Identifier
Created
Classification
Origin
09CHISINAU556
2009-07-17 06:00:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Chisinau
Cable title:  

NO LIGHT AT THE END OF THE RAILROAD TUNNEL IN TRANSNISTRIA

Tags:  PBTS ELTN ETRD RS UP MD 
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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS SECTION 01 OF 02 CHISINAU 000556 

SENSITIVE

SIPDIS

STATE FOR EUR/UMB

E.O. 12958: N/A
TAGS: PBTS ELTN ETRD RS UP MD
SUBJECT: NO LIGHT AT THE END OF THE RAILROAD TUNNEL IN TRANSNISTRIA

Sensitive But Unclassified. Please Protect Accordingly.

UNCLAS SECTION 01 OF 02 CHISINAU 000556

SENSITIVE

SIPDIS

STATE FOR EUR/UMB

E.O. 12958: N/A
TAGS: PBTS ELTN ETRD RS UP MD
SUBJECT: NO LIGHT AT THE END OF THE RAILROAD TUNNEL IN TRANSNISTRIA

Sensitive But Unclassified. Please Protect Accordingly.


1. (SBU) Summary: In contrast to other, more successful working
groups between Chisinau and Transnistrian authorities, the newly
created Working Group on Railroads, which met for the first time on
July 7, has revealed the greatest difficulties: Transnistria wants
the railroads to resume service, for political and economic reasons,
but Chisinau does not recognize Transnistrian Railroads as a legal
entity. End Summary.

Railroads: Most Contentious of Working Groups
-------------- -


2. (SBU) The newly created Working Group on Railroads met on July 7,
2009 at the OSCE offices in Bender. As expected, Chisinau and
Tiraspol failed to make any progress in resolving the complex
problem of railroad transportation in the region, but agreed to meet
again in early September. While Tiraspol wants a resumption of
full-scale railroad transportation in the Transnistrian region,
Chisinau does not recognize Transnistrian Railroads as a legal
entity and maintains that the railroad lines and cars are still the
property of Moldova Railroads. Of all the various working groups
that have met to date, including roads, health, ecology and economy,
this meeting was by far the most contentious, a reflection of the
intractable nature of the problem underlying the discussions.


Confidence-Building Process Resumed
--------------


3. (SBU) This was the first meeting of the railroad working group,
though the same group of Chisinau and Tiraspol railroad operators
and transportation authorities had met once before in April 2008,
under the aegis of the European Union, to discuss railroad
transportation issues. In addition to the railroad specialists from
the two sides, the meeting was also attended by the mediators and
observers in the 5+2 format, i.e. OSCE, Russian Embassy, Ukrainian
Embassy, EU, and U.S. Embassy. The July meeting was the first out
of four meetings of confidence-building-measures working groups
proposed by Tiraspol, following informal 5+2 consultations in Vienna
on June 22. The other three working groups (on roads, health care
and ecology) are scheduled to meet on July 9, 13, and 15,
respectively.

Tiraspol's Three Demands

--------------


4. (SBU) After a brief exchange of opinions on whether this was the
first or the second meeting of the railroad working group (i.e.,
whether the meeting chaired by the EU should be counted as part of
the Working Group process),the sides presented their positions.
The Tiraspol delegation listed three issues for discussion: 1)
resumption of passenger transportation between Chisinau and Odessa,
Ukraine (through Bender and Tiraspol); 2) allowing shipment of cargo
to and from Tiraspol and Bender stations; and 3) resumption of
traffic on the Rybnitsa-Slobodka, Ukraine line. (Note: this line
is closed and not fully functional, but Ukrainian trains use it to
cross the border and ship scrap metal to the Rybnitsa Steel Plant.
End note.)

Tiraspol and Chisinau: Status Quo Vs Status Quo Ante
-------------- --------------


5. (SBU) The Moldovan delegation put property issues in first place.
Chisinau does not recognize Transnistria Railroads as a legal
entity, and maintains that its assets all still belong to Moldova
Railroads (CFM). Chisinau argued that CFM is the only
internationally recognized party to the relevant international
treaties and agreements. As such, CFM is the only entity which can
bear responsibility for traffic security and passenger/cargo safety
on the entire territory of Moldova. The Chisinau delegation
proposed that the status quo ante be restored, i.e. that the sides
resume the activity of the joint Chisinau-Tiraspol Technical and
Economic Council, where the sides had previously cooperated in joint
management of Transnistrian segment of the railroad. The Chisinau
delegation proposed that Tiraspol submit its proposals to amend the
Regulation of the Council to meet Transnistria's new demands
relating to distribution of the company's revenues. Tiraspol
rejected Chisinau's proposals, arguing that the Council did not
respond to the new realities that a new legal entity--Transnistria
Railroads--had been created. Chisinau does not recognize
Transnistria Railroads, and hence the interaction between the two
sides periodically degenerated into a shouting match.

