was managing 142 buses, of which 16 buses or 11% are life-expired and need to be withdrawn from service. The number of useable buses constitutes 126 units, of which approximately 80% of units have been in service less than 15 years, while approximately 20% units have passed this official life span and need to be withdrawn from service. As of April 2012 there were 19 minibus companies operating 1,874 minibuses in Chisinau over 72 routes13. An estimate of minibus usage based on LTIS and NBS data gives approximately 225 million passengers per year. Figure 2.25. Million Passenger Km by Mode

Source: NBS

Single trip fares for buses are: 3 MDL (0.25USD) Single trip fares for trolleybuses are: 2 MDL (0.17 USD) Single trip fares for minibuses are: 3 MDL (0.25 USD)

13

source: //www.zdg.md





Transportation fare is paid directly to the conductors or the driver. Minibuses services rarely use tickets. Route numbers are posted on the front and side windows. Taxi companies are widely spread in Chisinau. An average cost of a trip from one district to another is about 2,4-3 USD.

Reforms in the urban transport sector have been long over-due, including:

(i) Restructuring/downsizing and financial adjustment of the public transport company; (ii) Phasing out of all fare privileges, and (iii) Establishing ways to involve the private sector in the provision of urban public transport

services. 2.5. Border Traffic

The Customs Service has provided details of goods vehicle trips at the major international border crossings for the years 2010 and 2011. Total incoming and outgoing trips per year are shown for the following numbers of international border crossings and Moldovan customs clearance points, by type of customs procedure (TIR) and (T1).

Table 2.16. Cross Border Freight Traffic Movements, Moldova 2010-11

Crossing Type 2010 2011

T1 71 695 91 226

TIR 91 106 89 281 Source: Customs Service

Figure 2.26. Cross Border Goods Traffic by Weight, Moldova 2010-11

0

10

20

30

40

50

60

70

80

90

100

2010 2011

Tho

us.

to

nn

es

T1

TIR

Source: Customs Service

Those crossings excluded in 2011 are generally those with very little traffic. A brief assessment has been carried out for those border crossings with data for both 2010 and 2011. This shows a slight drop, 2%, in TIR activity but a significant increase, at 20%, in T1 activity at these locations between 2010 and 2011.

The total movements at these ten crossings have been converted to daily flows to attempt to achieve compatibility with known AADT classified traffic counts at these locations. However, the border crossing data gives daily goods vehicle flows which are consistently lower than the traffic counts and it has not, to date, proved possible to achieve a correlation between the two data sets. From the viewpoint of total traffic there would appear to be omissions in the border crossing data.





2.6. Balance between Roads and Other Modes In terms of volume and configuration, there would appear only limited capability for major changes in other modes to significantly affect strategic highway travel patterns. In terms of passenger kilometres and tonne kilometres the road sector is predominant in Moldova. National Bureau of Statistics’ data shows that road carried 77% of freight tonne kilometres and, excluding private cars, 71% of passenger kilometres in 2010. The modal balance for freight has changed radically in recent years with effectively a collapse in rail usage (59% in 2006 to 23% in 2010) in parallel with a steady growth in demand for road. Road and rail are the only significant sectors for domestic transport with the aviation sector, 19% of passenger kilometres in 2010 and growing rapidly, consisting of international traffic only. In consequence, competition and direct interaction with road transport is limited. 2.7. Road and Traffic Safety The Government of Moldova recognizes the pressing issue of road accidents and made “Safe road transportation” a key priority for the Government of Moldova, as per the provisions of the Government Programme (2011-14), In addition, in March 2010 the Republic of Moldova co-sponsored Resolution 64/255 of the UN General Assembly declaring the 2011-2020 years “Decade of Action for Road Safety”, and has assumed the responsibility to reduce the number of accidents by year 2020 by 50%. Subsequently, a National Road Safety Strategy (2011-2020) was approved in December 2011. A National Road Safety Council (NRSC) has been established and is the body responsible for coordinating the activities of the relevant state institutions and development partners in order to ensure the implementation of the envisaged activities, stipulated in the National Action Plan for Road Safety (2011-2020). The efforts are supported by the national campaign “Make Roads Safe” in Moldova, which states in its activity report 2010-june 2011: “Road safety and road deaths in Moldova are very actual problems and have become especially pressing matter in recent years, due to the lack of an effective road safety management system

and extremely low level of discipline of road users”

The report continues:

“Each year, approximately 500 people, of whom almost 10% children, lose their lives on the roads of Moldova and as much as 3,000 are injured.”

The efforts underway do seem to take effect and according to the statistics by Moldovan Road Police, in 2011 the number of road accidents in Moldova decreased by 3.6% comparing to the previous year. While this recent trend is encouraging the accident rate remains very high in Moldova; the mortality rate due to road traffic injuries, per 100,000 people is estimated at 15, which compares to around 4 to 5 in central European countries. The Government is well aware that, in addition to the unacceptable social cost to the nation, it is estimated that Moldova loses over 2% of its gross domestic product in road accidents.





The following presents an overview of the accident pattern reported by the Moldovan Road Police for 2011:

According to the Road Police, in 2011 2,825 road crashes were registered, 3.6% down on 2010, in result of which 433 people died (-4.2%, previous year 452) and 3,543 were seriously injured (-5.4%, p.y.3,747).

These figures give estimated fatality rates of 1.6 per 10m vehicle kilometres and 12.2 per 100,000 persons and injury accident rates of 10.6 per 10m vehicle kilometres and 79.4 per 100,000 persons. The fatality rates are high by international standards in general and European standards in particular. The injury accident rates are less alarming but may be distorted downwards by under reporting of slight injury accidents.

In Chisinau, 1,180 (-9.8%, p.y.1,308) accidents were registered, which killed 61 (-15.3%, p.y.72) people and 1,479 (-11.9%, p.y.1,678 ) were injured.

In 2011 the main types of accidents were:

Hitting pedestrians – 1,006;

Collision with vehicles - 848;

Collision with obstacles - 417;

Inversion of vehicles - 333;

Hitting cyclists - 80;

Hitting non-motorized vehicle - 24;

Collision of vehicles with locomotives - 3.

Main causes of the accidents were:

Inappropriate speed for visibility, weather conditions or traffic situations (27.7%);

Speeding (15.4%);

Breaching the traffic rules on pedestrian crossings (13.4%);

Non-compliance with priority rules at intersections (9.4%);

Loss of control of vehicle (9.2%);

Driving under the influence of alcohol (6.5%).

Within the National Road Safety Strategy the following objectives have been identified:

Setting the framework for an efficient and sustainable road safety sector;

Stronger traffic law enforcement;

Development and improvement of road user behaviour through safety campaigns and driver education;

Ensuring the safety of most vulnerable road users – pedestrians, children and cyclists

Safer infrastructure;

Reducing crash severity and its consequences.

The Strategy further continues that according to international practice the implementation of automatic road traffic monitoring systems is the most effective option for increasing road safety in areas with a high risk of road accidents. Receiving data from automatic road traffic monitoring systems will be performed to immediately stop and document the traffic violator, after establishing the ownership of the road vehicle. In this context, according to provisions of the Action Plan for improving the situation in the road traffic safety sector by 2014 (approved by Governmental Decision no. 545 of 25.06.2010), objectives were identified for installing automatic road traffic monitoring systems on national roads that serve as state international connections, with sections of high accident frequency and on accident prone streets of Chisinau municipality.





The corresponding project envisages installing 2 to 4 road traffic monitoring systems on major roads with a total of 27 posts. In addition, the strategy proposes the creation of a Traffic Control Centre as well as a National Road Safety Agency which will incorporate all road safety activities, as well as a Road Safety Fund, and a National Road Safety Audit. 2.7.1. Road Safety in Design and Maintenance The above described efforts have led to a higher awareness of road safety also in the design process of roads. In conjunction with one of the recent internationally coordinated road projects EuroRAP carried out road specific as well as network wide safety ratings in Moldova. Using specially-equipped vehicles, software and trained analysts, EuroRAP inspected and rated roads, focusing on more than 30 road attributes relating to the likelihood of a crash and its severity. These attributes include intersection design, road cross-section and markings, roadside hazards, footways and bicycle lanes. The findings have then been incorporated in the design process of the rehabilitation project. It is estimated that up to 55% of future accidents can be eliminated through appropriate design measures. 2.7.2. Overall Considerations In general, road design should aim at providing a road environment where drivers can predict the alignment. If a significant change in geometry (gradient, curve radius, junctions, pedestrian crossings) or the environment of the road (like village or town) occurs, the driver should be clearly informed by road signs, road markings and/or using a “gate”, which will force him to a safer way of driving. Some very generic and partially “low-cost” design and maintenance counter-measures are presented below: Improvement of geometry:

Elimination of small curves;

Correction of gradient;

Widening of the road at a curve. Improvement of visibility:

Removal of bushes, etc.

Lighting if night accidents;

Reflective studs or poles. Improvement of road markings / speed management/ control:

Delineate edge and/or centre lines;

Bumps or raised zebra crossings;

Junction markings;

Hatched marking with reflective studs;

Rumble strips at edge line and/or centre line;

Speed limit/advisory signs;

Intensified law enforcement.





Improving road signs:

Speed limits and/or warning signs like “bend”, junction ahead, etc.

Information signs or hazard markings, e.g. background plates at sharp bend;

Equip commonly risky areas with a permanent automatic speed check;

Softening of the environment;

Removal of obstacles, or moving them more away from the road;

Reform slopes, drainage (end of pipe), culverts, etc.

Reform rigid structures or separate them by guardrails from the traffic;

Widening of rock cuttings, toe walls etc., or equip them with guardrails;

Replace trees with bushes. Improvement of friction by new sealing:

Use special friction increasing material;

Roughening too smooth pavement;

Filling potholes and repairing damaged edges. Further information can be found in Appendix 3 Road Safety Strategies. The Consultant proposes that many accident black spots as well as general safety provisions can be addressed by implementing the above mentioned counter-measures either during the course of road rehabilitation projects or to be implemented through continuous maintenance activities. It is to emphasise that on many sections of Moldovan roads the most basic road features are missing: road-markings, illumination, or reflective studs indicating the edge of pavement. The lack of those basic features needs to be addressed immediately. Further on road safety audits need to be carried out and be implemented during the life-cycle of a road project: design, rehabilitation, operation and maintenance. 2.8. Road Traffic Forecast

A detailed report has been issued describing traffic forecast for all respective modes and was issued under the title “A2-Traffic Forecast”. The following presents a summary of the findings and conclusions relevant to the road sector. Main assumptions regarding the GDP growth rates were determined based on IMF forecasts to 2016 and estimates made by the Consultant for the time period beyond 2016. Three scenarios were proposed and the central scenario, used for the global forecast, is shown in the table below. The growth rates of the high and low scenarios differ from the central scenario by about 1 percentage point at the beginning and 0.5 percentage points in 2032 (see next figure).

Table 2.17. GDP Central Growth Forecast (% Average Growth per Year)

From to % p.a.

2011 2016 4.600 2016 2020 4.700 2020 2025 3.800 2025 2033 3.000

Sources: IMF/Moldova 2020/ScottWilson/MCC/Consensus Economics Inc/The Consultant





Figure 2.27. Forecast of the GDP Growth Rates

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

Source: IMF / Consultant’s analysis Elasticity factors have been taken into consideration for the definition of the growth factors. These elasticity factors describe the ratio between the GDP change per annum and the respective growth factors. For example, elasticity factor of 1.2 (car passengers to GDP) means that the number of car passengers grows 20% more than GDP. These ratios were based on an analysis of the 2001 - 2011 data and experience elsewhere in the region. For the country as a whole, the total amount of land passenger traffic is dependent on GDP and the population. However, as population is forecast to remain stable, it was effectively excluded from the forecast calculations. 2.8.1. Forecast of Freight Transport in Moldova The overall forecast for freight transport considered primarily road and rail. A summary of tonnes transported by mode in future years are shown in the table below. The total number of tonnes across all modes is forecast to increase by 61% to 2022 and by 121% by 2032. Table 2.18. Forecast of Tonnes Transported per Year, 2012 - 2032

2012 2017 2022 2027 2032

Road 32,415 41,371 52,801 62,107 73,054

% of total 86.9 87.4 87.8 88.3 88.8

Rail 4,746 5,833 7,169 8,072 9,088

% of total 12.7 12.3 11.9 11.5 11.0

Ship 149 149 149 149 149

% of total 0.4 0.3 0.2 0.2 0.2

Total tonnes 37,310 47,353 60,119 70,328 82,291

% of total 100 100 100 100 100 Source: The Consultant

The resulting forecast tonnages and proportions by mode are shown in the figures below.





Figure 2.28. Forecast of Freight Transport by Mode, 2012 – 2032

0

50

100

2012 2017 2022 2027 2032

'000

tonn

es /

yea

r

Truck Train Ship


Figure 2.29. Forecast of Freight Transport Modal Split, 2012 – 2032

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2012 2017 2022 2027 2032

%

Truck Train Ship






2.8.2. Forecast of Passenger Transport in Moldova

The forecast total numbers of (long distance) land passengers in future years are shown in the table below. The total number of passengers across all land modes of transport is forecast to increase by 69% up to 2022 and by 139% in 2032. This represents an elasticity of 1.13 to GDP, compared to 1.0 proposed in the CCN trends to 2030 forecast.

Table 2.19 Forecast of Long Distance Land Passengers by Mode, 2012 - 2032 (‘000 Passengers)

2012 2017 2022 2027 2032

Car passengers 87,010 122,675 171,986 221,743 277,204

% of total 60.1 65.4 70.5 76.4 80.2

Bus passengers 52,985 59,946 66,692 63,104 62,743

% of total 36.6 32.0 27.3 21.7 18.2

Train passengers 4,753 4,978 5,209 5,388 5,549

% of total 3.3 2.7 2.1 1.9 1.6

Total passengers 144,748 187,599 243,887 290,235 345,496

% of total 100 100 100 100 100 Source: Consultant’s analysis

It is forecast that each mode of transport will grow at a different rate. Car passengers are forecast to increase from 60% in 2012 to 80% in 2032. Conversely, bus passengers are forecast to decline from 37% to 18% while rail passengers decline from 3.3% to 1.6%. Both bus and rail passengers increase in absolute terms, however. The results of the land passenger transport forecast are illustrated in the following figures. Figure 2.30. Forecast of Long Distance Passengers by Mode, 2012 – 2032

0

100

200

300

400

2012 2017 2022 2027 2032

mill

ion

pas

sen

gers

/ y

ear

Car Bus Train






Figure 2.31. Forecast of Long Distance Passenger Modal Split, 2012 – 2032

0.0

10.0

20.0

30.0

40.0

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70.0

80.0

90.0

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2012 2017 2022 2027 2032

%

Car Bus Train


2.8.3. Development of Traffic Model In order to present a comprehensive overview of the development of road traffic throughout the Moldovan roadway network, the project team decided to use a computerized “traffic model approach”. With limited resources for road rehabilitation measures available it was found most suitable to develop a tool that would allow visualizing increased road traffic as well as allowing the testing of investment options on a “network” level. These traffic forecasts for 2022 and 2032 are each made on the existing 2012 road network using The Consultants’ link capacity values. The initial aim of the forecasts is to show the impact of anticipated traffic growth and, as illustrated in the figures, reveal where road capacity problems can be expected in the future. The following table provides a brief indication of the results in terms of a selected set of major road links which reveal a comparison of observed and modelled flows for the purpose of model validation. Table 2.20. Brief Selection of Traffic Model Results by Forecast Year (AADT)

Road No. Section AADT by Forecast Year

From To 2012 2022 2032

M1 Durlesti (R6) Lozova 2750 4750 7450

M2 M21 jct Peresecina 10550 18450 24450

M2 Orhei R14 jct 4950 8950 11400

M3 Chisinau Razeni 4500 9850 14300

M3 Comrat R38 jct 2550 5200 6850

M14 Riscani Edinet 3450 6000 8300





Road No. Section AADT by Forecast Year

From To 2012 2022 2032

M14 M2/M21 jct R59 jct 2050 5750 9500

R1 Chisinau Straseni 8050 13150 17100

R1 Cornesti Ungheni 2550 4300 5750

R3 Chisinau Hincesti 7750 11150 14850

R14 M2 jct Singerei 3750 6700 8300

R16 Balti M14 jct 2950 4850 6700

R20 Orhei Rezina 2400 4000 5600

R30 Anenii Noi Causeni 4600 7450 9600

R30 Causeni Stefan Voda 4300 7250 10150

R34 Cantemir Cahul 1400 1550 2550

Source: The Consultant Assessment Currently in 2012 the Moldovan road network provides sufficient capacity for the existing traffic. Only at a few bottlenecks is road usage reaching capacity of the existing roads. The current challenge is not capacity constraint but rather the overall condition of the existing network. As in almost all situations intersections are the points where capacity becomes a limiting factor. On a national level this is visualized by almost all major interregional / international roads converging in Chisinau. Figures 2.32 and 2.33 present the road traffic forecast for the years 2022 and 2032. In 2022 the colours indicating the volume /capacity (V/C) ratio intensify and it is noticeable how the national “hub” Chisinau becomes the centre of traffic intensity in Moldova. Given the main assumption that continuous GDP growth will lead to traffic growth some sections of the main roads leading in and out of Chisinau are at or over capacity. In real world terms this means that traffic congestion will occur on bottle-necks. While today there is a need to rehabilitate existing road sections in the near to mid-term future, capacity may become a major challenge in the longer terms if the growth projections hold true. The traffic modelling work to date has produced preliminary draft AADT assignments for 2012 (base year), 2022 and 2032. These results are intended to indicate the scale of future traffic flows and to identify where network capacity problems can be expected. In relation to modal shifts in traffic it should be noted that while the removal of broad constraints to trade and transport may have a significant impact on highway traffic in Moldova, both in terms of its volume and configuration, there would appear only limited capability for major changes in other modes to significantly affect strategic highway travel patterns.





