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Thursday, 20 September 2012

Should the Zambian Government invest in railways?

As Government seeks to spend a large portion of the recent $750m infrastructure pot on the financially beleaguered (and poorly mismanaged) Zambia Railways Limited - currently $120m but it could rise substantially, especially with TAZARA also in likely to take a share - there has been no meaningful debate on whether this is a top priority. Indeed whether it is necessary at all. The question remains, should the Zambian Government invest in railways? A recent paper by Raballand and Whitworth concludes :
With the poor economic and financial returns to railway investment and the uncertainty over Congolese traffic, public investment in railways in current circumstances appears highly risky. Few of the new rail routes proposed in the Sixth National Development Plan appear economically viable under any circumstances. While certain new routes could possibly be viable if mines are prepared to sign long term contracts, such decisions are best left to the private sector. Given its poor track record in railways and the under funding of essential public services, rather than investing in railways itself, the Government’s role should be to: (a) facilitate private investment in the sector; and (b) ensure that trucks cover the full cost of the damage they cause to the roads by enforcing appropriate road user charges.

10 comments:

  1. Precisely,especially our country where we have loads of cargoes to moved about. This cargo is quite heavey and the toll it has on the roads justifies the Zambian government inetentions to revamp its interests is rail networks. The cost benefit analysis is on the gov side as the saving on road maintenance costs can be save and chanelled to other deserving ventures.

    Private business might want to run this venture but truth be told,it can only be possible in certain options,ours is not yet accomdating.

    Kasuba

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