The Abidjan - Ouagadougou railway concession
Mitchell, Brigitta | Budin, Karim-Jacques
The note examines the concession technique in railway operations, for the first time used in Sub-Saharan Africa, in Cote d'Ivoire and Burkina Faso, who jointly concessioned the Abidjan-Ouagadougou Railway to a private operator in December 1994. Since the 1980's, most Sub-Saharan African railways have been experiencing a severe crisis: declining traffic, and revenue; lack of market orientation, and poor service; continued operation of high-loss passenger services; poor maintenance; and, gross overstaffing, in addition to lack of technical, and financial discipline, and heavy financial losses. Attempts to restructure railways as public entities generally failed. Involvement of the private sector in railway operations, under a concession arrangement now seems to be a promising tool for transforming railways into business-oriented enterprises. The note points at the lessons of experience, outlining the importance of the bidding, and selection process for strategic shareholders of the concessionaire company, to widen potential operators, and strengthen competition; the importance of a defined investment financing scheme, to provide incentives to a commercial approach to investing; and, cautions against assigning railway landlord corporations with a major role in the implementation of investment programs.
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