Figure 2.32. Estimated Traffic Distribution 2022 – Moldova






Figure 2.33. Estimated Traffic Distribution 2032 - Moldova






Conclusion It becomes apparent that the major Origin-Destination pair in Moldova is the exchange between the capital Chisinau and the northern Centre Balti. This core area of economic activity is then being connected with the relevant border crossings and regional sub-centres. Therefore the major back-bone or core–network of the Moldovan road network is formed by the corridors of M14 / M2 entering the country in the north leading to Balti, from there two parallel corridors M14 and R14 connect to Chisinau. From Chisinau, two main directions of traffic flow are visible - one leading to the south east using R2/R30 road to Palanca providing a connection to Ukraine and Odessa; the other using the M3 corridor connecting Cimislia, Comrat with the port of Giurgiulesti and the borders to Romania and Ukraine. Other connections, especially to the western borders, i.e. M1 also show considerable increases in traffic. A sketch of the Moldovan core-network is presented in Figure 2.34. Total length of the proposed core road network is 1,197.9 km.





Figure 2.34. Identified Core-Network

Source: The Consultant Note: Core Network includes the non-existent Chisinau “Ring-Road” as well as core-network components within Transnistria region (light-blue)





3. ROAD NETWORK MANAGEMENT AND FINANCING 3.1. Introduction Transport infrastructure is a critical precondition for inclusive economic and human development. Roads, in particular, are of importance for the economic and social development of Moldova. Being a geographically small and landlocked country, a decent and well maintained network of national and local roads is the optimal solution for transporting both freight and passengers inside the country and for middle distance international transportation. Presently, 95% of inter-urban passengers and 85% of freight is transported by road. 3.2. Road Sector Reform Based on the understanding that transport infrastructure is a critical precondition for inclusive economic and human development, the World Bank and the Government of Moldova reached an agreement in 2006 that in principle the World Bank would support the Government’s Transport Sector Program for the years 2008-2017. Subsequently, both EBRD and EIB indicated their willingness to participate in the funding of the project. The Transport Sector Strategy’s main focus is on roads. Significant additional external financing for the Road Sector Program has become available from 2008 (i) from the EU under its New Neighbourhood Program, and (ii) from the U.S. Government through the Millennium Challenge Account. The long and difficult process of reforming road maintenance funding in Moldova and thereby establishing a solid funding for preservation of road assets has finally led to tangible results. The actual and projected funds for road maintenance have increased considerably. 3.2.1. National Strategic Directions and Policy Objectives The National Development Strategy (NDS) for Moldova of January 2012 named ¨Moldova 2020¨ provides the overall framework against which the development of Moldova is envisaged to take place. The strategy covers 7 key subjects that have been identified as crucial in the facilitation of development of the Moldovan nation in the period up to 2020. These sectors are: Education, Roads, Access to Finance, the Business Environment, Energy and finally the Pension and Judicial systems. It is believed that by the authors of this strategy that by addressing the shortcomings in these key

areas the country can ¨ensure qualitative economic development and, implicitly, poverty reduction¨.

The NDS asks for “Roads: In good Condition, Anywhere” since the poor condition of roads is seen as a major constraint hindering economic development and requiring substantial public investment. Further on the NDS states:

“Moreover, an adequate road infrastructure is a precondition for a harmonious regional development and access of population to public services. The prospect of establishing a Deep

and Comprehensive Free Trade Zone (DCFTZ) between the Republic of Moldova and the European Union makes road infrastructure indispensable for the utilization of local producers’

export potential”





The National development Strategy outlines the following goals in regard to road rehabilitation:

Monitoring Indicator 2015 2020

Rehabilitation of national public road 900 (2014) 1900

Repairs of local public roads 700 (2014) 4900 Source: National Development Strategy (NDS) for Moldova of January 2012

We interpret the goals as follows: rehabilitation of 900 km of national public roads by 2015 with an additional 1900 km by 2020. Similarly the goal is to repair 700 km of local roads by 2015 with an additional 4900 km by 2020. Rehabilitation is understood as major work items that reinstate structural integrity of road bed as well as reconstruction of pavement.

3.2.2. Current Priorities

In Moldova as well as, in other countries, road network planning is performed within the larger context of transportation planning to support national and regional policy objectives. The central government establishes general goals and objectives that influence transportation needs. In this context the Ministry of Transport developed in 2007, a Land Transport Infrastructure Strategy (LTIS) for the period 2008-2017 which was formally adopted by the Government through Cabinet Decision No. 85 of February 1, 2008.

In regards to road the LTIS identified the following priorities.

Priority 1: Implement a recovery plan for the road network

Action 1: Determine the priority network for road recovery Measure 1.1: adopt an accepted set of criteria for prioritization; Measure 1.2: set up desirable standards of quality for road exploitation;

Action 2: Adopt a 10 years recovery plan for Moldovan roads Measure 2.1: adopt a model of planning for policy management; Measure 2.2: determine the desirable level of spending for road maintenance and recovery and associated resources;

Action 3: Insure a regular income for road maintenance and road restructuring Measure 3.1: Determine the adequate level of tax collection and effect on budget; Measure 3.2: Insure the stability of the income through a reform of the Road Fund resources mechanism and Road fund management; Measure 3.3: adapt the secondary legal framework on road sector to the desirable policy;

Action 4: Integrate Moldova in European transport system Measure 4.1: use the opportunity of the new neighbourhood European policy instruments;

LTIS addresses the following key reforms and policy actions:

Reform of road maintenance financing;

Reform of road maintenance organization and contracting;

Introduction of axle load control system;

Measures to improve road safety.





The current Transport and Logistics Strategy (TLS):

Reflects changes in the timing of investments;

Includes the latest status of funding sources and amounts;

Assesses updated road maintenance costs;

Reviews the implementation of the Road Sector Program Support Project.

In addition, in 2011, within the Road Sector Program Support Project the study “Design and Implementation of Road Maintenance Reform, Republic of Moldova” was carried out by SweRoad. Report A.3 summarized the main findings of the study and provides a detailed list of recommended steps on how to support the Road Maintenance reform.

3.3. State Road Administration

The State Road Administration is the corporative road agency responsible for the day to day management and maintenance of the country’s entire road network. It holds the title of ownership of the roads and their right of way. It is in charge of all road construction, maintenance and rehabilitation and of road safety. The State Road administration is also responsible for all decisions concerning the use of funds for roads, both from the State Budget and from the Road Fund. Directly subordinate to the Ministry of Transport and Road Infrastructure (MOTRI) the State Road Administration (SRA) is the agency responsible for the implementation of the above mentioned key reforms. Figure 3.1 presents an organization chart of the agency.

Figure 3.1. State Road Administration Organizational Chart

Source: State Road Administration





The State Road Administration is generally organized in four separate divisions with a total staff of about 130 personnel. These are:

Investment Division;

Accounts Division;

Road and Bridge Maintenance Division;

Construction and Capital Works Division. Investment Division is divided for managing investments and procurement department. Their main responsibility is to procure and implement investment projects, including projects funded by IFIs. Accounts Division is further divided for economic and financial and accounts department. They are responsible for accounts in SRA. Road and Bridge Maintenance Division is further divided for emergency services department, road safety department, roads department, traffic monitoring department, bridge department, axle monitoring department, environmental department and pavement management department. They are in charge of procurement and implementation of all of the maintenance works for roads and bridges. Construction and Capital Works Division is divided for design and cost estimates, technical analysis, tendering and planning and technical regulation departments. In addition to this there are 7 other departments. Internal Audit Department, which is under the management of Chief Executive, Testing Laboratory, Supervision Department, Emergency Technical Department, Human Resources and Secretariat, Legal Department and Administrative Department. Contractors for road construction and road rehabilitation are totally or partially privatized. Those which were partially privatized have been transformed into joint stock companies. State owns 22% of Magistrala, the country’s biggest national road construction company. In three other construction companies, the State owns more than 60%.of the shares. There are two road construction contractors owned 100% by private capital. 3.3.1. Status of Key-Reform Areas The following section reports on the status of the key reform areas. The currently valid Action Plan for Road Sector Reform includes the following action items:

1. Reorganization by fusion of the road maintenance joint stock companies and state enterprises and assignment of maintenance areas. Reducing by fusion from 38 to 12 joint stock companies.

2. Adjustment of the legal and regulatory framework and technical standards to the

requirements of the new maintenance system: Classification of roads according to the level of service, identification and of the volumes and time frame for execution of the maintenance works depending on the level of service, drafting of the multi-annual maintenance contracts.





3. Implementation of the modern technologies for road maintenance and acquisition of necessary equipment (a) Increase the width of the snow cleaning path in each pass by equipping the truck with side plough. (b) Use salt only on roads with high traffic volumes. Fitting the trucks with additional special equipment for brine spreading. (c) Use the spray pothole patching instead the traditional premix pothole patching. This will reduce the costs by 30-50% and will increase the productivity. (d) Other small modifications and additions to the main equipment that will have significant impact on costs.

4. Implementation of the new road maintenance contracts adjusted to best international

practice. Contracting the winter maintenance works based on number of weather occasions (a) Implementation of contracts based on unit cost. Use of these contracts first 3 years with the possibility to extend them for other 2 years after maintenance companies' capacity building. (b) gradual implementation of the performance based contracts. This type of contract will specify the level of service depending on road category.

5. Tendering the road routine maintenance works. Prepare the road maintenance

companies to compete with the private companies. Privatization of the road maintenance companies.

6. Gradual implementation of the road and bridge management system and computerized

accounting of the maintenance works. (a) Design of the road management system (RMS) and prepare of the terms of reference for necessary software acquisition. (b) Acquisition of the RMS software and necessary equipment for input data collecting necessary for road and bridge database. (c) Acquisition of the road weather information system. (d) Integration of the computerized accounting system and the road weather information system into the road management system.

7. Capacity and managerial building of the personnel involved in the road maintenance.

Development and implementation of the sustainable training program for the management and technical personnel.

Appendix 4 presents the most recent: “Action Plan on implementation of the public road maintenance system reform”, issued by the Ministry of Transport and Road Infrastructure (MoTRI). 3.3.2. Reform of Road Maintenance Organization and Contracting The following section reports on the achievements made under the items 1 and 2 of Action Plan for Road Sector Reform: Within the SRA one of the key reform areas: “Reform of road maintenance organization and contracting” is currently being carried out. The Government Action Plan for the agreed upon reforms (adopted in 2011) foresees the consolidation of the previous 38 maintenance entities into 12 road maintenance companies. Table 3.1 below presents the newly to be established companies, as well as the amount of roads in their responsibility.





Table 3.1. Consolidation of Road Maintenance Companies

No. Absorbing enterprises Km of roads

in District Absorbed enterprises

1 JSC Drumuri Edine 1069 JSC. „Drumuri Dondușeni”, JSC. „Drumuri Ocnița”

2 JSC. „Drumuri Rîșcani” 784 JSC. „Drumuri Drochia”, JSC. „Drumuri Glodeni

3. JSC. „Drumuri Soroca” 953 JSC. „Drumuri Florești”, SE „Drumuri Sănătăuca”, JSC. „Drumuri Șoldănești”

4. JSC. „Drumuri Bălți” 783 JSC. „Drumuri Fălești”, JSC. „Drumuri Sîngerei”

5. JSC. „Drumuri Orhei” 791 JSC. „Drumuri Rezina”, JSC. „Drumuri Telenești”

6. JSC. „Drumuri Strășeni” 877 JSC. „Drumuri Călărași”, JSC. „Drumuri Ungheni”

7 JSC. „Drumuri Criuleni” 698 JSC. „Drumuri Anenii Noi”, JSC. „Drumuri Chișinău”, SE „Drumuri Dubăsari”

8. JSC. „Drumuri Ialoveni” 848 JSC. „Drumuri Hîncești”, JSC. „Drumuri Nisporeni

9. JSC. „Drumuri Căușeni” 682 JSC. „Drumuri Căinari”, JSC. „Drumuri Ștefan Vodă”

10. JSC. „DrumuriCimișlia” 573 SE „Drumuri Basarabeasca”, JSC. „Drumuri Leova”

11. JSC. „Drumuri Cahul” 864 JSC. „Drumuri Cantemir”, JSC. „Drumuri Taraclia”

12. *JSC. „Drumuri Comrat” 420 * JSC. „Drumuri Ciadîr Lunga”, * JSC. „Drumuri Vulcănești

Total 9344

Source: SRA

The strategy behind the proposed road maintenance reform is based on the needs to optimize present routine maintenance enterprises and contracts and at the same time to take the necessary steps in creating a market for routine maintenance work. Thus the first steps involve the dimensioning of the maintenance enterprises and contracts, ensuring that competitive methods are used and the overheads kept down to competitive levels. MTRI informed that the process of consolidation of the 38 district road maintenance enterprises into 12 new companies which started in 2011 is well underway although it has fallen behind the schedule indicated earlier. As reported by MTRI, seven (7) out of 12 enterprises will complete their organization by October 2012 and the rest should be completed by the end of the year according to Government Decision Nr. 244 from April 19, 2012. 3.3.3. Contracting In addition to the consolidation of road maintenance enterprises, another reform action that is being carried out is the increase in road maintenance activities procured through competitive bidding, such as the painting of horizontal markings and the application of surface treatments. Starting 2012, pothole patching has also been tendered through competitive bidding. According to the information provided by the SRA, in 2012 more than 75% of maintenance and reconstruction works procured through the Road Fund have been contracted through competitive bidding. Detailed information on the tendering process of nationally awarded contracts can be found under the SRA website (http://www.asd.md/), listing the results of individual tenders. Tenders range from maintenance activities such as, pot-hole filling, surface treatments, to design works and rehabilitation. In 2012 355 km of rehabilitation works have been tendered by SRA at a cost of 461 mil MDL, or roughly 30 mil EUR.

http://www.asd.md/





3.4. Future Functional Classification 3.4.1. Principles of Functional Classification The functional classification of roads reflects the status of roads in terms of their contribution to the national road network and to the national economy. Higher status roads connect higher status locations/areas in terms of levels of activity/traffic. Medium to lower status roads then plug into the high status network to access locations/areas of lesser activity/traffic. A functional road classification is commonly based on one of two approaches:

Ranking roads in a network using multi-criteria analysis, or

Ranking traffic generating areas by means of multi-criteria analysis and then classifying roads according to the class of traffic generating areas they connect

It is important to establish clear divisions between road classes and to minimise degrees of overlap. Having established a functional road classification it is then necessary to review to it on a regular basis to confirm whether it still reflects the hierarchy of economic activity, and consequently highway traffic, in the country. Reclassification of a road implies a change in status of the locations/areas connected as much as the road itself. Reclassification indicates a change in traffic characteristics and in particular traffic volume. For example, two directly connected locations with higher than national average economic growth will very likely lead to the connecting road experiencing higher than national average traffic growth. This may merit consideration for upward reclassification. Reclassification can occur for other reasons, for example to take advantage of greater accessibility to funds for maintenance and repair. However, such switches may weaken the integrity of the original classification.

There are cost implications in that road classification is connected to road design standard (higher classes of road fall within a higher range of design standard) and consequently to road maintenance standards and requirements. In general terms, reclassification upwards entails an increase in maintenance costs. 3.4.2. Current Legal Background MoTRI reports: “Adjustment of the legal and regulatory framework and technical standards to the requirements of the new maintenance system: to carry out a classification of roads according to the level of service, identification and of the volumes and time frame for execution of the maintenance works depending on the level of service, drafting of the multi-annual maintenance contracts Further on, the roads Act no.509-XIII dated 22.06.1995, which provides a new classification of public roads was amended The new classification system will be the base for the ranking of the roads by the maintenance level.” The quoted modifications to the road law pertain to Article 4. Roads naming and indexing

“(1) Public roads have names and indexes. The road name includes names of the initial point and terminal point and, if necessary – of intermediary points. The road index consists of Latin letters and numbers. Letters are attributed to the roads as follows: “





Index Road category

E European road

A Motorway (Autostrada)

M Express road

R Republican road

G Regional road

L Local road

Source: Road Law

Further definition of the road classification as well as its defined use is provided in the Road Law Article 2. Classification of Roads Article 2. Classification of roads (1) According to their destination, roads are divided in :

a) Public roads – public utility roads for vehicle and pedestrian circulation designed to satisfy general requirements for everyday transport of the national economy and of the population and for state defence. These roads are in the public property; b) Private roads – private utility roads designed to satisfy individual requirements for vehicle and pedestrian circulation in economic, forestry, oil, ore extraction, agricultural, energetic, industrial and other similar activities, access roads to premises, as well as within premises, the roads for building site organization. These roads are administered by physical or juridical persons who own or administrate them.

(2) Based on the type of property, roads are divided in:

(a) Roads from the state public property; (b) Roads from public property of administrative-territorial units; (c) Private roads.

(3) Based on their functionality, public roads are divided into: 1) European roads – international roads crossing Republic of Moldova according to the European Agreement on main international traffic arteries (AGR) to which Moldova adhered to and which can coincide with highways, express roads and republican roads. 2) National roads – roads which are public property of the state and which ensure the main international road connections, connection between the state capital and resident towns, municipalities and objectives of republican importance, as well as connection among them, and which can be:

a) Highways – roads of high capacity and speed, reserved especially for vehicle circulation, endowed with two uni-directional roadways separated by a median zone, which include at least two lanes for each direction and a breakdown lane, grade-separated intersections and limited accesses, on which vehicle entrance and exit is allowed only through special arranged places named road junctions, endowed with safety measures and comfort for users. b) Express roads – roads with two or more lanes access to which is possible only through grade-separated road junctions and direct intersections, on which roadway(s) transport vehicles stoppage or stationing is not allowed;





c) Republican roads – roads which ensure connection between the state capital and resident towns, municipalities and objectives of republican importance (industrial centres, resort areas, public entertainment spots, natural reservations, historical and cultural monuments of national importance), as well as connection between resident towns, between municipalities, resident towns and municipalities, and also between resident towns and railway stations, airports and fluvial ports from near adjacency; d) Regional roads – roads of regional importance which ensure connection between localities from two or more districts or between minimum 4 localities from an administrative-territorial unit;

3) Local roads – roads which ensure connection between resident towns and villages (communes) from a district, as well as connection between villages (communes), including access to them from the national roads, and which are public properties of the administrative-territorial units; 4) Streets – public roads from within localities and which are public properties of the administrative-territorial units; 5) Commune roads – roads which ensure connection between the resident village of the commune and component villages or facilities of common interest and which are public properties of the administrative-territorial units;

(4) Based on their technical parameters roads are classified in technical categories according to Annex 1. (5) Based on the type of pavement roads are classified into:

a) Roads with rigid pavement (permanent) – with asphalt concrete or cement concrete pavements; b) Roads with flexible pavement (semi-permanent) – pavements from local materials covered with bitumen binder; c) Roads with temporary pavement – paved roads.

