Transcript Moldova: Transport Sector Review Update

Moldova: Transport Sector
Review Update
With emphasis on the Road Sector
1
What triggered the paper?
• The request of the Government in 2001for a
Road Project supported by the Bank, as a
priority in Gov.’s development agenda
(therefore the paper’s emphasis on the road
sub-sector)
• The need for the Bank to renew its
knowledge of the sector, and start a
Transport policy dialogue
2
What is the background?
• Moldova – landlocked country, highly trade
dependent (over 90% of GDP), gateway between
FSU countries and the West
• Economy largely based on agriculture and agroindustry (over 30% of GDP)
• Access to regional markets is a strategic priority,
dependent on a well functioning transport industry
and a solid transport infrastructure
• Gov. made the first steps by joining WTO and the
Stability Pact for SEE in 2001
3
What are the findings?
• Transport sector has not been a priority for Gov., IFIs
• No National Transport Strategy covering all sub-sectors;
(proposed to be drafted within the WG 4 under PRSP)
• Low share of Transport in public expenditures: 2.3 % in
the annual budget; about 0.5 % of GDP
• Progress of reforms in the T sector is lagging behind,
including (i) defining a new role of the Gov, and (ii)
increasing private sector participation
• MOT civil servants have jobs in the private sector
• Railways reforms started with separation of services, plans
to eliminate cross-subsidies, commercialization
• Private entrepreneurship started in trucking; constraints in
access to international markets due to (i) low level of
professionalism, (ii) inadequate roads infrastructure
4
What are the findings (cont)?
• Road management has not been divested from MOT,
conflicting roles as policy maker, contractor, and
supervisor
• The construction industry only partly private
• Trade and transport suffer from corrupt practices of
Customs and other border agencies, lack of modern and
transparent border procedures
• Unclear rules of game in Civil Aviation: privatization
started, sustainability questionable
• Urban Transport in crisis in Chisinau: drastically declining
services & high budget constraints to the Municipality
5
Issues in Road Management
• Critical shortage of road maintenance funds
• 78% of the national roads and 88% of the local
roads have reached the end of their economic life
and are technically outdated > exponential
deterioration
• Inadequate road network conditions > high
transportation costs > reduced competitiveness
6
Evolution of Road Condition
%
50
45
40
35
30
25
20
15
10
5
0
1992
Good
1994
Fair
Poor
1996
1998
Extremely Poor
7
Road Density
Moldova
Ukraine
Romania
Poland
Germany
16
14
12
10
8
6
4
2
0
France
(km per 1000 population)
8
km per square km
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Moldova
Ukraine
Romania
Poland
Germany
France
Road Density
(km per square km)
9
Issues in Road Management
• Moldova loses between US$10-20 million/year by
not maintaining the roads
• Moldova spends 0.25% of GNP on roads
compared with an average of 1.2% in 36 countries
• Gov. lacks fiscal discipline on budget allocation
for road maintenance > “second generation” road
fund proposed by MOT
• Road safety management is an issue (high rate of
fatal accidents: 1120 deaths/mil rd veh
10
1.4
1.2
1
0.8
0.6
0.4
0.2
0
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R
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% of GDP
Maintenance Expenditure for National
Roads as percentage of GDP
11
Recommendations
• (i) maintenance, (ii) maintenance, (iii) maintenance,
particularly for the road sector
• On Railways: address the PSO problem; implement
restructuring of CFM; update legislation
• On Roads: create an autonomous and financially
independent Road Authority; increase maintenance budget;
create a modern mechanism for rd. financing; investigate
the cause for high accident causes
• A possible Bank financed operation in the road sector to
address the major issues identified by the Study
12
Next Steps
• Continue the sector dialogue with the Government
in support of defining its National Transport
Strategy
• Address the transport priorities in the context of
the up-coming PRSP
• Discuss the draft with the Government
• Disseminate the revised paper in the context of
PRSP WG 4 (infrastructure)
• Identify transport stakeholders for the
Participation & Consultation process of the PRSP
13