New Bucharest mayor says public transport company near bankruptcy due to debts
Recently elected Bucharest mayor Ciprian Ciucu stressed that debts of over RON 2 billion accumulated over time by the City Hall and its subordinates will have to be resolved in the coming period, or else the city-wide transport company STB will go bankrupt.
A week after taking office, Ciucu publicly presented data showing that the City Hall has debts totaling RON 2.105 billion (EUR 421 million), of which RON 811 million (EUR 162 million) are for transport subsidies, RON 504 million (EUR 101 million) for heating subsidies, RON 470 million (EUR 94 million) for incentives granted in the form of social assistance, and RON 232 million (EUR 46 million) in the debts of subordinate institutions. A further RON 88 million is to be paid to businessman Costică Constanda, who won a lawsuit against the City Hall.
The situation is especially dire for the Bucharest Transport Company, or STB. The company is close to bankruptcy if it does not pay its debts.
According to Ciucu, payments and budget credits for the transport company “started to explode” in 2019, after the transformation of the former transport authority into STB. Much of the debts are to the state budget and comes from the non-payment of employee contributions.
The city heating company, Termoenergetica, also has extensive debts to ANAF.
Ciprian Ciucu, who became Bucharest mayor after the election of former mayor Nicusor Dan as president in the summer, said that the fiscal situation was somewhat remedied by the latter, but that it remains serious.
“If we do not pay on time those installments that the former general mayor devised, this company will be almost bankrupt. And I am not afraid to pronounce this word. So, we are talking about RON 1.38 billion, once again, debts that STB has to ANAF,” said Ciprian Ciucu on Saturday, December 20, at the first press conference held as general mayor of the capital.
To make good on its debts, the Municipality of Bucharest needs a budget of RON 8.5 billion lei for next year, Ciucu said, according to News.ro. He explained that if Bucharest continues to receive 50% of the tax share from the government, with the rest going to the district City Halls, the amount will be totally insufficient.
The newly elected mayor also noted that Bucharest “does not have real fiscal autonomy,” so it has little room for new investments.
“It is practically impossible at this moment to talk about being able to balance the budget for next year,” Ciprian Ciucu explained.
At the moment, the general City Hall spends RON 8 billion on operations, and less than RON 1 billion on investments. In the case of the capital’s districts, the situation is “more balanced” from the point of view of expenditure structure, with higher amounts spent on development.
“Subsidies are eating up the budget. We have two major structural holes (transport and heating) that are taking us to the brink of bankruptcy if we do nothing in 2026, and here I commit that we will do something, not just go and stand with our hand out to the government. There will be structural reforms during 2026,” said the new mayor, who also headed District 6 City Hall before being elected earlier this month.
Ciprian Ciucu also heads the Bucharest branch of the National Liberal Party (PNL). He informed prime minister Ilie Bolojan and finance minister Alexandru Nazare, who are part of the same party, about the extremely serious financial situation of Bucharest City Hall. As a result of the talks, the government is set to ensure a “modest loan” for Temoenergetica to prevent it from entering an incapacity of payments.
Ciucu avoided directly ascribing blame to the former Social Democrat (PSD) government headed by Marcel Ciolacu for the situation. However, the time frame he mentioned signals that difficulties began when the government cut its financing of the city during Ciolacu’s tenure.
“In the last three years, Bucharest City Hall has had over RON 2 billion taken away through the reduction, in 2024 and 2025, of the amount of sums collected from income tax that can be redistributed to local authorities, by eliminating certain categories of income from the allocation formula. This money no longer reached Bucharest; the government used it for something else; the allocation of lower shares to Bucharest City Hall compared to sector city halls, while PMB has the responsibility of operating major public utility services (heating and public transport,” Ciucu wrote on Facebook.
(Photo source: Ciprian Ciucu on Facebook)