Road Law Appendix 1 provides the technical categories associated with the functional classification, which is shown in Table 3.2. Table 3.2 Technical Categories of Public Roads in Moldova

Technical category of

the road Functional destination of the road

Intensity of perspective traffic (average annual daily traffic), in

physical vehicles

Type of recommended

road

I-a

National roads with highly intense traffic, designed exclusively for auto-

vehicles circulation, including international traffic

over 16000 Highways

I-b National roads with intense traffic,

designed for republican and international traffic

8001–16000

Express roads

II National roads with medium traffic, 3501–8000 Two lane roads





opened for international traffic

III National roads with reduced traffic 751–3500 Two lane roads

IV Local and commune roads with very

low traffic 200-750 Two lane roads

V Commune secondary roads under 200 Two lane roads


It is noted that the technical categories of roads resemble the structure of the SNiP highway design standards, which given the status of current legislation are by law the applicable standard for road design. However, the Consultant finds that the updated functional classification system should be linked to updated and modern design standards. The legislative background reveals the planned functional classification of roads. However, the current reality is some way short of what is proposed. For example, there are currently no A class or Autostrada/Motorway roads in Moldova and regional roads are generally not identified as G class. Currently, selected local roads are being considered for reclassification to Republican status, partly to reflect their traffic usage but also to facilitate a change of ownership and consequently gain access to wider sources of funds for rehabilitation and maintenance. Road classification is an issue which is covered by the Draft Transport and Logistics Strategy which forms the primary output of the current study. 3.5. Reform of Road Financing

The reform of road maintenance financing and a large increase of funding for road maintenance has been a key condition for the financing of road investments by the IFIs including of the Road Fund Law. At the latest joint visits of the International Financial Institutions (IFIs) the following was recorded:

In late December 2009 the revised Road Fund Law was enacted to include a commitment for allocating no less than 50%, 65% and 80% of the revenue from the fuel excise tax, in budget years 2010, 2011, and 2012, respectively, to the Road Fund for road maintenance;

The fuel excise tax has been significantly increased in 2010 to a level of MDL 2,700 and 1,125 per ton of gasoline and diesel, respectively;

In 2011 the Government kept the fuel excise taxes at the 2010 level, and substantially complied with the amended Road Fund Law and its obligation under the “Condition Precedent” (CP) in the Compact with MCC and IFIs agreements, meeting both the 65% allocation of the excise tax on fuel and the LTIS target providing a total of about MDL 788 million, MDL 12 million (1.5%) short of the LTIS target of MDL 800 million;

MTRI confirmed to the IFIs joint team that MOF has increased the fuel excise tax in 2012 from MDL 2,700 to MDL 2,885 per ton of gasoline, and from MDL 1,125 to MDL 1,200 per ton of diesel fuel;

MTRI also confirmed that the 2012 budget allocation plan for the Road Fund meets the LTIS commitment of 1,025 million MDL;

It was also noted in the LTIS that the fuel excise tax should be increased to a level of MDL 3 per litre of both gasoline and diesel to be achieved in 2010, equivalent roughly to





MDL 4,150 per ton of gasoline and about MDL 3,470 per ton of diesel. The present fuel excise tax level is thus far below the level that is envisaged in the LTIS.

The total revenue to the Road Fund has been projected by the MOF through the year 2014, based on the amended Road Fund Law and the current taxation level. Notwithstanding possible increases of road maintenance allocations for 2013 and 2014, the estimated MOF base plan for Road Fund revenues is a shown in lines (a) to (e) in the table below.

Table 3.3. Road Fund Allocation, Years 2011-2014

Source: Government of Moldova

Road maintenance costs in the LTIS were based on 2007 level costs. It is proposed that the costs put forward in the Government of Moldova’s document “Moldova 2020” be used as the starting point for updated figures. In the opinion of The Consultant the “Moldova 2020” values are predominantly reasonable (see Table 3.8). The finalized cost figures are expected to be confirmed in early 2013 dependent on approval of the TLS by the Government, and as new MoF data becomes available. 3.6. Road Program 2011-14 The Government of Moldova has successfully worked with several International Financial Institutions (IFI’s) to secure funding for Road Projects. The following agreements are in place:

Financing Agreement between the Republic of Moldova and the International Development Association (IDA) of May 3, 2007;

Financing Contract between the Republic of Moldova and European Investment Bank (EIB) of June 28, 2007;

Loan Agreement between the Republic of Moldova and European Bank for Reconstruction and Development (EBRD) of June 28, 2007;

Financing Agreement between the Government of the Republic of Moldova and European Commission (EC) of December 3, 2008 (NIF grant managed by EBRD);

Financing Agreement between the Republic of Moldova and the International Development Association of May 3, 2007 (CE grant through IDA - managed Trust Fund);

U.S. Government grant (MCC) signed between the Republic of Moldova and Millennium Challenge Corporation (MCC) on January 22, 2010.





Through the Road Sector Support Project, established under the guidance of the World Bank a series of feasibility studies, as well as design works have been carried out over recent Years. In addition the Millennium Challenge Corporation has carried out considerable works in preparation for the road corridor M2. These combined efforts of the Government of Moldova and the IFI’s resulted in a road rehabilitation program for the Years 2011 through 2015. Table 3.4 (a,b,c,d) presents the components of the current SRA administered Priority Road Investment Plan for the period 2011-15. Table 3.4.a. National Roads Rehabilitation Program 2011-2015 Rehabilitation External Funding

No. Name of road Finance Source

Length km

Cost (Mio. EUR)

Performance period

1 2 3 4 5 6

Contracts under Performance

1.1 M2 Chişinău-Soroca EBRD 28.6 13.6 2011-2012

1.2 M2 Chişinău-Soroca EIB 16.3 4.8 2011-2012

1.3 R3 Chişinău-Hînceşti EIB 8 8.7 2011-2012

1.4 R14 Bălţi-Sărăteni EU 19 9.6 2011-2012

1.5 R14 Bălţi-Sărăteni EU 4.7 2.5 2011-2012

1.6 M2 Chişinău-Soroca EIB 20.5 9.2 2012-2013

1.7 M3 Chisinau-Giurgiulesti EBRD 26 11.9 2012-2014

1.8 M3 Chisinau-Giurgiulesti EBRD 28.4 12.7 2012-2014

1.9 M2 Chişinău-Soroca MCC 24.2 21.3 2012-2014




Subtotal 244 148.8

Contracts under Procurement

2.1 R1Chişinău-Ungheni EIB 17.6 25 2013-2015

2.2 R1Chişinău-Ungheni EIB 44.2 35 2013-2015

2.3 R1Chişinău-Ungheni EU 7.8 10 2013-2015

2.4 M3 Chisinau-Giurgiulesti EBRD 31.2 25 2013-2015

2.5 R1Chişinău-Ungheni EBRD 22 19 2013-2015

2.6 R33 Chisinau-Lapusna EBRD 37.2 23 2013-2015

2.7 R1Chişinău-Ungheni EU 5.7 6.1 2014-2015

2.8 M3 Chisinau-Giurgiulesti EU 8.6 9 2014-2015

Subtotal 174.3 152.1






Table 3.4.b. National Roads Rehabilitation Program 2012-2014 Rehabilitation National Funding

5. State Budget, Road Fund (mil. EUR)

No. Name of road Length

km Cost (Mio.

EUR) Performance

period

1 R30 Anenii- Noi- Causeni-Stefan Voda- Ukrainian border

7 3.59

2012

2 R30.1 Causeni bypass 2.5 3.50 2012

3 R20 Rezina-Orhei-Calarasi 13 5.43 2012

4 R20 Rezina-Orhei-Calarasi 2 1.12 2012

5 R18 Floresti-Nicolaevca-Singerei 0.8

0.91 2012

6 R18 Floresti-Nicolaevca-Singerei 1.33

7 R26 Tiraspol-Causeni-Cimislia 1.24 1.90 2012

8 R44 calarasi-Lozova-Hincesti 2.4 0.77 2012

9 R56 Cania-Baimaclia-Taraclia de Salcie-R38 2 1.32 2012

10 L186 Floresti-Vadeni-L107 4.5 1.91 2012

11 L68 Donduseni-Sudarca-R9 5 1.15 2012

12 L649 Ceadir Lunga-Congaz 5.8 1.07 2012

13 R20 Rezina-Orhei 21 12.60 2013

14 R20 Rezina-Orhei 13 3.93 2013-2014

15 R26 Tiraspol-Causeni-Cimislia 6 2.17 2014

16 R26 Tiraspol-Causeni-Cimislia 43.7 21.20 2013-2014


5 3.22

2013


4.5 2.00

2014


9 4.47

2014

20 R30 Troita Noua bypass 6.5 4.40 2014

21 R30 Grigorievca bypass 3.5 1.67 2014

22 R30 Causeni bypass 5.5 5.92 2013-2014

23 L186 Floresti-Vadeni-L107 6 2.16 2013-2014

24 R18 Floresti-Nicolaevca-Singerei 38.4 7.19 2013-2014

25 R44 Calarasi - Lozova- Hincesti 7 4.81 2013-2014

Total SB/RF 217 98.4


Table 3.4.c. National Roads Rehabilitation Program 2011-2015 Rehabilitation Unidentified Funding

6. Unidentified Funding (mil. EUR)

No. Name of road Length km Cost (in Mio

EUR) Performance

period

3.1 R14 Bălţi-Sărăteni 32 38

3.2 R16 Bălți-Sculeni 54 35

3.3 R13 Balti-Soldanesti-Ribnita (section Balti-Gura Camencii)

40 31





3.4 R34 Hincesti-Leova-Cahul 125 78

3.5* R6 M1-Ialoveni (section M1-R3) 7 10

3.6 R9 Soroca-Arionesti 31 16

3.7 M3 Chisinau-Giurgiulesti (section Porumbrei-Cimișlia)

26 38 No design

documentation available

3.8 M3 Chisinau-Giurgiulesti (Comrat bypass) 18 17 No design


3.9 M3 Chisinau-Giurgiulesti (SloboziaMare bypass)

20 22

3.10 R3 Hincesti- Cimislia 40 24

3.11* M21 Chisinau-Dubasari-Poltava Chisinau bypass

10 25

3.12* M1 Chisinau-Leuseni 8 16 No design


Total 411 350


Note: *South-East bypass of Chisinau

Table 3.4.d. National Roads Rehabilitation Program 2012-2014 National Maintenance Funding

No. Name of road Length km Cost (in Mio

MDL) Performance period

Surface bituminous treatment 1096 408.3 mil MDL 2012-2014


The program includes a total 1,047 km of roads identified for rehabilitation and a further 1,096 km for resurfacing. The road sections identified for rehabilitation are subdivided by Contracts under performance and contracts under procurement with committed contributions from EBRD, EC, EIB and MCC and presented in Table 3.4.a. The rehabilitation of R1 Chisinau - Ungheni (85.1 mil EUR) is the largest investment in the program. These contributions combined amount to 301 mil EUR and cover 419 km of road, all of Magistral or Republican classification. As shown in Table 3.4.b, a further 217 km costing approximately 99 mil EUR is to be financed by the state budget. These are sections of Republican road with the exception of L186, L68 and L649. The latest program update from SRA shows that it is still planned to commit state budget funds to 12 of the 25 roads listed in Table 3.4.b in the period up to and including 2014. The exception is roads rehabilitated in 2012. However, the planned kilometres of rehabilitation have apparently increased from 211 to 217. As presented in Table 3.4.c 411 km of roads, at a total of 350 mil EUR, have yet to obtain agreed financing. This includes the rehabilitation of Chisinau Southern Bypass corridor which accounts for 51 mil EUR and comprises three sections of road with a total of 25km.





In total 1047 km are proposed for rehabilitation at a cost of 750 million EUR, or about 716,000 EUR per km. Some of the sections listed in the tables include construction of limited by-passes and therefore represent new construction. Sections of reconstruction/rehabilitation on the existing road alignment average at around 630,000 EUR per km. Sections of new construction are estimated at around 1.5 mil EUR and sections of existing road that require substantial reconstruction and adjustments in alignment, such as M2 and R1 are in the range of 900,000 EUR to 1 mil EUR per km. In addition, 409 mil MDL (approximately 28 million EUR) has been allocated for 1,096 km of resurfacing. Table 3.5 presents a summary of the costs. Table 3.5. Summary of On-going Road Rehabilitation Program

Type of work Km Total Cost €m Cost per km Annual km (2011-15)

Annual Cost €m (2011-15)

Rehabilitation 1,046.3 749.3 0.716 209.3 149.86

Surface Treatment* 1,096.0 27.22 0.025 365.3 9.07

*(2012-14)


Given the condition of the Moldovan road network and its extent the road rehabilitation program is a challenging task. Firstly road rehabilitation is expensive and Moldova will need further cooperation of the IFIs to raise needed funds. Secondly, very little activity in the years prior to the RSPSP in the road construction sector has occurred and modern design, tendering, procurement and execution of works require on-going capacity building in the road sector. In the years 2011 through 2013 SRA on average 80 km of road rehabilitation contracts were procured per year. Four contracts were signed in 2011 and 11 contracts in 2012 in order to execute the externally funded projects. However, in order to complete the overall 2011-2014 program around 200 km would have needed to be procurement in approximately 40 contracts. Figure 3.2. The Dynamics of Performed km with Number of Signed Contracts 2011-2015

Source: SRA





Figure 3.3. 2011-2014 Road Program


3.7. Level of Road Maintenance Expenditure

The ERF European Road Statistics 2010 and 2011 provide data in regards to level of maintenance expenditures for selected countries for the year 2008. (the latest version of the ERF European Road Statistic unfortunately does not provide a similar graphic). As noted above the definition of works included in maintenance activities can vary widely between agencies and countries and the data presented might serve as an indicative trend.





Figure 3.4. Maintenance Expenditure in Road Infrastructure per Km of Total Network

Source: ERF European Road Statistics 2010

The current level of road fund allocation in Moldova of 1.02 Billion MDL corresponds to roughly 67 mil EUR. Given the extent of the network of 9,322 km length an annual allocation per km of road in the amount of 7,187 EUR can be calculated. Compared with the levels of expenditures presented in Figure 3.4, above, Moldova’s level of allocation is higher than 17 of the 24 listed countries. Reporting on the expenditures of the road fund lacks in clarity of definition of the works undertaken. It is difficult from the published documents to assess amounts of works carried out in the areas of routine maintenance, periodic maintenance, and special works. 3.7.1. Allocation of Funds Road works in Moldova are financed according to Road Fund Law nr 720-XIII from 02.02.96 and Regulation on Establishment and Use of Road Fund nr 893-XIII from 26.06.96. The annual amount of funds for road repairs and maintenance of public roads is determined by Government, according to Work Programme which is developed by Ministry of Transport and approved by Parliament of Republic of Moldova. According to SRA currently the basis for medium and long term planning is the LTIS 2008-2017, approved by Government decision nr. 85 from 01.02.2008. Budget planning is conducted based on overall network condition, as well as intervals between two consequent repairs (capital and periodic) Funds are allocated by district for repairs and maintenance of road network and is based on the length of road in a given district. Several factors are applied:





Conversion factor of real network length to 7 m wide asphalt carriage way;

Correction factor dependent on road importance;

Correction factor on traffic intensity;

Correction factor depending on road technical category. Works are defined according to “Departmental instructions of classifying and defining reconstruction, repair and maintenance works on public roads of Moldova, financed from Road Fund”, approved by minister ordnance, nr. 01/226 from 18 August 1999. In summary the instructions define that: Reconstruction is a set of works intended to improve the technical and operational characteristics of roads with bringing the existing road or separated sections into a higher technical category (higher level). Reconstruction works include: limited realignments, correction of longitudinal profile, bypass sections of localities, carriageway widening, bridges widening, reconstruction of intersections and junctions. Reconstruction works are carried out according to technical documentation prepared under methodology approved by MTRI of Republic of Moldova. Reconstruction works are analogical to construction works methodology. Reconstruction works are carried out based on feasibility justification with further design and cost estimation documentation. Road capital repairs and adjacent structures includes a set of activities which include replacement of worn structures or elements or replacing them with more durable and efficient elements, which will improve transportation and operational parameters of repaired elements, ensuring improved durability of pavement structures, bearing capacity, bridge clearance and overall dimensions in limits of design manual specifications for prescribed technical category of road and approved by technical documentation, with exception of total replacement of base layers and structures which have bigger asset lifecycle (capital foundations, engineering structures walls). Capital repair works are carried out completely for all elements and structures of road on all length of repaired section. Example of activities: improving bearing capacity, widening (not more than one lane), construction of modern pavement structure with existing pavement as a foundation; constructing new pavement on limited sections according to existing category of road. Medium repair is considered a repair which is intended to compensate the pavement’s surface course and maintaining initial operational characteristics of road and related structures. Usually repair works are carried out on limited sections of roads. Objective of medium repair is partial recovery of road wear, maintaining roughness level, correction of slope failures, water discharge system, consolidation structures, road furniture which is within the road section under repair. Medium repairs are established for specific sections according to annual condition report, taking in account pavement service life. Example of activities: total cleaning of ditches and side drains, repair of drainage structures, river bed correction under bridges, shoulder strengthening; surface bituminous treatment, recovering or execution of new surface layers for asphalt roads, ensuring the texture of surface course, correction of concrete slabs for concrete roads, entire profiling of earth roads, profiling of gravel roads, curvatures widening.