Business and Politics: How Can Steel Bypass Moldova?
-------------- --------------


6. (SBU) Tiraspol proposed that traffic be restored on the
Rybnitsa-Slobodka line under terms similar to those in the temporary

CHISINAU 00000556 002 OF 002


agreement signed by Moldovan, Russian and Ukrainian railroad
operators in December 2006, and extended every year. This temporary
trilateral agreement established the terms for transit traffic
through Transnistria. In particular, the agreement stipulated that
Russia and Ukraine bear the responsibility for security and safety
of their respective trains and cargo transiting Transnistrian
territory where the railroad is not effectively controlled by CFM.
The Transnistrian side presented its draft of such a trilateral
agreement. CFM representatives accepted the Transnistrian draft
with little enthusiasm, and promised to examine it and present their
conclusions at the next meeting.


7. (SBU) Comment: We assume that Chisinau's answer will be negative
for both political and legal reasons, since the Rybnitsa-Slobodka
line connects the MMZ steel plant directly with Ukraine and the
outer world. Even though officially this line is not functional,
MMZ uses it for its illegal imports (i.e., imports not registered
with Moldovan customs). If the traffic were to be officially
resumed there, MMZ would also be able to use it for illegal exports
directly through Ukraine, thus avoiding Moldovan territory and
Moldovan customs posts. For these reasons, Transnistria considers
it essential to have this line open, while for Chisinau it is
essential to preserve the status quo until a broader political and
economic settlement of the conflict is completed. End comment.

Property Is at Stake
--------------


8. (SBU) Several minor disagreements between Chisinau and Tiraspol
were also discussed, such as Chisinau's desire to have Moldovan
transportation police on Transnistrian territory as a pre-condition
for resuming passenger traffic (rejected by Tiraspol),and
Chisinau's desire that tickets be sold only in exchange for Moldovan
currency. However, the fundamental underlying controversy that
makes it impossible to reach any agreement on the smaller issues
remains whether or not Transnistria Railroads would be recognized as
a legal entity and whether the railroad infrastructure and trains in
Transnistria still belong to CFM or to the newly created
Transnistrian operator. Chisinau will not accept ceding its
property, and under the current circumstances and leadership,
Tiraspol will not give up on having its own railroad operator.

Operations United Until 2004
--------------


9. (SBU) Compounding the difficulties is the fact that the Moldovan
Railroad Company (CFM) had operated as a united operator on the
entire territory of the Republic of Moldova, including Transnistria,
as recently as the summer of 2004. In 2004, Transnistrian
authorities decided to create a railroad company of their own and
forcibly seized all assets and trains of CFM located in
Transnistria. Despite this, train traffic continued to move through
Transnistria relatively uninterrupted for another two years.
Tiraspol suspended railroad traffic in March 2006 after Moldova and
Ukraine enforced the new customs rules requiring Transnistrian
exporters to register their cargo with Moldovan customs. Since
then, the railroad lines across Transnistria have been open only for
transit cargo trains from Russia and Ukraine and one passenger train
weekly running between Moscow and Chisinau. Transnistrian
enterprises cannot ship their cargo from any of the three stations
in the region--Tiraspol, Bender or Rybnitsa.

Leadership Revenues Also at Stake
--------------


10. (SBU) The other reason which feeds Tiraspol's firm stance is the
business interest of the region's top leadership. Transnistria's
railroad operator provides transportation services through an
intermediate shipping company based in Odessa, Ukraine, and owned by
Smirnov and "Vice President" Alexander Koroliov. Re-uniting the two
railroads under Moldovan operation would leave Smirnov and Koroliov
without this major source of revenues.

Comment:


10. (SBU) Given the difficulties noted above, confidence-building
measures on cross-river railroad issues are the least likely to be
on track in the foreseeable future.

KEIDERLING