on September 26, 2012in South Africa
According to a technical report prepared in 2009 for the Southern African Development Community (Sadc), railway concessions in the region have generally been characterised by “declining performance”. The consequences it says are a deteriorating state of infrastructure as well as “massive retrenchments” and reduced business cooperation amongst railways in certain areas.
The report evaluated each of the railways that had been concessioned in the region to determine whether operational and financial performance had improved since concessioning. Reasons for failure to achieve expectations were examined.
Several factors were found to be common among those concessions whose performance was poorest. One of these was failure by the participating governments to enact enabling legislation and create a railway regulator prior to concessioning. This was found to be the case in Zambia, Mozambique and Malawi.
“To a lesser extent the same was true in Zimbabwe,” the report said,” but that concession is unique in its concession process. In the absence of enabling legislation and regulator, several concessions depended upon contract language to govern concession obligations. In most cases the contract language did not anticipate every circumstance and eventuality that might arise.”
Former Zambian finance minister Ng’andu Magande says he agrees with the Sadc report and applauds the government’s recent decision to rescind the Railway Systems of Zambia (RSZ) concession.
He was quoted by The Times of Zambia saying: “Being at the centre of Zambia’s development, I realised that a weak railway system would frustrate the country’s development. Through Sadc ministers’ meetings and in my earlier life I had become aware that other regional countries had cancelled railway concessions for non-performance.”
The state subsidies to railways had been eliminated, but “as a result of the reduced capacity of such railways, some traditional rail traffic has since moved on to the road, causing immense damage to road pavements.”