Recurrent Repairs are intended to prevent and retrieve small distresses, repair activity which is performed continuously during the year on all road length. Recurrent repairs are scheduled in the basis of summary indices by km of road. Recurrent repairs objective – eliminating the insignificant distresses, which may appear during operation of roadway, embankment, water discharge system, engineering structures, sustaining walls, road furniture, access roads, and passages as well as prophylaxis activities during flooding. Road Maintenance during Spring, Summer and Autumn: Maintenance is a set of activities to keep the roads clean continuously during the year. Maintenance works are planned by km of road. Examples of activities performed: slope correction without addition of materials, culvert cleaning of rubbish, snow, mud, ice, objects that prevent normal water discharge; activities for preventing water accumulation in embankments during snow melting, local remedy of engineering structures, grass cutting, bush cutting, re-gravelling, cleaning the asphalt from dust, mud, paining sign stands, poles, guardrails, bus stations, road marking, maintenance of road illumination, signalling, road furniture; carrying out traffic counts for maintenance department needs, road inventory. Winter Maintenance – is ensuring continuity of traffic on public roads at normal speeds, maintaining road integrity by performing activities of snow removal and surface frost prevention. Programming of funds is conducted according to: Status of the Road Repair and Maintenance practice In order to determine the overall fund allocation from Road Fund of Moldova (RF) for the period 2008 – 2012 the allocation practice has been summarized below. Based on the annual report No. 331 from 20.03.2008, the total volume of Road Fund has consisted 195 mil MDL in 2008. From this amount about 60% were allocated to maintenance works and 40 % for repair works. Approximately 18 km of Republican roads were rehabilitated entirely, applying Pavement Reconstruction. In addition, pavement reconstruction was carried out on limited sections of roads with un-specified length. As for local roads, 46 km have been rehabilitated entirely, as well as limited sections without specification of lengths. No magisterial roads have been rehabilitated. In 2009 the total amount of Road Fund consisted 249 mil MDL, in proportion of 88% for maintenance and 12% allocated for rehabilitation works. In comparison to 2008 to the RF was allocated more money but much less for improvements. The annual Government Report does not specify the lengths of the rehabilitated roads sections, which is inconsistent to similar reports of other years. It is however mentioned that rehabilitation works have been carried out on Magistral road M2 without specifying the length in the annual report, as well as rehabilitation of seven local roads. (Reference Government Report No. 264 from 07.05.2010). In 2010 the RF reached nearly 583 mil MDL. Split in an allocation of 84% for maintenance works and 16% for rehabilitation. According to the Government report (Reference no.199 from 11.03.2011.): 18 km of Magistral roads, 55 km of Republican roads, 11 km of local roads have been rehabilitated. In addition, on limited sections of Magistral, republican and local roads rehabilitation works have been carried out, without specifying types of works and lengths.





In 2011 the amount of funds in RF increased to the value of 788 million MDL. For maintenance activities during 2011 was planned about 85% and about 15% for rehabilitation works including the design services. According to the annual draft report (Reference no. 219 from 24.02.2012) the following rehabilitation works are specified: 93 km of Magistral roads; 120 km of Republican roads; 57 km of Local roads. In 2012 the RF reached a funding level of 1.24 billion MDL with an allocation to maintenance activities of 88%, and 12 % projected to rehabilitation works .Works foreseen include the rehabilitation of 13 km of republican roads and 4 km of local roads. Table 3.6 below summarizes the RF allocation over previous 5 years; it has to be noted that some data is missing due to lack of information available. Table 3.6. Allocation of Road Funds to Activities

Source: www.lex.justice.md All costs are expressed in thousand MDL *Cost of road works ** Selectively because the types of works and lengths are not specified According to the data above, the dynamics of RF annual distribution are presented in bar chart: Figure 3.5. Allocation of Road Fund by Road Category


Road Fund

Total Maintenance Rehabilitation* Km/year

Year

Mio. MDL National Local National Local M-

Roads R-Roads Local

Total km/year

2008 195,000 81,800 28,800 44,200 35,200 0 18 46 64

2009 248,910 121,570 62,180 5,960 25,120 N/A- N/A-- N/A--

2010 582,980 252,780 124,870 61,570 31,370 18 55 11 84

2011 787,984 403,600 191,990 89,890 28,050 93 120 57 270

2012 1,024,815 596,815 228,000 100,000 25,000 0 18 4 22

Average: 19 35 20 74

http://www.lex.justice.md/





The overall lengths of rehabilitated roads in 2009 are missing, but a set of sources mention that the overall amount of road works was similar to those in 2008.

3.8. Financing Local Roads

The Republic of Moldova has registered significant achievements in economic development and poverty reduction. Nevertheless, the development disparities affecting the rural areas continue to increase due to unsolved structural problems of the country's economy and government. The local infrastructure is poorly managed and its condition deteriorates constantly. Local public administrations have limited financial means and suffer from a shortage of qualified staff. In particular the provision of public services to the population of rural areas is unsatisfactory. The main problem to be addressed by this project is: rural communes are not able to provide citizens with the necessary public services.

Local governments do not have financial means to deliver the services assigned to them. Redistribution of tax revenues at communal level is subject to annual political negotiations and reallocation procedures are not sufficiently transparent which makes planning uncertain. Furthermore, administrative and personnel capacity of communities are insufficient to collect and manage the public service taxes. Local public finance management is poorly developed. Tariffs do normally not cover costs; frequent political conflicts between mayors and councils reduce the administration’s capacity to deliver public services to the population.

The main causes for the problem are unclear, partially overlapping, responsibilities for the provision of public services, especially in the relation between the local level vis-a-vis the district level and the line ministries on the national level.

Several projects and efforts are underway such as the

UNDP Joint Integrated Local Development Program,

the recently launched United States Agency for International Development (USAID):Local Government Support Project’s (LGSP), and

the GIZ project “Modernisation of Local Public Services in the Republic of Moldova (MLPS)”

The last project aims to enhance access of citizens to improved public services delivery in selected districts and rural communities in the South, Central and Northern Regions of Moldova. The project supports local and regional administration in project planning and implementation, including funding and management. Implementation partners include Regional Development Agencies (RDAs), Regional Development Councils (RDCs) and Local Public Authorities (at Rayon level). The project aims at:

(i) Updating Regional Development Strategies with Regional Operational Plans, (ii) Develop a project pipeline of investment fiches (pre-feasibility studies) in the priority

areas of water and sanitation, solid waste management and energy efficiency of public buildings, as well as local roads

(iii) Develop capacities of local and regional administrations and development structure

3.8.1. Conclusions

In last 20 years the annual allocated funds to roads were covering only about 10% of full needs. In result, the elaborated in 1997 “Regulation of expenditures for recurrent repairs and routine maintenance of one km of road” although approved by the Ministry of Finance, has not ever been applied.





Considering the increase of funds allocated to roads during the last 2 years, for 2013-2014 modification of the above mentioned Regulation is proposed: Reporting – management of roads – road management system Documentation of functional classification is needed to efficiently apply the maintenance allocation. In addition it is recommended to:

- Develop and adopt a new road maintenance and design manual to allow for modern approaches in road design and maintenance;

- Recognise the latest developments in road rehabilitation and maintenance techniques with a view to incorporating them in a cost-effective best practice approach;

- Provide capacity transfer to local agencies in the planning and execution of maintenance and rehabilitation works.

The overriding objective should be to provide adequate year-round road infrastructure throughout the country to assist socio-economic development through the provision of access to educational, health, social and economic opportunities. Progress towards this objective can be measured by road condition, and specifically road roughness, surveys. It is proposed that a target of 60% of local roads be in at least fair condition (<6 IRI) by 2018 and 100% by 2032. 3.9. Needs Assessment The Consultant has prepared a maintenance strategy in which all of the roads are targeted to be in maintainable condition in year 2032 (20 years strategy) and there are no constraints on budget. This gives an indication of the amount and cost of work required to bring the total network of 9,322 km to at least satisfactory condition and maintain it in that condition over the stated period. In order to reach maintainable condition a majority of roads will need to be rehabilitated. The detailed plan is attached in Appendix 5 of this report. Table 3.7 presents the 2013 to 2032 network needs split into the categories Rehabilitation, Periodic Maintenance, and Routine Maintenance. Table 3.7. Financial Plan for Years 2013-2032, Unconstrained Budget

Road Class Length (km) Rehabilitation (million €uro)

Periodic Maintenance (million €uro)

Routine Maintenance (million €uro)

Total (million €uro)

Magistral Roads 819.9 619 314 70 1,003

Republican Roads 2,515.3 1,973 805 215 2,993

Local Roads 5,987.0 1,337 616 512 2,466

Total 9,322.2 3,932 1,735 798 6,465


3.9.1. Main Assumptions As main assumption for the unconstrained rehabilitation/maintenance budget the estimated 2011 cost estimates as presented in Table 3.7 were used. In addition the intervals as described in Table 3.8 were applied. The data was used as the basis to develop the National Development strategy and for reasons of consistency used in this methodology.





Table 3.8. Main Assumptions for Unconstrained Budget Needs

Frequency MDL 000s

€ 000s

per km per km

a. National Roads

Capital repairs (rehabilitation)

Cement concrete coverage 30 7500* 500*

Asphalt concrete coverage 16 7500 500

gravel coverage 9 450 30

Medium repairs (periodic maintenance)

Asphalt concrete layer 6 2450 163

bituminous treatment 4 450 30

profiling with added material 3 220 15

b. Local Roads

Capital repairs (rehabilitation)

Cement concrete coverage 25 3600 240

Asphalt concrete coverage 13 3500 233

gravel coverage 9 450 30

Medium repairs (periodic maintenance)

Asphalt concrete layer 6 1450 97

Bituminous treatment 5 350 23

profiling with added material 3 220 15

c. Capital repairs of bridges 16 34 2.3

d. Routine maintenance of national and

local roads (SRA estimates) continuous 64.2 4.3

Source: “Moldova 2020”, Government of Moldova * adjusted based on Information obtained from MoTRI

3.9.2. Identified Need Total value of the unconstrained financial plan is estimated at 6,465 million euro over 20 years for the 9,322 km of roads in Moldova. When spread over 20-years period, annual need is 323.25 million euro. 3.9.3. Current Funding Levels In 2013 total available funding for the road network of Moldova for rehabilitation, periodic and routine maintenance works is estimated to be 192 million euro, as presented in Table 3.9.





Table 3.9. Distribution of Available Funding for Year 2013

Funding source Allocation (year 2013)

in million euro

Road Fund 68

EBRD 25

EIB 24

EU 15

MCC 30

Budget State 30

Total 192 Source: The Consultant

3.9.4. Conclusions When comparing funding available in year 2013 with identified needs to achieve the goals outlined in the NDS it becomes apparent that a considerable gap between available funding and needed funding exists. In order to complete total network rehabilitation even within 20 years an additional 120 million euro per year are needed. The Consultant therefore proposes:

1. In the first 10 years (2013-2022) to focus on rehabilitation and maintenance of the Core-Road Network;

2. In the last ten years of the plan (2023-2032) to focus on the remainder of the road network under SRA management;

3. Improve the contracting methods (e.g. performance based maintenance) as well as starting to use modern planning systems (like Road management System) to increase savings.

3.10. Additional Financing To evaluate the sustainability of funding sources it should be noted that a large amount of the current funding comes from the IFIs. Instead of relying too much on funding from IFIs the funding from the RF should be increased (more user pay approach). Fuel Excise Tax Revenues (MDL millions) should be in year 2015 at least 1,500 (MDL millions) from latest MoF forecast of 1,119 MDL millions in 2012. In practice this would require an increase of 5.8 MDL/litre to gasoline and 5.5 MDL/litre to diesel prices. 3.11. Rehabilitation of Core-Network The Consultant proposes to focus the efforts in road rehabilitation and maintenance on the core network and complete rehabilitation works by 2018. Total length of the proposed core road network is 1,198 km. The Core road network is carrying approximately 67% of the vehicle kilometres on the national road network in Moldova. Approximately 350 km of the core road network is currently under procurement. MoTRI has initiated communications with the IFIs in order to possibly receive a further tranche of financing in the amount of 310 mil EUR. The sections identified by MoTRI for further financing that are part of the Core network are indicated as potential projects in Table 3.10.





Table 3.10. Core Road Network: Length and Current Status

Moldova Territory

Road No. Length Committed Potential Remaining

M1 92 92

M2 163 158 5

M3 196 96 64 36

M14 323 323

M21 37 10 27

R1 119 75 44

R2* 32 32

R3+ 30 30

R6 7 7 0

R14 67 21 46

R30 93 93

R33 38 20 18

Total MD: 1198 350 101 747

TNS Territory

Length Committed Potential Remaining

M4 184 184

M21 24 24

Total TNS 208 0 0 208

Total Network 1406 350 101 955

Note: * R2 comprises section Chisinau- Anenii-Noi + R3 comprises section Chisinau- Hincesti In detail the Core network is composed as shown in Table 3.11. Table 3.11. Core Road Network: Details of Road Sections

Road Name Road Class Starting

Point Ending Point

Length (km)

M1 Magistral Chisinau Leuseni 92

M2 Magistral Chisinau Soroca 163

M3 Magistral Chisinau Giurgiulesti 196

M14 Magistral Criva Pervomaisc 323

M21 Magistral Chisinau Dubasari 37

R1 Republican Chisinau Sculeni 119

R2 Republican Chisinau Anenii- Noi 32

R3 Republican Chisinau Hincesti 30

R6 Republican M1 junction R3 junction 7

R14 Republican Balti Sarateni 67

R30 Republican Anenii-Noi Palanca 93

R33 Republican Hincesti M1 junction 38






The aim is to have the entire Core Road Network in good/fair surface condition (IRI < 4) and under proper maintenance by 2018. This can lead to an increase in average travel speeds to approximately 70 kph with a simultaneous reduction in average vehicle operating costs (VOCs) as vehicles travel at more efficient speeds. A reduction of 0.01 EUR/km for cars and 0.10 EUR/km for goods vehicles is targeted. For the remainder, approximately 8,100 km, of the road network in Moldova it is aimed to achieve the same results by 2032 with the exception of the proper maintenance regime which, as with the Core Network, is targeted for 2018. In addition to the Core Road Network a Next to Core Network has been provisionally identified. This will form a secondary priority after the Core Road Network and comprises about 770 km of republican roads. The Next to Core Network road sections are listed in Table 3.12 and sketched in Figure 3.6. Table 3.12. Next to Core Road Network: Details of Road Sections

Road Name Road Class Starting Point Ending Point Length (km)

R7 Republican Soroca (R9 jct) Riscani (M14 jct) 58.7

R8 Republican Otaci Edinet 55.2

R9 Republican Soroca Otaci 40.6

R13 Republican Balti Rezina 93.1

R16 Republican Balti Sculeni 54.5

R20 Republican Rezina Calarasi 105.4

R26 Republican Causeni Cimislia 57.9

R34 Republican Hincesti Slobozia Mare 167.2

R36 Republican Ceadir-Lunga M3 jct 23.5

R37 Republican Ceadir-Lunga Comrat 33.7

R38 Republican M3 jct Cahul 36.3

R46 Republican Pleseni Iargara 10.2

R47 Republican Cimislia Sarata Noua 40.0

Source: The Consultant/SRA

In the medium to long term the Next to Core Road Network will become an important step in improving Moldova’s infrastructure due to a number of reasons. After rehabilitation of the Core Road Network, access to distant areas should be improved. Connecting all the districts to the Core Road Network, either directly or via the Next to Core Network will have a beneficial influence on the social and economic development of remote areas of the country. Therefore, defining and improving the Next to Core Network will have a positive impact on transportation from/to rural areas. The Core Road Network and Next to Core Road Network together include all those roads which have been submitted by the Government of Moldova to the Eastern Partnership Transport Panel (EPTP) and will be considered as part of the future TEN-t.





Figure 3.6. Identified Next to Core Network Road Sections






Future Road Financing: Resources and Requirements In terms of the relationship between available finances and anticipated funding requirements over the twenty year period to 2032 two main scenarios have been assessed:

Scenario based on the recommendations of LTIS;

Scenario including revisions to LTIS assumptions where they are no longer applicable. I. LTIS-Based Scenario Figure 3.7. LTIS- Based Scenario


Assumptions Made:

1. From 2013 Road Fund is raised to the level of LTIS projections ( Petrol 4150 MDL/ton, Diesel 3470 MDL/ton, gas (The Consultant’s estimate) 3897MDL/ton);

2. Road Fund will increase constantly by 5% per year; 3. No External Funds Required; 4. Maintenance activities and intervals were applied according to NDS “Moldova 2020”; 5. During 2013-2017 rehabilitation measures will be focused on core network only.

Figure 3.8. Adjusted Funding Balance According to LTIS-Based Scenario






The balance at the end of the period under LTIS-Based Scenario is 27.74 mil EUR surplus. II. Revised Scenario Figure 3.9. Revised Scenario


Assumptions made:

1. From 2014 RF will increase constantly by 5% per year; 2. Amounts of external funding are constant for total period; 3. Maintenance activities and intervals were applied according to NDS “Moldova 2020”; 4. During 2013-2017 rehabilitation measures will be focused only on core network.

The variations in required funding from year to year shown in Figure 3.9 above are primarily due to the cyclical nature of road maintenance, notably periodic maintenance which, depending on road class and surface type, is implemented every three to six years. Road rehabilitation, in contrast, is evenly distributed year to year with the major variation being increasing costs over time. The funding balance for the Revised Scenario is shown on the chart below. Figure 3.10. Funding Balance for Revised Scenario






The balance at the end of period under the Revised Scenario is 775.65 mil EUR in deficit. Total needed amount of money, estimated by the Consultant for period 2013-2032:

- Rehabilitation: 2,819.4 mil EUR - Maintenance: 2,590.2 mil EUR

This comparison reveals that the assumptions made by LTIS regarding the level of Fuel Excise Tax have not been borne out in reality with far reaching implications. LTIS aimed for 4,150 MDL/ton of petrol and 3,470 MDL/ton of diesel in 2013. To date, in 2012, the respective rates have reached 2,885 and 1,200 MDL/ton. Realistically, it is not going to be possible to meet the LTIS timeframe with the result that Fuel Excise Tax, and consequently, Road Fund revenues are far short of what they need to be. In consequence, a small revenue surplus under the LTIS-Based Scenario becomes a very substantial deficit (775,65 mil EUR) under the Revised Scenario even with external funding levels maintained throughout the period. This leads to the conclusion that, given the Revised Scenario is reasonable, one or more significant changes will be required in the future funding of road rehabilitation and maintenance:

Significant and immediate increase in the levels of Fuel Excise Tax, particularly for diesel;

Significant increase in other Road Fund revenues or other national sources of funding;

Increasing external funding over an extended period. 3.12. Findings and Recommendations NCHRP Web Document 35 Rehabilitation Strategies for Highway Pavements (May 201) presents a detailed guideline for rehabilitation strategy selection procedures and identifies the following components for a successful pavement rehabilitation strategy: __Data collection: Gathering all of the information necessary to conduct an evaluation of the pavement's present condition and its rehabilitation needs. __Pavement evaluation: Assessing the current condition of the pavement, identifying the key types of deterioration present, identifying deficiencies that must be addressed by rehabilitation, and identifying uniform sections for rehabilitation and design over the project length. __Selection of rehabilitation techniques: Identifying candidate rehabilitation techniques which are best suited to the correction of existing distress and achievement of desired improvements in the structural capacity, functional adequacy, and drainage adequacy of the pavement. __Formation of rehabilitation strategies: Combining individual rehabilitation techniques into one or more rehabilitation strategy alternatives, developed in sufficient detail that the performance and costs of each may be confidently estimated. __Life-cycle cost analysis: Comparing the monetary costs and benefits of the different rehabilitation strategy alternatives over a common analysis period. __Selection of rehabilitation strategy: Considering monetary factors and non-monetary factors together in selecting one pavement rehabilitation strategy from among the alternatives considered.





(1) The rehabilitation process is illustrated in Figure 3.11. Figure 3.11. Road Rehabilitation Process

Source: http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_w35-a.pdf

http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_w35-a.pdf





3.13. Immediate Management and Financing Action Plan In order to continue the road rehabilitation and maintenance program in Moldova the existing Road Sector Program should be continued and its implementation monitored. The Consultant however finds that in order to support those efforts the MoTRI through the SRA should place specific focus on:

1. Continue establishing new contracting practices for routine and periodic maintenance; 2. Establishment of a location reference system; 3. Establishment of a modern road management system.

3.14. Establishment of New Contracting Practices for Routine and Periodic Maintenance Routine maintenance is maintenance activities that occur every year on a routine basis or of a cyclic nature. These activities include such aspects like winter maintenance, summer maintenance, pot hole patching, minor gravel road repair, minor drainage cleaning, road cleaning or sweeping, crack repair, vegetation control, cleaning (signs, bridges, roads), and trash removal. Figure 3.12 shows the difference between routine and periodic maintenance aspects and typical shows how they can be organized in a typical outsourced contract. Figure 3.12. Maintenance Contracts

Source: Finnroad Ltd

Periodic maintenance is defined as activities that occur infrequently in a planned way. Throughout the history most periodic maintenance tasks have been typically tendered as separate contracts and can include such activities as resurfacing, bridge rehabilitation/reconstruction, safety improvements, and other major improvements. Maintenance is usually one of those practices that do not receive much attention, recognition, glory, or interest amongst the decisions





makers until something goes wrong or if safety is compromised. Sometimes maintenance functions are not a significant priority for road authorities which may lead to budget reductions, lowering the Levels of Service (LOS), and reducing the satisfaction levels of the travelling public or road users. The main concern is with potholes, excessive road roughness, bumpiness, texture, and other non-desirable conditions that affect satisfaction of the road users.

Most countries are using some form of customer service audits to determine if the roads are in satisfactory condition, to assist in determining the customer satisfaction perception. Also, customer satisfaction surveys can become one tool to determine results of any outsourcing practices and determine if the perceived quality of service is increasing or decreasing. At the moment in Moldova the customer satisfaction surveys are not done. Over time, the attitude towards maintenance has changed somewhat and is becoming more of an issue and important aspect for taking care of the road network. Maintenance is also a new market for the private sector in those countries that outsource maintenance. Recently, there has been a focus or strategy in many countries for pavement preservation, asset management, and taking care of the existing road network as a first priority.

In Moldova road maintenance has conventionally been carried out in-house. There are currently 38 maintenance contracts. However, an on-going plan which received government approval in April 2012 aims to rationalise these into 12 contracts by the end of 2012 with the intention of encouraging private sector involvement.

Contracts in Moldova are standard contracts. The standard type of contract in civil engineering is the unit rate type contract with estimated output quantities based on a design and a fixed unit rate to carry out the estimated quantities under each pay item. A hire rate contract is based on the input quantities (number of equipment hours, workmen hours, materials quantities plus overhead and profit). This type of contract is used when the quantities are uncertain. One example is the use of hire rates in the standard unit rate contract, here normally called day works.

A suitable model to have maintenance organized for area wise contracts for routine and periodic maintenance is the performance based contract. The performance-based type contracts represent a more advanced type of contracting mainly for use in maintenance contracting and BOT (where the contractor constructs, maintains, the road and transfers it after the operation period) type contracts. These contracts are based on end user requirements i.e. certain standard levels and payments are based on lump sums per year or month to meet these standards.

3.15. Establishment of a Modern Road Network Management System

Based on the action plan on implementation of the public road maintenance system reform the Road Management System will be established in Moldova. The rudimentary traffic model developed in this project can be used as a starting point to develop the RMS. Road Management System should include:

i) Comprehensive road data base ii) Pavement management tool iii) Geographic information system (GIS)

There is partly PMS and GIS functioning in the road agencies but as everything should be based on comprehensive road and traffic data in the Road Data Base and this is missing the outputs are not reliable. Further it can be said the implementation of an efficient network management depends on the interaction of three fundamental components:





Processes

People

Technology If any of these components are lacking, the road network management will not be successful. The best technology in the world will ultimately fail if implemented in an environment where there are no people to run it, or where the processes are not in place to utilize it. The RMS in Moldova should be viewed as an integral component in the road agency’s monitoring and planning process. The outputs from the RMS should be used to prepare Annual Reports as this helps ensure that the data are collected regularly and the system is applied. The agencies which have most successfully implemented an RMS have made it an integral element of their business process. The RMS is used to establish needs, set priorities, and regularly monitor and report on the road network condition. Figure 3.13. Proposed Structure of the RMS

Source: Development of Road Management System and Procurement of Pilot Contracts for Performance Based Maintenance and Management of Roads/RIA/WB

3.16. Road Network Classification Functional and administrative classification of roads is fundamental to road management both in urban and interurban areas. Functional classification has a variety of uses including assigning jurisdictional responsibility, system planning, distribution of funds, evaluation of road space needs, access management, design standards, and data collection, to name a few important activities in a road administration. According to their function, four different levels of networks are identified: national (primary or main trunk) networks, regional networks (also known as secondary, departmental or state networks), rural networks (including community roads, tracks and trails), and urban networks (in turn functionally classified).





For sector authorities to be able to establish accountability for the conditions of the road networks, each of these network levels must be placed under a clear management structure and legal ownership. Functional classification should be based on data on population and employment centres and traffic volumes, from which an appropriate hierarchy of travel routes can be identified. The density of the road network by functional class is also an important consideration, and should be consistent with the region's level of income and economic activity; a rural area with low incomes cannot support a dense network of high-class or even low-class roads. Once a functional classification system for the road network has been established, administrative responsibilities can then be assigned to national or local agencies as appropriate. See the following reports for additional guidance on functional classification A road classification system has several purposes which are interrelated. Key among these are14: Planning. The application of a road classification provides a framework for policy formulation in road administration and management. Road classification assists planners in allocating resources for maintenance and development for the road network between different groups of roads and also for setting priorities. Design. A road classification system indicates an expected level of service for specific road classes and therefore provides guidance to design engineers in applying appropriate design standards. Administration. Road classification also clarifies responsibilities amongst road administrations and the assignment of road sub-networks. Usage. A well-defined and consistent road classification system influences road user expectations, behaviour and performance in traffic which improves the effectiveness with which the road network carries traffic. Hence the road classification system should provide road users with some confidence in the level and continuity of service intended to be provided. Typical appraisal projects would include the maintenance and rehabilitation of existing roads, widening or geometric improvement schemes, pavement upgrading and new construction.

3.17. Proposed Road Location Referencing System The fundamental objective of referencing is to identify a location of road and it is the means by which people can communicate the details of location. Firstly, the most important stage in any new road management system is to review the current road referencing system. At the moment, the road referencing system is based on kilometre posts. This, of course, is not very flexible should there be any changes in the road alignment. However useful these existing kilometre post could be as a location referencing points, it will be advised not to use them in the future. The main reason for this is that the interval of the kilometre posts is not always exactly 1km. This might lead to confusion in locating the places. To propose SRA to adopt a new referencing system based on node-link system. In the suggested system the road is divided into fixed sections (links) and they are numbered in

14

http://www.krb.go.ke/classification.html





continuing order from the beginning of the road. Section breaks are selected on fixed locations, which can be easily identified in the field without any doubt. Road intersections and points at stable structures like bridges make excellent section break points. The road referencing system will be based on node/section system. In order to do the sectioning, the roads should be identified on a map. The database will be based on 100m road sub-sections. Figure 3.14. Excerpt from Example Location Referencing System

Source: Development of Road Management System and Procurement of Pilot Contracts for Performance Based Maintenance and Management of Roads/RIA/WB

3.18. Opportunities for Increased Private Sector Involvement in Highway Infrastructure 3.18.1. Background This section assesses the potential for the introduction of public private partnerships in roads and highways in Moldova. In effect, the question that arises is one of what is more beneficial for Moldovan society, borrow the funds by itself at concessionary rates and construct / upgrade the road or, have third parties to construct the road and recover the cost through toll (or shadow toll) payments. What is most beneficial depends on the legal and institutional environment as well as on the economic case for the road in the first place and secondly on the cost differentiation between the two options for society as a whole. 3.18.2. Legal Provisions in Moldova The enabling environment for PPP and toll roads is established at the highest level in the Road Law15 of Moldova, which states as follows:

15

Law Nr.509-XIII of 22.06.95





¨Article 12. Paid traffic roads (1) It is accepted the construction or modernization of toll roads, bridges, viaducts with the condition of existing alternative non-toll roads. Expenses for their construction and maintenance will be covered by collection of passage fees. (2) Construction, modernization and usage of toll roads, bridges and viaduct is realized on the basis of concession contracts, the Land Code and other laws regulating concession contracts. (3) The function of concession provider is realized by the specialized central institution from the road sector.16 ¨

This article of the Road Law of Moldova provides for the concept of paid traffic (toll roads), though does not exactly specify what a toll actually is. For this purpose, we use the definition of a toll road as in accordance with EC Directive 1999/62/EC which states that:

‘toll’ means a specified amount payable for a vehicle based on the distance travelled on a given infrastructure and on the type of the vehicle comprising an infrastructure charge and/or an external-cost charge.

The Law on Public Private Partnerships17 of Moldova defines a number of potential PPP options. For the road sector, the concession contract would be the most obvious choice. A separate Law on Concession18 contracts is in place that facilitates the establishment of such contracts. This law does not exclude the Government providing loans and other guarantees. Thus, Moldova does have the required legislation in place to ensure that Public Private Partnerships, such as Toll Road Concessions, are possible. 3.18.3. General Options for Public-Private Partnerships Transportation agencies are facing a fiscal challenge caused by the growing gap between the costs of providing and preserving the road network infrastructure and available funding. The inability of motor fuel taxes to provide adequate funding has prompted transportation policymakers to consider alternative ways to finance and deliver needed transportation infrastructure. Public-Private Partnerships (PPPs) represent a wide variety of project financing and delivery approaches which offer the potential to expedite project delivery, operations, and maintenance in a more cost-effective manner, enabling transportation agencies to effectively do more with less. The common element of a PPP is that the public sector sponsor of infrastructure projects engages the private sector to a lesser or greater degree in the performance of certain functions previously handled by the public sector. This can range from contracted maintenance services to full financing, development, operations, and preservation. Public-Private Partnership or PPP is not a precisely defined term. It embraces a range of structures and concepts, which involve the allocation of risks and responsibilities between the public and private sectors19. The perceived benefits of PPPs, which do not always materialise, are as follows:

16

Original text: Articolul 12. Drumurile cu trafic platit (1) Este permisa constructia drumurilor, podurilor, viaductelor cu trafic platit. Cheltuielile pentru constructia si intretinerea lor se compenseaza din contul platilor taxei de trecere. (2) La constructia drumurilor, podurilor, viaductelor cu trafic platit pot fi atrase investitii straine. (3) Conditiile pentru constructia drumurilor, podurilor, viaductelor cu trafic platit se stabilesc de legislatie. 17

Law No 179 of 10.07.2008 18

Law No 534 of 13.07.1995 19

http://www.fhwa.dot.gov/ipd/pdfs/us_ppp_case_studies_final_report_7-7-07.pdf





No investment for Government, thus leaving fiscal space for other projects20;

It may allow the construction of key infrastructure ahead of its time in an environment where fiscal constraints create competition between priorities.

The above however does not mean that there are no risks to the use of PPPs in general and Moldova in particular. The single largest risk in terms of a user paid concession would be the absence of sufficient traffic to provide for a reasonable margin with acceptable tariffs. In case of shadow tolling, it would be traffic higher than expected, creating larger than expected costs. The reasons for this can be non-exhaustively listed as21:

Over-optimistic or pessimistic traffic forecasts,

Tariffs exceed willingness of users to pay,

In case of shadow tolling, a vastly improved infrastructure not directly charged to users attracts additional traffic from other corridors,

Improvements in competing, non-tolled corridors reduce advantages,

Economic development does not materialise (both time and location). Fundamentally, PPPs introduce, as a minimum, private management into public service through a long-term contractual bond between operator and a public authority. It secures all or part of the public service, so delegated by private funding and calls upon private sector know-how. Although the field of PPPs continues to rapidly evolve, considerable differences in the definition and application of terminology remain. Legal definitions developed to assist in the regulation of PPPs may not precisely match the operational characteristics of a specific project. 3.18.4. External Risk Factors Affecting Potential Viability of Any PPP Scheme in Moldova A PPP in the road sector in Moldova would most likely involve a concession contract for the financing, construction, operation and eventual transfer of a road or sections of a road. The viability of such a scheme would depend on the traffic that will actually use the infrastructure at a given tariff. This involves factors such as the total potential number of users, the cost of the toll per km travelled, the availability of viable alternatives and the value of time for potential users. In addition, there is EU directive 1999/62/EC, already mentioned earlier, which deals with the imposition of user charges on road networks. This directive states that:

Article 7 (2) Member States shall not impose both tolls and user charges on any given category of vehicle for the use of a single road section. However, a Member State which imposes a user charge on its network may also impose tolls for the use of bridges, tunnels and mountain passes.

This potentially limits the future ability of Moldova to raise and keep revenue from any user charges in line with the said Directive but also may affect the viability of the entire scheme by transferring traffic away from the toll road or by actually increasing the traffic on the toll road, depending on the solution chosen. The example from Poland provided by a study from the World Bank22, which did have a user charge and financed some major highways by means of toll concessions is telling.

20

The actual fiscal space and / or borrowing capacity may depend on the degree of risk transfer, discussed later. 21

Standards and Poor´s, 2002, Traffic Risk in Startup Toll Facilities 22

Road User Charges: Current Practice and Perspectives in Central and Eastern Europe, Worldbank, 2008





Below an excerpt of the most important sections of the report (which is based on the situation of 2008) is provided as a cautionary tale against rushing into PPP without giving due consideration of the consequences elsewhere.

Direct User Charges In Poland, two types of user charges are imposed directly on road users: toll and vignette. Pursuant to the above mentioned Law on Toll Motorways and the National Road Fund, toll motorways in Poland can be built and/or operated by private companies or the national road agency (General Directorate for National Roads and Motorways). If tolls are collected by a private operator, they constitute the operator’s revenue. Tolls are levied both on passenger cars and heavy goods vehicles. The toll rate depends on the number of axles. Vignette Compensation As the motorway network is a part of the national road network in Poland, there was a concern (until September 2005) that truck drivers had to pay twice for the same road section (by paying toll and paying for vignette card for a certain period of time). Since September 2005, to avoid the situation of double-charging on motorways that would be against EU law, vehicles with valid vignettes do not pay real tolls on motorways. Toll motorway operators may collect toll only from drivers of passenger cars. So as to compensate the loss of revenues from tolls on heavy vehicles, private toll motorway operators receive a financial compensation paid from the revenues from vignettes and international transport licenses. As a consequence a new element of payment mechanism for toll motorway operators has been introduced - shadow toll for heavy traffic. The operator receives 70 percent of negotiated compensation rate per vehicle, different for various categories of vehicles. Compensation rates had been negotiated in the annex to operating contracts (concession agreements), indexed regularly for inflation, exchange rates and other factors. The maximum compensation rates are equal to toll rates as of 1 September 2005. Toll rates were raised accordingly on that day to provide the operators with the negotiated compensation rate range. As a result of shadow toll mechanism, heavy traffic on motorways increased by up to 250 percent. As heavy vehicle traffic on motorways has increased now the amounts of compensations are rising. Compensation for Autostrada Wielkopolska S.A. is significantly higher due to the longer stretch of operated motorway (149 km vs 61 km), higher traffic and higher compensation rates. The compensation is currently consuming most of the revenue from vignettes (in 2006 compensation amounted to nearly 74 percent of the revenue from vignettes, in 2007 the ratio was 83 percent ) and is expected to exceed this revenue should new stretches of privately operated toll motorways be opened, including the second Autostrada Wielkopolska S.A. stretch and two stretches currently under tender (these are sections in central Poland: A2 Stryków-Konotopa and A1 Stryków-Pyrzowice)”

Of course, this situation is not sustainable, so a legal change was initiated to exclude the said roads from the requirement of having a user-vignette and through this makes it possible to collect tolls from all categories of vehicles (including those over 3.5t). Currently, Moldova charges foreign registered HGVs a user charge at the border on entry. This will be extended to a vignette for all foreign registered vehicles in 2013. A draft law provides for three types of fee: 3 day – 7 EUR, 30 days – 65 EUR and 180 days – 380 EUR. Government sources said that at present drivers of cars and other light vehicles with foreign license plates are the only ones who do not pay road tax. It is proposed that the money raised will be used for repair and maintenance of national roads.23

23

Source: Unimedia





Toll roads will open a new legal challenge, with the first of all the network being defined properly, secondly with full implementation of the relevant EU Directive (especially ensuring non-discrimination) as well as instigating legislation to exclude tolled sections from the user charge. However, it may be that, in this case, the category of vehicles that would generate the highest revenue for the toll operator chooses to use alternative roads to the extent possible. The existence of such a road network is not a given at this moment24, but its development will of necessity require the provision of alternative infrastructure in order to provide at least access to properties (including settlements) adjacent to the road that is being tolled. In many countries (Ukraine, Russia for example), the road law explicitly provides for such an alternative to be provided. The Moldovan law does not provide for such requirement explicitly25, but given the fact that even at the highest level of road there are villages that have direct access to the road, implicitly there is a requirement to ensure that access to these localities is provided year around at a reasonable standard. It is highly likely that residents of settlements currently provided with direct access to candidate roads for tolling would object to losing this access at the expense of substantially more travel time26. The diversion of traffic from toll roads to other roads, which may also take place, has a potential negative effect on traffic safety. The potential candidates for toll roads that are considered are those that are crossing few built up areas and are most likely to also be among the safest in terms of potential conflicts between vehicles and pedestrians, especially children. The diversion of traffic away from those relatively safe roads would create potentially an increased number of traffic victims. This would then perhaps support achieving the aims of one strategy at the expense of another one. 3.18.5. Public Finance, Accounting and PPP PPP modalities vary mainly in (i) risk transfer to the private sector, (ii) the investment by each party and (iii) the control and ownership of assets (including whether during the concession period or ultimately at transfer). There are a substantial number of studies that have been carried out on the benefits and caveats of PPP. An important document is the IMF study ¨Public Private Partnership27¨, which has assessed several aspects of PPP and significantly dealt with the aspect of risk transfer and how this affects the assessment of the viability of the PPP. The paper summarises this as follows:

¨Risk transfer from the government to the private sector has a significant influence on whether a PPP is a more efficient and cost-effective alternative to public investment and government provision of services. This is clearly something the government should consider in deciding whether to embark upon a PPP and in negotiating the terms of a PPP contract. It should also be a focus of those seeking to assess whether a PPP will indeed yield the benefits that are claimed for it, and in particular whether it is being favoured mainly to move public investment off budget. Risk transfer is also relevant to determining the proper accounting and reporting treatment of PPPs risk transfer is a self-contained topic that can usefully be discussed prior to addressing accounting and reporting issues.¨

24

The assumption is made that any future toll road, for the purpose of achieving the time saving that would be required to justify the toll, would be a full scale lane separated highway with elevated intersections. 25

The Constitution of the Republic of Moldova provides in Article 27 that: The Right to Free Movement (1) the right to move freely within the boundaries of one's native country is guaranteed. Most likely, failure to provide for a toll free alternative to a toll road would be seen as a breach of someone’s constitutional right to freedom of movement and this could render the entire scheme illegal. 26

The option of providing these users free access to the toll road could be considered, though it most likely would be illegal under anti-discrimination legislation. 27

International Monetary Fund, Fiscal Affairs Department, Public Private Partnerships, 12 March 2004.





The paper, as well as other research indicated that the more (operational) risk is transferred to the concession holder, the higher the risk premium that will be demanded by the concession holder. In the specific case of road concessions, the traffic forecast, which is key to the economics of any project, will affect the risk premium. International Public Sector Accounting Standards (IPSAS) require the risk to be substantially transferred to a third party in order for the PPP not to qualify as a contingent liability that must be recorded as a memorandum item in the financial statement of the Government and may affect the borrowing capacity of the country, as some contingent liabilities may count as external debt. Furthermore, various studies, such as one carried out by UNISON, a British Public Sector Union, which also quotes the British Treasury; highlight the need for risk transfer as one of the most important aspects of PPP. As there will be a premium for the private sector to take on the risk of constructing and operating a road, the investor will like to see a premium to cover this risk as this also provides the possibility of a genuine transfer of risk, which is required by the IMF’s GFS (Government Finance Statistics) 2001 in order to ensure that the investment financing does not stay on the books as an implicit liability for the Government28. 3.18.6. Potential PPP Variants in Moldova Two principal payment options are explored for PPP candidate projects in Moldova. These are: Road user payments, traditionally under a concession model, characterized by the direct link between the private partner and the final user; the private partner provides a service to the public, "in place of", though under the control of, the public partner. The concessionaire is allowed to charge the general public Service Fees for using the facility, generally through paying a toll. The toll reimburses the Concessionaire for the cost of building and operating the facility which can revert back to the public sector at the end of the concession period. The concession model is the traditional PPP method for public service provision and is important as being a tried and tested PPP model. Availability-based payments, the private partner providing and administering infrastructure for the public authority. In this model, the remuneration for the private partner does not take the form of charges paid by the users of the works or of the service, but of regular payments by the public partner based on the level of service provided. These payments may be fixed or variable, e.g. availability payments for the highway infrastructure, or based on level of use (e.g. shadow tolls). This model is relatively recent and embodies the notion of the private sector providing a defined level of service to the public sector (Private Finance Initiative (PFI) program in the UK is a well-known example of an availability-based PPP program). Initial Assessment. The Consultant has carried out a rough assessment of the general feasibility of the most promising toll road projects and/or other forms of private concessions, using tools such as the World Bank Toolkit for PPPs in Roads and Highways.

28

General Public Sector Accounting standard which determines for example event recognition, requires an liability to be recognized when there is certainty that the liability exists AND when the cost of the liability can be established with certainty. Government Finance Statistics Manual 2001 requires Governments to account as Memorandum items for potential liability that cannot be quantified or are not certain, for example arising from the provision of Government Credit Guaranties to in this case, Concession holders. Though these do not meet the recognition criteria, they may affect materially the future financial position of the Government and therefore shall be recognized in the Government Financial Statement.





Figure 3.15. PPP Options

Source: World Bank Toolkit for PPPs in Roads and Highways

The shadow tolling option was dropped as a realistic option for Moldova at present because of its mixed experience internationally, notably in the UK where costs to Government proved significantly higher than anticipated. It is then necessary to define the priority projects where the government envisages soliciting private investors financing of the total or partial cost of the project. In the case of Moldova two potential projects have been initially identified. These are:

R1. Chisinau to Straseni

R2. Chisinau to Anenii-Noi (R30 junction) Table 3.13. Screened Projects for PPP

2012 2022 2032

1 R1 Republican M21 junction Chisinau R20 junction Calarasi 42 7354 12326 17219

2 R2 Republican South East side Chisinau R30 junction Anenii-Noi 28 8490 14230 19879 56.00

Investment Cost

(Mio. EUR)

84.00

AADT Nr. Road Name Road Class Starting point Location Ending point Location Length,km


The Consultant has preliminarily evaluated the technical, legal, economic and financial aspects of both candidate PPP projects. 3.18.7. Technical and Legal Requirements The proposed toll roads are expected to comprise divided four lane roads with broad cost estimates of 2 million EUR per km. The existing carriageway in both projects would form the alternative route which will be used for local transportation and by vehicles which are not allowed to use the PPP road (bicycles, animal carts etc.). The existence of this alternative road will affect usage of the toll road, being attractive to those users either unwilling to pay tolls or putting little value on the time savings offered by the PPP road. In the case of R2 the existing railway track is less than 1 km distant and there may be a case for some travellers using the train to reach Chisinau Airport. 3.18.8. Economic and Financial Assessment Preliminary economic and financial assessments for both investment projects have been carried out. The estimated average traffic for these two projects are:





R1. Average AADT 12,326 vehicles per day. Length of the proposed project 42 km.

R2. Average AADT 14,230 vehicles per day. Length of the proposed project 28 km. Both projects suggest a reasonable economic case for upgrading to four lane roads as a result of the initial assessment. However, the case for financial viability, essential for a toll road project involving the private sector, cannot be made at present. From a financial viewpoint the two projects currently show the following weaknesses:

Relatively high capital costs (2 mil EUR/km);

Relatively low existing traffic flows for four-lane roads;

Inherent uncertainty of traffic forecasting;

Potential diversion to alternative non-tolled routes, including railway in the case of R2;

Anticipated low willingness to pay tolls in Moldova where incomes are low in international terms.

3.18.9. Conclusions In summary, the existing case for Public Private Partnership arrangements in Moldova with the aim to finance the construction / reconstruction of road infrastructure can be summarised as:

The requirement to limit accesses and provide alternative routes for non-toll traffic are met in candidate projects R1 and R2;

There is, however, not a current financial case for PPP due to high tariffs relative to income levels in Moldova, relatively high costs and low traffic levels, the uncertainty of traffic forecasts and the potential development of other modes;

It is recommended to review the potential for PPP projects in the road sector in approximately 2020.





4. ENERGY EFFICIENCY AND CLIMATE CHANGE 4.1. Introduction According to the ToR one of the overall objectives of the consulting assignment is to identify issues and problems associated with energy efficiency and climate change matters in the Transport Sector that are relevant to trade facilitation. By following this statement, the objective of this chapter is first of all to ensure that the effects of climate change are taken into account in the overall assessment and secondly to analyse the potential for reduction or limitation of greenhouse gas (GHG) emissions from the transport sector. Taking into account future growth rates that are anticipated in this sector, this objective can only be achieved by better energy efficiency. The transport sector contributes to climate change through emission of GHG, mainly carbon dioxide (CO2). On the other hand the transport sector not only contributes to climate change, it is also heavily impacted by climate change. Future planning and design of transport facilities need to take this into consideration by means of suitable adaptations pertaining to all stages of project implementation, including design, construction and operation. This chapter discusses and analyses the issue by following the methodologies as currently developed by various funding institutions e.g. the German KfW (Kreditanstalt für Wiederaufbau)29. Concerning future adaptations an important aspect refers to the vulnerability of the project region, in this case Moldova, and its transport system and facilities to climate change. Following above description the chapter is structured into the following four items:

Vulnerability of project region (Moldova) and its transport system to climate change;

Future potential for emission reduction of Green House Gases (GHG) in the transport sector by means of better energy efficiency;

Future potential for increasing carbon absorption by means of changing land use patterns (e.g. increased reforestation) followed by reduction of net emissions of GHG;

Possible adaptations of transport system and transport facilities to climate change. 4.2. Vulnerability of Project Region (Moldova) and its Transport System to Climate Change The two diagrams below are drawn from the World Bank Climate Change Portal30 and show average monthly rainfall and temperatures in Moldova for the time periods 1960 to 1990 and 1990 to 2007. Differences that can be distinguished refer to less severe winter temperatures and lower average precipitation values, which during the summer months results in a higher tendency to droughts when looking on the time period 1990-2007 as compared to the time period 1960-1990. Considering that the Moldovan economy is to a large extent based on agriculture it is assumed that in this respect there is a high vulnerability to climate change especially when considering the possible occurrence of droughts in the future.

29

KfW Entwicklungsbank (03.2011): Beispielhafte Ergänzungen zu Terms of Reference: Klimaaspekte einer Machbarkeitsstudie im Themenfeld Wasserver- / Abwasserentsorgung. Additional Elements re Climate Change for Terms of Reference – Feasibility Study (Draft). 30

http://sdwebx.worldbank.org/climateportal/





Figure 4.1. Rainfall and Temperature in Moldova 1960-1990

Figure 4.2. Rainfall and Temperature in Moldova 1990-2007

The general consensus is also that even though summer average precipitation tends to be lower, there is high probability for more heavy single precipitation events in the future. This poses additional threats to agriculture due to top soil loss through erosion processes. For the transport system the consequences are manifold. Because of high deforestation rates in the past surface runoff is already increased. Future increase of single heavy precipitation events poses threats to drainage structures of transport systems, especially culverts, bridges, drainage ditches and discharge facilities of roads and railways. In addition in flood prone areas (e. g. floodplain of River Prut) the risk that transport infrastructure is flooded increases.





Taking into consideration these factors (high deforestation rates in the past and probable increase of heavy precipitation events in the future) the vulnerability of the countries transport system is also assessed as high, this refers particularly to road and rail, but also to transport by ship. 4.3. Future Potential for Emission Reduction of Green House Gases (GHG) in the Transport Sector by Means of Better Energy Efficiency In recent years, GHG emissions have grown substantially, despite increases in energy efficiency. These increases are evident all around the world and the issue of climate change has become a pressing issue as “people all over the globe feel and notice extreme climatic and weather changes that are affecting global economies, general ecology, geologic stabilities and practically the way of life.”31 Greenhouse gases exist naturally in the earth’s atmosphere and their presence allows the earth to remain warm enough to support life. The problem of global warming is resulting from the additional GHG concentrations brought into the atmosphere by human activities. According to the IPCC (Intergovernmental Panel on Climate Change) the global atmospheric concentration of CO2 and other GHG has increased markedly since 1750 and now far exceed pre-industrial values. For example, the concentration of CO2, rose from 280 parts per million (ppm) in 1750 to 380 ppm in 2005. For explanation of climate change scientists have identified two primary drivers that are, first, the increase in GHG emissions, due to combustion of fossil fuels and other human activities and, second, the decrease in carbon absorption that results from deforestation and other land clearing. Consequently, there are two possibilities for reduction of net emissions of GHG emissions. One option is to reduce the overall emission rate; the other option is to increase the potential for absorption of CO2 by suitable measures, e. g. reforestation. Under this headline the first option is discussed, the latter one (increasing of absorption rates) is discussed below. Each GHG has a greenhouse potential to be expressed in carbon dioxide equivalents. The greenhouse equivalent for carbon dioxide meets 1. Methane gas has 21, nitrous oxide has 310. Carbon dioxide occurs during combustion of fossil fuel (mineral oil, natural gas, coal) and is the most relevant GHG emission resulting from transport systems. In order, the most abundant GHG in the atmosphere are water vapour, carbon dioxide, methane, nitrous oxide and ozone. Concerning the emissions from transport systems, more or less only emission of carbon dioxide (CO2) is relevant, except for air traffic. Relevant emissions from air traffic also include nitrous oxides (NOx) which contributes to atmospheric warming by means of ozone (O3) generation and emission of water vapour that results in increased clouding. In principal there are two options to reduce GHG emissions in transport systems. One refers to emission reduction as a result of technological innovations. The other one refers to possible future shifting from high to low emission transport systems, meaning from private to public transport and from road transport to transport by train or ship. Emission reduction as a result of technological innovations has very high potential. In Europe in recent decades, the volume of road travel has greatly increased, while the emission of harmful air pollutants has been cut. Technological innovations have made this progress possible as

31

Samuel E. Sapuay (2009): Construction Environmental Monitoring of Transport Projects and its Relevance to Climate Change. Proceedings of the 17

th Annual Conference of the Transportation Science Society of the Philippines (2009).





“today’s vehicles are more fuel efficient and employ far more sophisticated emissions-control technologies than those on the roads in the 1970s”32. Examples of existing and emerging technologies that may help to reduce GHG emission further in the future comprise Gas/Electric Hybrid engines, Plug In Hybrids, Biofuel Engines and others. A suitable legislative framework provides the necessary incentives to develop these technological innovations and to make them competitive. This applies to all transport systems (road, train, ship and air transport). For the purpose of cutting down its GHG emission rates from the transport sector in Moldova it is proposed that the country orientate itself towards the pertinent legislative framework and guidelines of the European Union, taking into consideration economic constraints. 4.4. Future Potential for Increasing Carbon Absorption by Means of Changing Land Use Patterns Followed by a Reduction of Net Emissions of GHG Forests are considered as “carbon sinks” because they naturally absorb large quantities of CO2 through the process of photosynthesis. Deforestation in the past, mainly for the purpose of conversion of forest area to agricultural used land has led to the present land use pattern of Moldova in which forest cover in the whole country accounts only for about 325,400 ha. This area is highly fragmented into about 800 forest compartments that range from 5 to 1,500 ha. In relative terms forest covers approximately 9.6% of the Moldovan territory. “Most of the forests (58%) are located in the central part of the country, where they make up for about 13% of the land cover. The northern and southern regions are comparably poor in forest with 25% (cover degree around 7%) and 17% (cover degree 6.7%) of the total forests respectively.”33 34 The cited figures indicate the high potential for reforestation measures in the country. Reforestation measures are suitable for carbon absorption and thus for reduction of net emissions of GHG. For integrating such measures into transport infrastructure projects aiming at either new development or reconstruction of existing facilities, it is necessary to develop a pertinent legal approval framework that directly addresses climate change. Although Moldova has its relatively well-developed legal and institutional framework for Environmental Assessment (EA) which is also in line with the existing WB EA rules and procedures as well as with the relevant EU EIA Directives there are still no requirements for climate proving of projects. It is proposed that aspects of climate proving should be incorporated into environmental approval procedures as this is currently under preparation in the environmental safeguard requirements of various funding institutions, e. g. the German KfW35 or the World Bank. 4.5. Possible Adaptations of Transport System and Transport Facilities to Climate Change As described above the vulnerability of Moldova’s transport system to climate change phenomena is considered as high. Main hazards are expected to occur as a result of increase of

32

AASHTO (2008): Primer on Transportation and Climate Change (April 2008). American Association of State Highway and Transportation Officials 33

Ministry of Environment and Territorial Development (2000): First National Communication of the Republic of Moldova under the UN Framework Convention on Climate Change. 34

Kocks Consult GmbH (2010): Environmental Baseline Report for the Road Sector Program Support Project of Moldova. 35

KfW Entwicklungsbank (03.2011): Beispielhafte Ergänzungen zu Terms of Reference: Klimaaspekte einer Machbarkeitsstudie im Themenfeld Wasserver- / Abwasserentsorgung. Additional Elements re Climate Change for Terms of Reference – Feasibility Study (Draft).





single heavy precipitation events which will result in increased surface water runoff and increase of flooding of the country’s major rivers and creeks. Instability of slopes due to increased surface runoff and erosion on inclined surfaces is another major issue. This is of particular importance as Moldova’s soils are to a large extend quaternary loess sediments and highly susceptible to land sliding and erosion. Consequences for the future development of Moldova’s transport system refer to the design, construction and operational stages of future infrastructure developments. During the design stage major issues are the needs for investigating design variants when traversing alongside or crossing major rivers or streams, e. g. River Prut. Possible adaptations to be investigated in design phase refer to alignment shifting of road or rail, giving respect to anticipated future flooding areas and instability of slopes due to increased surface runoff and erosion on inclined surfaces. Possible adaptations are enhancement of embankments to protect against flooding, widening of culverts and bridges to avoid backwater and slope protection measures. As a result the issue “investigation of alternatives”, especially with regard to climate change hazards should be implemented as a compulsory requirement in the design and approval process of any transport infrastructure project, either referring to new construction or reconstruction of existing facilities. Referring to the construction and operational phases of the project monitoring of compliance should be a standard requirement to ensure sustainable implementation of the measures addressing climate change issues. REFERENCES: KfW Entwicklungsbank (03.2011): Beispielhafte Ergänzungen zu Terms of Reference: Klimaaspekte einer Machbarkeitsstudie im Themenfeld Wasserver- / Abwasserentsorgung. Additional Elements re Climate Change for Terms of Reference – Feasibility Study (Draft). http://sdwebx.worldbank.org/climateportal/ Samuel E. Sapuay (2009): Construction Environmental Monitoring of Transport Projects and its Relevance to Climate Change. Proceedings of the 17th Annual Conference of the Transportation Science Society of the Philippines (2009). AASHTO (2008): Primer on Transportation and Climate Change (April 2008). American Association of State Highway and Transportation Officials Ministry of Environment and Territorial Development (2000): First National Communication of the Republic of Moldova under the UN Framework Convention on Climate Change. Kocks Consult GmbH (2010): Environmental Baseline Report for the Road Sector Program Support Project of Moldova.

KfW Entwicklungsbank (03.2011): Beispielhafte Ergänzungen zu Terms of Reference: Klimaaspekte einer Machbarkeitsstudie im Themenfeld Wasserver- / Abwasserentsorgung. Additional Elements re Climate Change for Terms of Reference – Feasibility Study (Draft).





Key Considerations for the Road sector

1. Minimize the total road transport costs to society in a sustainable manner.

o Continue implementation of Road Maintenance Reform Technical assistance to SRA Department and Ministry Development of Road management system,

Continuation of data collection in the areas of road condition, accident locations, and traffic volumes

Including development of Road Management system linked to Geographic Information System (liner referenced)

Address the lack of updated road construction standards in line with and related to Functional classification.

2. Ensure that all the roads in the Core National Road Network are in maintainable condition

in 2022 and other National Roads in year 2027; 3. Provide year around access to all roads from all localities in the country; 4. Reduce the number of road accident fatalities by 50% by 2020.

APPENDIX I-A

Automatic Traffic Counts for 2009-2011

APPENDIX I-A. AUTOMATIC TRAFFIC COUNTS FOR 2009 - 2011

1 105 M1(Chişinău - Leuşeni - border with România) 58 clasification by categories Bursuc 1537 1572 1728 2002 2063 2268 2388 2506 2512 2339 2328 1789 2086

2 104 M2(Chisinau - Soroca - border with Ucraina) 33 clasification by categories Peresecina 9157 9653 9994 12916 11704 12821 13184 16375 12831 12579 11609 8710 11794

3 109 M2(Chisinau - Soroca - border with Ucraina) 84 clasification by categories Negureni 1686 1778 1892 2620 2174 2357 2433 2771 2706 2434 2140 1665 2221

4 203 M3(Chişinău - Cimişlia - Vulcăneşti - Giurgiuleşti - border with România) 109 clasification by speed Beşalma 1724 1752 1864 2223 1995 2122 2275 2471 2352 2221 2064 1561 2052

5 302 M14(Brest - Briceni - Chişinău - Tiraspol - Odesa) 706 totalizator Recea 3283 3425 3678 4660 4091 4359 2190 5466 4979 4872 4443 3591 4086

6 301 M14(Brest - Briceni - Chişinău - Tiraspol - Odesa) 714 totalizator Corlăteni 5516 5259 5481 6915 6152 6669 5887 7476 7046 6889 6430 5522 6270

7 101 R1(Chişinău - Ungheni - Sculeni - border with România) 12 clasification by categories Cojuşna 7474 7856 8096 9756 9607 10022 10281 11323 10644 10075 8740 7717 9299

8 201 R1(Chisinau - Ungheni - Sculeni - border with Romania) 27 clasification by speed Pănăşăşti 5147 5191 5425 6931 6472 6656 6933 7886 7081 6772 6134 5298 6327

9 103 R2( Chisinau - Bender ) 23 clasification by categories Cetrosu 6988 7562 8065 9350 9044 9672 10736 11527 9996 9723 9109 7442 9101

10 102 R3(Chişinău – Hînceşi – Cimişlia – Basarabeasca) 23 clasification by categories Pojăreni 4583 4610 4864 5474 5687 5940 6373 7335 6479 6189 5757 4310 5633

11 106 R3(Chisinau - Hincesti - Cimislia - Basarabeasca) 48 clasification by categories Gura Galbenei 1537 1669 1726 2257 2069 2197 2281 2570 2258 2108 1914 1542 2011

12 204 R14(Bălţi - Sărăteni - M2) 50 clasification by speed Băneşti 3900 4121 4241 5365 4759 5043 5325 6051 5419 5110 4979 4056 4864

13 107 R30(Anenii Noi - Căuşeni - Ştefan Vodă - border with Ucraina) 81 clasification by categories Olăneşti 1235 1340 1491 1767 1754 2110 2984 3687 2106 1973 1754 1360 1963

14 108 R34(Hînceşti - Leova - Cahul - Slobozia Mare) 85 clasification by categories Ţiganca 1339 1419 1514 1767 1703 1766 1876 1974 1864 1859 1727 1336 1679

15 303 R34(Hînceşti - Leova - Cahul - Slobozia Mare) 17 totalizator Sărata Galbenă 1541 1553 1701 2128 1928 2043 2190 2203 2183 2044 1893 1819 1936

3776 3917 3860 4758 4747 5070 5156 6108 5364 5146 4735 3848Monthly average daily traffic on main directions of Moldova road networkJa

nuar

y

Obtained data Locality

Loca

tion,

km

concerning comparison of road traffic intensity for 2009Information

Average Annual Daily

Traffic AADT

Apr

ilPost

Febr

uary

June

July

Aug

ust

Sept

embe

r

Nr. Name of road

Mar

ch

May

2009

Oct

ober

Nov

embe

r

Dec

embe

r








7 101 R1(Chişinău – Ungheni – Sculeni – hotar România) 12 clasification by categories Cojuşna 6421 7316 8221 10010 9789 10002 10773 11339 10858 10475 9952 8339 9458

8 201 R1(Chisinau - Ungheni - Sculeni - hotar Romania) 27 clasification by speed Pănăşăşti 4995 4880 5533 7010 6541 6540 6925 8182 7315 7083 6579 5449 6419








3330 3495 4169 5311 4744 4917 5402 6009 5443 5322 5058 4069

Nr. Post Name of road

Loca

tion,

km

Obtained data Locality

2010

Aug

ust

June

July

Janu

ary

Febr

uary

Mar

ch

Apr

il

Informationconcerning comparison of road traffic intensity for 2010

Monthly average daily traffic on main directions of Moldova road network


Traffic AADTSe

ptem

ber

Oct

ober

Nov

embe

r

Dec

embe

r

May








8 201 R1(Chisinau - Ungheni - Sculeni - border with Romania) 27 clasification by speed Pănăşăşti 5324 5041 5344 6529 7087 6647 7188 8337 7468 7020 6558 5467 6501

7 101 R1(Chişinău - Ungheni - Sculeni - border with România) 12 clasification by categories Cojuşna 7824 7708 8294 9661 10481 10148 10799 12121 11073 10427 9489 8008 9669








3781 3684 4026 4766 5127 5000 5499 6296 5592 5296 5031 4160

Obtained data LocalityNr. Post Name of road

Loca

tion,

km

Oct

ober

2011

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June

Informationconcerning comparison of road traffic intensity for 2011

Monthly average daily traffic on main directions of Moldova road network


Traffic AADTN

ovem

ber

Dec

embe

r

July

Aug

ust

Sept

embe

r


Posts for automatic census of road traffic intensity

Appreciated road sectors

APPENDIX I-B

Manual Traffic Counts for 2011

APPENDIX I-B. MANUAL TRAFFIC COUNTS FOR 2011

Nr. Road Km Object Note

State Road Administration responsible for

realizing the census

Total

1 M14 591 Border with Ukraine, "Criva" customs Briceni 11222 M14 627 Briceni t., roundabout south to the town Briceni 22143 R10 0 Ocniţa v., roads intersection R10, R11 Ocniţa 26224 R8 2 Otaci t., roads intersection R8, R12 Ocniţa 28085 R8 29 Donduşeni t., roundabout R8, R12 north to the town Donduşeni 36966 M14 663 Edineţ t., roundabout M14,R8 south to the town Edineţ 57777 R7 89 Şaptebani v., Road post of SA"Drumuri Rîşcani" Rîşcani 6418 R15 29 Glodeni t., Road Police Post north to the town Glodeni 24059 M14 695 Road Police Post, M14, R7 Rîşcani 2885

10 R7 42 Roads intersection R7, R12 west to the town Drochia 364411 R7 13 Roads intersection R7, M2 Soroca 229312 M2 146 Voloviţa v., Road Police Post south to the town Soroca 246113 R19 30 Sănătăuca v., bridge over Nistru river east to the town Sănătăuca 27714 M2 119 Gura Camencii v., Road Police Post, M2, R13 Floreşti 201815 R14 10 Road Police Post south to the town Bălţi 448416 M14 736 Road Police Post, M14, R16 Bălţi 78517 R16 24 Făleşti t., roundabout R16, R17 south to the town Făleşti 110018 R1 128 Border with România, "Sculeni" customs, R1, R16 Ungheni 243819 R14 34 Road Police Post west to the town Sîngerei 646320 R20 0 Road Police Post at intersection R20, R13 west to the town Rezina 368021 M2 71 Road Police Post, M2, R14 Teleneşti 455922 R1 101 Entrance in Ungheni t., Road Police Post east to the town Ungheni 244123 R1 44 Călăraşi t., Road Police Post east to the town Călăraş 500024 R20 41 Step-Soci v. Orhei 239425 M2 41 Road Police Post south to the town Orhei 856926 R20 50 SA"Drumuri Orhei" NW to the town Orhei 149627 M21 39 Roads intersection M21, R23 Criuleni 328928 M14 868 Budeşti v., Gas station Chişinău 222229 M14 856 Road bridge M14,M2 bridge Chişinău 266930 M2 11 Road Police Post, M2, R4 in the middle of junction Chişinău 1264931 M21 7 SA "Drumuri Chişinău" Chişinău 1339132 M1 11 Gas station gas station Chişinău 977833 R1 20 Străşeni t., Road Police Post south to the town Străşeni 1042634 R25 13 Micleuşeni v. Străşeni 347835 R25 37 Nisporeni t., exit to Bărboieni v. west to the town Nisporeni 179336 M1 64 Road point of SA"Drumuri Nisporeni" Nisporeni 267837 M1 91 Road Police Post, M1, R33 S to the junction Hînceşti 371638 R34 1 Exit from Hînceşti to Leova (gas station) SW to the town Hînceşti 755439 R3 17 s.Bardar,gas station Ialoveni 649140 R32 9 s.Puhoi,road point of SA"Drumuri Ialoveni" Ialoveni 93141 R2 35 Entrance in or.Anenii Noi, R2, R32 west to the town Anenii Noi 726042 R30 33 s.Căuşeni, roads junction R30, R26 north to the town Căuşeni 423443 R3 65 or.Cimişlia, Road Police Post north to the town Cimişlia 225944 M3 63 or.Cimişlia, exit to Comrat south to the town Cimişlia 190245 R34 59 SA"Drumuri Leova" south to the town Leova 100646 R34 82 or.Cantemir, Road Police Post north to the town Cantemir 109447 M3 82 Road Police Post north to the town Comrat 374748 R3 93 Entrance in Basarabeasca t. north to the town Basarabeasca 40049 R37 4 Exit from Ciadîr-Lunga to Comrat NW to the town Ciadîr-Lunga 325050 M3 134 Road post of SA "Drumuri Taraclia", M3, R38 W to junction Taraclia 73951 R34 128 Entrance in Cahul t., gas station north to the town Cahul 291552 R34.1 1 Border with România, "Cahul" customs Cahul 182053 M3 171 Entrance in Vulcăneşti t. east to the town Vulcăneşti 152954 M3 199 Road post of SA "Drumuri Vulcăneşti",Sl. Mare v. E to the junction Vulcăneşti 143155 R30 60 Gas station gas station at the junction Ştefan Vodă 558656 R30 91 Border with România, "Tudora" customs Ştefan Vodă 100057 R52 15 Border with România, "Palanca" customs Ştefan Vodă 1000

Informationconcerning traffic census for 2011

APPENDIX II

Vehicle and Transport Growth in Moldova


2004 2005 2006 2007 2008 2009 2010 2011 %Goods road motor vehicles 73,774 81,798 84,087 94,828 115,967 120,174 131,243 145,856

21.6%Buses and minibuses 19,741 19,825 21,056 21,095 21,491 21,346 21,395 21,320 3.2%Cars (including taxi) 269,551 292,994 319,311 338,944 366,351 386,365 404,290 420,462 62.1%Trailer and semi-trailer 36,929 40,379 43,909 46,903 49,583 51,917 54,127 56,088 8.3%

0.0%Other 32,937 4.9%Total 399,995 434,996 468,363 501,770 553,392 579,802 611,055 676,663 100.0%Source: National Bureau of Statistics, Moldova

2004 base 1.000 1.088 1.171 1.254 1.383 1.450 1.528 1.692 1.078Per annum growth 1.088 1.077 1.071 1.103 1.048 1.054 1.107 1.078

Car 1.000 1.087 1.185 1.257 1.359 1.433 1.500 1.560 1.066Bus 1.000 1.004 1.067 1.069 1.089 1.081 1.084 1.080 1.011Truck 1.000 1.104 1.156 1.280 1.495 1.555 1.674 1.824 1.090Total 1.000 1.088 1.171 1.254 1.383 1.450 1.528 1.692 1.078

GDP (bn MDL) 7.488 8.047 8.432 8.685 9.362 8.801 9.408 10.0671.075 1.126 1.160 1.250 1.175 1.256 1.344 1.0431.075 1.048 1.030 1.078 0.940 1.069 1.070 1.044

Source: IMF

Car/GDP growth 1.160Bus/GDP growth 0.803Truck/GDP growth 1.357Total/GDP growth 1.581

Population 3,607,000 3,600,000 3,590,000 3,581,110 3,572,703 3,567,512 3,563,695 3,560,430Cars/000 popn 74.7 81.4 88.9 94.6 102.5 108.3 113.4 118.1Vehs/000 popn 110.9 120.8 130.5 140.1 154.9 162.5 171.5 190.1

Imports2004 2005 2006 2007 2008 2009 2010

Total 1,768,533.9 2,292,291.6 2,693,183.7 3,689,524.4 4,898,762.0 3,278,269.8 3,855,288.61.296 1.523 2.086 2.770 1.854 2.180 1.1391.296 1.175 1.370 1.328 0.669 1.176 1.169

Exports2004 2005 2006 2007 2008 2009 2010

Total 985,173.6 1,090,918.5 1,050,361.7 1,340,050.4 1,591,113.1 1,282,980.7 1,541,486.61.107 1.066 1.360 1.615 1.302 1.565 1.0771.107 0.963 1.276 1.187 0.806 1.201 1.090

Imports/GDP growth 1.735Exports/GDP growth 1.245

Source: National Bureau of Statistics, Moldova

Turnover of goods, thousand tonnes-kilometers2004 2005 2006 2007 2008 2009 2010

Total 5,168,702 5,459,638 6,242,146 5,864,598 5,840,609 3,773,592 4,192,692Railway 3,005,916 3,052,900 3,673,193 3,120,183 2,872,707 1,058,184 958,244Road 2,161,454 2,405,269 2,567,079 2,742,495 2,965,925 2,713,703 3,232,428River 371 426 555 636 789 611 351Air 961 1,044 1,319 1,284 1,188 1,094 1,669

Road 1.113 1.188 1.269 1.372 1.255 1.495 1.0691.113 1.067 1.068 1.081 0.915 1.191 1.073

Goods ton-kms/GDP growth 1.190

Passengers turnover, thousand passenger-kilometers2004 2005 2006 2007 2008 2009 2010

Total 3,347,384 3,548,910 3,793,715 4,187,122 4,429,737 3,932,671 3,967,269Railway 346,058 355,015 471,428 468,175 485,577 422,793 398,857Buses 1,949,244 2,058,672 2,206,097 2,475,474 2,598,925 2,300,058 2,393,818River 419 330 205 238 210 237 238Air 365,141 439,655 480,949 549,601 637,453 603,830 750,770

Taxi 19,743 19,201 20,276 65,936 84,330 72,508 76,821Trolleybuses 666,779 676,036 614,759 627,697 623,241 533,244 346,766

Buses + Taxi 1,968,987 2,077,874 2,226,373 2,541,411 2,683,255 2,372,566 2,470,6391.055 1.131 1.291 1.363 1.205 1.255 1.0391.055 1.071 1.142 1.056 0.884 1.041 1.042

Trolleybuses 0.520

Passenger kms/GDP growth 0.999

Source: National Bureau of Statistics, Moldova

Road vehicles registered in the Republic of Moldova (end-year) by Types of road vehicles and Years

Kocks/Transcare/Universinj/Dec 2011

APPENDIX III

Road Safety Strategies

Appendix III. Road Safety Strategies Roll-over Accidents at Bends The apparent cause of these accidents is usually the driver entering the bend at excessive speed. The reason for this can be because the driver was wilfully traveling at a high speed, was paying insufficient attention or because he misjudged the severity of the bend. Such misjudgements can be caused because of the bend’s visual configuration, poor delineation or because it was unexpectedly sharp. Therefore for all bends below the desirable minimum standard, warning signs should be provided to give the driver an idea of the severity of the bend. This should ideally follow a standard whereby the most dangerous bends have the highest level of signing and marking. Hazardous bend signs placed in front of the bend inform the driver of how the horizontal road alignment changes. Edging the signs with fluorescent strips will improve conspicuity. Advisory information can be written on the road or placed on speed limit signs. The information should inform the driver of how severe the hazard is and provide readily understandable advice on how to navigate the hazard safely. Overtaking and Head-on Collisions Another major problem occurs when drivers sometimes ignore the no-overtaking enforcement. Where head-on accidents are a problem, double white lines should be enhanced. Since line markings are widely ignored in Moldova, more physical deterrents to crossing the centre line are required. A variety of traffic engineering devices have been developed that could be used in similar circumstances, from rumple strips (profiled line marking) to heavy duty road studs. Accidents at Entry and Exit of Villages and Municipalities The differential between the speed limits inside and outside a village can be large. If drivers have been traveling along rural roads subject to the national speed limit for an appreciable distance, they may not recognize the need for greater care and lower speeds. They may be unaware of a lower speed limit or of their own speed and may respond late to the lower limit. In particular they may be unaware of the increased risk of an accident, especially with a vulnerable road user. Speeds observed through villages are often high compared to what is appropriate for the conditions. Although village name signs together with speed limit signs have been conventionally used to mark the entry to a village these are largely ignored by the drivers. Other features within the village, respectively at the entrances, should be considered, if appropriate, to urge the driver to keep an appropriate speed. These may include reductions in road width, traffic islands and mini-roundabouts. Rehabilitation and Enforcement Unfortunately it is likely that accidents will increase as a result of road rehabilitation improvements as it will be much easier for drivers to travel at greater speeds. From the engineering point only limited possibilities exist to oppose this tendency to higher speeds, and police action to enforce speed limits is probably the only effective way to limit accidents. Safety Features to be considered in the Design The following work actions and items should be considered, where appropriate, in the detailed design phase of the project to enhance traffic safety:

Install and replace delineation; Install rumble strips; Install crash barriers; Replace deficient signing, as needed, using current standards; Separate traffic modes, i.e. provision of sidewalks; Install traffic islands and pedestrian refuges; Restore sight distance at public road junctions and the inside of curves through low

cost measures if they are available such as removal or relocation of signs and other obstructions, and cutting back of vegetation.

Safety and Miscellaneous Design Items In addition to the requirements on the road geometry, junction design, road furniture and markings, International Design Manuals include recommendations for safety and miscellaneous design items, which are considered in the design review of the project as follows:

Safety Rest Areas and Scenic Viewing Points;

Bus Lay-bys and Parking Bays/Lanes;

Public Utilities;

Safety Barriers;

Emergency Escape Ramps. Road Furniture and Markings Adequate road furniture and markings in conformity with international standards and/or improved project standards are included in the design to provide for the road users suitable:

Signalization

Orientation

Safety For appropriate guidance during the day and especially at night or during adverse weather conditions (e.g. rain, fog) road markings should be considered. Engineering Design Component for Road and Traffic Safety The main items of traffic safety which should be considered in engineering road/highway design can be summarized as follows: Road Geometry The requirements of geometric design standards on road cross section (width of carriageway + shoulders), the horizontal & vertical alignment and the junctions should be identified in detail as well as the route selection for the improved alignment and the resulting engineering design. Road Furniture and Road Markings Road furniture and road markings should be included in the designs and bidding documents respectively. Traffic Signs For signalization danger warning and regulatory signs (e.g. speed limit, curve warning, give way) should be considered as well as standard 1.6m x 1.5m destination signs according to international practice. In order to provide an optimum signalization and orientation during darkness all road signs should be specified to be retro-reflective.

It is recommended that Moldova accede and fully implement the UN Convention on Road Signs and Signals (Vienna, 1968). Road Markings For the centreline and other markings, which are often crossed by vehicles (e.g. at lay-bys or junctions), thermoplastic material should be specified, which has a long service life and reduces maintenance requirements. All other markings, which are usually not crossed by vehicles, should be provided in ‘ordinary’ road marking paint due to economic reasons. All road markings will be specified with surface reflectorisation by the application of ballotini beads. Kilometre and Guide Posts The kilometre and guide posts should be upgraded as part of road rehabilitation/upgrading. Guard Rails Galvanized steel guard rails should be considered at high embankments, at bridge approaches, etc. They should exclusively be installed with bevelled/buried end sections, because these provide higher safety than the ordinary end pieces. Populated Areas Speed Calming System (SCS) A major concern is the high speed of vehicles entering or passing through sensitive areas. Consequently, an appropriate Speed Calming System (SCS) should be developed to increase road safety. Pedestrian Walkways Where the site conditions (space) allow, pedestrian walkways should be considered which are separated from moving or stopping traffic (carriageway or parking bay/lanes) by a kerbstone for the best possible safety of pedestrians and their convenience as well.

APPENDIX IV

Draft Government Decision for Maintenance Reform

Draft GOVERNMENT OF THE REPUBLIC OF MOLDOVA

DECISION #._______

of___________________2012 Chisinau

On reform of the road maintenance system

In order to ensure realization of the provisions of the Land Transport Infrastructure Strategy for 2008-2017, approved by the Government Decision #85 of 01.02.2008 (Official Gazette of the Republic of Moldova, 2008, #30-31, article 159), and Finance Contract between Republic of Moldova and the European Investment Bank ratified by the Law #79-XVI of 21.04.2011 (Official Gazette of the Republic of Moldova, 2011, #82, art. 210), and Loan Agreement between Republic of Moldova and European Bank for Reconstruction and Development ratified by Law #77-XVI of 21.04.2011 (Official Gazette of the Republic of Moldova, 2011, #82, art. 208); according to the provisions of article 69 of Civil Code of the Republic of Moldova #1107-XV of 06.06.2002 (Official Gazette of the Republic of Moldova, 2002, #82-86, art. 661), Law on State Enterprise, #146 of 16.06.1994, (Official Gazette of the Republic of Moldova, 1994, # 2, art. 9), Law on joint stock companies #1134 of 02.04.1997 (Official Gazette of the Republic of Moldova, 2008, # 1-4, art. 1), Government DECIDES:

1. Ministry of Transport and Road Infrastructure shall initiate the process of

reform of the road maintenance system, reducing the number of specialized road maintenance companies from 38 to 12 units, according to annex #1, applying the legal procedures of fusion by absorption.

2. Executive Committee of the UTA Gagauzia is recommended to support the reorganization of the road maintenance companies under their administration.

3. Handing of the absorbed companies assets to the absorbing companies will be performed according to the Regulations on procedure of handing of the enterprises, organizations, state institutions, their subdivisions, buildings, structures, assets, approved by the Government Decision #688 of 09.10.1995 (Official Gazette of the Republic of Moldova, 1996, #10, art. 45), with subsequent amendments.

4. To exclude from the annex #2 of the Government Decision #945 of 20.08.2007 ”on measures for realization of the Law #121-XVI of 04.05.2007 on administration and privatization of the public property” (Official Gazette of the Republic of Moldova, 2007, # 131-135, art. 981) paragraphs: 123-125, 127-142, 144-147, 149-152, 154-158.

5. To approve the Action Plan on implementation of the public road

maintenance system reform (annex 2).

6. Ministry of Transport and Road Infrastructure, half-yearly shall inform the Government upon realization of the provisions of the Action Plan on implementation of the public road management system reform.

7. Ministry of Transport and Road Infrastructure shall be responsible for control over the execution of this Decision.

PRIME-MINISTER Vladimir FILAT Countersigned: Viceprime-minister, Minister of economy Valeriu Lazar Minister of finance Veaceslav Negru ţa Minister of Transport and Road Infrastructure Anatolie Şalaru

Annex No.1 of the Government Decision

No.______ of ____________2012

List of the enterprises for road maintenance reorganized by fusion

*In accordance with the proposal of Executive Comitte UTA Gagauzia

No.

Absorbing enterprises

Lenght of the roads for

maintenance, km

Absorbed enterprises

1. JSC. „Drumuri Edineț” 1069 JSC. „Drumuri Dondușeni” , JSC. „Drumuri Ocnița”

2. JSC. „Drumuri Rîșcani” 784 JSC. . „Drumuri Drochia” , JSC. „Drumuri Glodeni” 3. JSC. „Drumuri Soroca” 953 JSC. „Drumuri Florești” , SE „Drumuri Sănătăuca” , JSC. „Drumuri Șoldănești” 4. JSC. „Drumuri Bălți” 783 JSC. „Drumuri Fălești” , JSC. „Drumuri Sîngerei” 5. JSC. „Drumuri Orhei” 791 JSC. „Drumuri Rezina” , JSC. „Drumuri Telenești” 6. JSC. „Drumuri Strășeni” 877 JSC. „Drumuri Călărași” , JSC. „Drumuri Ungheni” 7. JSC. „Drumuri Criuleni” 698 JSC. „Drumuri Anenii Noi” , JSC. „Drumuri Chișinău” , SE „Drumuri

Dubăsari” 8. JSC. „Drumuri Ialoveni” 848 JSC. „Drumuri Hîncești” , JSC. „Drumuri Nisporeni” 9. JSC. „Drumuri Căușeni” 682 JSC. „Drumuri Căinari” , JSC. „Drumuri Ștefan Vodă” 10. JSC. „DrumuriCimișlia” 573 SE „Drumuri Basarabeasca” , JSC. „Drumuri Leova” 11. JSC. „Drumuri Cahul” 864 JSC. „Drumuri Cantemir” , JSC. „Drumuri Taraclia” 12. *JSC. „Drumuri Comrat” 420 * JSC. „Drumuri Ciadîr Lunga” , * JSC. „Drumuri Vulcănești”

Total 9344

Anenx #2 of the Government Decision______ of

_________________2012

Activities Responsible entity Period of realization

Monitoring indicators

1 Approval of decision on road maintenance reform. Ministry of Transport and Road Infrastructure

2012 Government Decision on road maintenance reform

2 Reorganization by fusion of the road maintenance joint stock companies and state enterprises and assignment of maintenance areas. Reducing by fusion from 38 to 12 joint stock companies.

Ministry of Transport and Road Infrastructure

2012 12 maintenance joint stock companies

3 Adjustment of the legal and regulatory framework and technical standards to the requirements of the new maintenance system: Classification of roads according to the level of service, identification and of the volumes and time frame for execution of the maintenance works depending on the level of service, drafting of the multiannual maintenance contracts.

Ministry of Transport and Road Infrastructure, State Road Administration

2012-2014 Legal and regulatory framework adjusted

Action Plan on implementation of the public road maintenance system reform



4 Implementation of the modern technologies for road maintenance and aquisition of necssary equipment (a) Increase the width of the snow cleaning path in each pass by equipping the truck with side plough. (b) Use salt only on roads with high traffic volumes. Fitting the trucks with additional special equipment for brine spreading. (c) Use the spray pothole patching instead the traditional premix pothole patching. This will reduce the costs by 30-50% and will increase the productivity. (d) Other small modifications and additions to the main equippment that will have significant impact on costs.


2012-2016 Modern technologies implemented

5 Implementation of the new road maintenance contracts adjusted to best international practice. Contracting the winter maintenance works based on number of weather ocasions (a) Implementaton of contracts based on unit cost. Use of these contracts first 3 years with the posibility to extend them for other 2 years after maintenace companies' capacity building. (b) gradual implementation of the performance based contracts. This type of contract will specify the level of service depending on road category.


2013-2017 Volume of the maintenance works procured in base of the new contracts adjusted to best international practice.

6 Tendering the road routine maintenance works. Prepare the road maintenance companies to compete with the private companies. Privatization of the road maintenance companies.


2014-2017 Volume of the tendered maintenance works. Number of privatized enterprises



7 Gradual implementation of the road and bridge management system and computerized accounting of the maintenance works.(a) Design of the road management system (RMS) and prepare of the terms of reference for necesary software aquisition. (b) Aquisition of the RMS software and necessary equipment for input data collecting necessary for road and bridge database. (c) Aquisition of the road weather information system. (d) Integration of the computerized accounting system and the road weather information system into the road management system.


2012-2016 Implemented RMS

8 Capacity and managerial building of the personnel involved in the road maintenance.Development and implementation of the sustainable training programm for the management and technical personnel.


2012-2016 Management and technical personnel trained.

APPENDIX V

Total Road Network Works Required 2012-32

Transport and Logistics Strategy Preparation for Moldova

Total Road Network, MoldovaWorks Required over 20 Year Horizon, Unconstrained Budget(000s €)

Road Class Surface Surface Length 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Total Rehab Period Total

Type Condition km

Magistral Concrete Good 16.2 2,644 2,644 2,644 8,095 16,028 8,095 7,933 16,028

Fair 48.8 7,973 24,409 7,973 40,356 24,409 15,947 40,356

Poor 135.2 22,090 67,622 22,090 22,090 133,891 67,622 66,270 133,891

Bad 48.8 24,409 7,973 7,973 7,973 48,329 24,409 23,920 48,329

AC Good 35.8 5,841 17,882 5,841 29,565 17,882 11,683 29,565

Fair 107.8 17,614 53,921 17,614 17,614 106,764 53,921 52,843 106,764

Poor 298.8 149,384 48,799 48,799 149,384 396,365 298,768 97,597 396,365

Bad 107.8 53,921 17,614 17,614 53,921 143,071 107,843 35,229 143,071

ST Good 1.2 36 36 596 36 36 739 596 143 739

Fair 3.6 108 108 1,796 108 108 108 2,335 1,796 539 2,335

Poor 10.0 299 4,977 299 299 299 4,977 11,148 9,953 1,194 11,148

Bad 3.6 1,796 108 108 108 1,796 3,916 3,593 323 3,916

Gravel Good 0.2 2 2 5 2 2 5 2 20 9 11 20

Fair 0.5 7 14 7 7 14 7 54 27 27 54

Poor 1.3 18 38 18 18 38 18 18 168 76 92 168

Bad 0.5 14 7 7 14 7 7 14 68 41 27 68

Routine Maintenance 819.9 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 3,509 70,186 1,003,003 0 0 0

619,038 313,778 932,817

Republican Concrete Good 2.5 407 407 407 1,246 2,467 1,246 1,221 2,467

Fair 7.5 1,227 3,756 1,227 6,210 3,756 2,454 6,210

Poor 20.8 3,399 10,407 3,399 3,399 20,605 10,407 10,198 20,605

Bad 7.5 3,756 1,227 1,227 1,227 7,438 3,756 3,681 7,438

AC Good 136.9 22,368 68,473 22,368 113,208 68,473 44,735 113,208

Fair 412.9 67,447 206,471 67,447 67,447 408,813 206,471 202,342 408,813

Poor 1,144.0 572,009 186,856 186,856 572,009 1,517,730 1,144,018 373,713 1,517,730

Bad 412.9 206,471 67,447 67,447 206,471 547,836 412,942 134,894 547,836

ST Good 7.9 237 237 3,947 237 237 4,894 3,947 947 4,894

Fair 23.8 714 714 11,901 714 714 714 15,471 11,901 3,570 15,471

Poor 65.9 1,978 32,970 1,978 1,978 1,978 32,970 73,852 65,939 7,913 73,852

Bad 23.8 11,901 714 714 714 11,901 25,943 23,801 2,142 25,943

Gravel Good 16.2 237 237 485 237 237 485 237 2,155 970 1,185 2,155

Fair 48.7 715 1,462 715 715 1,462 715 5,785 2,925 2,860 5,785

Poor 135.0 1,981 4,051 1,981 1,981 4,051 1,981 1,981 18,006 8,103 9,903 18,006

Bad 48.7 1,462 715 715 1,462 715 715 1,462 7,247 4,387 2,860 7,247

Routine Maintenance 2,515.3 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 10,766 215,311 2,992,971 0 0 0

1973040.819 804619.122 2,777,660

Local Concrete Good 0.0 0 0 0 0 0 0 0 0

Fair 8.9 863 2,143 863 3,869 2,143 1726 3,869

Poor 28.4 2748 6,823 2,748 2,748 15,067 6,823 8244 15,067

Bad 4.2 1,006 405 405 405 2,222 1,006 1,216 2,222

AC Good 0.0 0 0 0 0 0 0 0

Fair 510.2 49,316 119,038 49,316 49,316 266,985 119,038 147,947 266,985

Poor 1,624.3 378,994 157,012 378,994 914,999 757,988 157,012 914,999

Bad 239.5 55,891 23,155 55,891 23,155 158,091 111,782 46,310 158,091

ST Good 0.0 0 0 0 0 0 0 0 0

Fair 73.6 1,718 17,178 1,718 1,718 22,332 17,178 5,153 22,332

Poor 234.4 5,469 54,692 5,469 5,469 54,692 125,793 109,385 16,408 125,793

Bad 34.6 8,066 807 807 8,066 807 18,551 16,131 2,420 18,551

Gravel Good 0.0 0 0 0 0 0 0 0 0 0 0 0

Fair 583.7 8,562 17,512 8,562 8,562 17,512 8,562 69,271 35,025 34,246 69,271

Poor 1,858.5 27,258 55,756 27,258 27,258 55,756 27,258 27,258 247,804 111,512 136,292 247,804

Bad 274.1 8,222 4,020 4,020 8,222 4,020 4,020 8,222 40,747 16,445 24,302 40,747

Earth Good 0.0 0 0 0 0 0 0 0 0 0 0 0

Fair 110.1 1,615 3,304 1,615 1,615 3,304 1,615 13,070 6,608 6,462 13,070

Poor 350.7 5,143 10,520 5,143 5,143 10,520 5,143 5,143 46,755 21,040 25,716 46,755

Bad 51.7 1,551 758 758 1,551 758 758 1,551 7,688 4,654 3,034 7,688

Routine Maintenance 5,987.0 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 25,624 512,484 2,465,729 0 0 0

1336757.541 616487.1688 1,953,245

Major bridge repairs 3,522 3,522 3,522 0 3,522

Total 9,322.2 426,112 105,077 185,414 1,319,126 125,572 95,320 197,622 453,243 57,089 512,046 69,182 147,844 212,971 243,941 62,192 328,890 776,401 83,776 95,962 967,444 6,465,224.9

Key: rehabilitation 15,622periodic maint 2,644

Summary of The Consultant's road condition survey results

%National Good 6.5%

Fair 19.6%

Poor 54.3%

Bad 19.6%

100.0%

Local Good 0.0%

Fair 21.5% Sources: SRA

Poor 68.4% Consultant's road condition surveys

Bad 10.1% Moldova 2020100.0% LTIS, 2008

Kocks Consult/Transcare/Universinj/Aug 12

APPENDIX VI

European Transport Network Map Submitted to

Eastern Partnership Transport Panel

Appendix VI: European Transport Network Map Submitted to Eastern Partnership Transport Panel

Source: MoTRI

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