Experts warn that replacing ArcelorMittal as railway operator may burden Liberia with financial strain, given potential costs between $50 million to $75 million annually. Concerns center on prioritizing political interests over economic viability, particularly with the proposal favoring HPX, which offers significantly lower contributions compared to AML. Analysts advocate for the continuation of AML’s management to ensure long-term revenue and job creation amid ongoing economic challenges.
Economic analysts are voicing substantial concerns regarding the Liberian government’s reported intentions to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. Experts alert that such a decision may lead to ineffective spending, further straining the nation’s already vulnerable financial state. Since 2005, AML has invested over $800 million into the railway’s rehabilitation and maintenance, providing its management services at no expense to the government.
Current dialogues indicate that the government may be leaning towards introducing a new operator who would require financial compensation from Liberia. According to expert estimates, managing the 250-kilometer railway might cost between $50 million and $75 million each year. This expenditure would cover aspects such as maintenance, staffing, security, and regulatory needs, imposing a considerable burden on taxpayers amidst reduced foreign aid and ongoing economic challenges.
Economists believe that the move to oust AML appears to be motivated by political interests instead of economic rationale. Some officials are allegedly favoring High-Power Exploration (HPX), a Guinean mining company, at the expense of Liberia’s long-term financial health. The proposed arrangement indicates that HPX would contribute only $5 million to $10 million per year in transit fees, far less than the approximately $200 million that AML is anticipated to provide under a new agreement after the approval of its Mineral Development Agreement (MDA).
Additionally, analysts emphasize that HPX lacks plans for local investments or job creation, unlike AML, which could potentially generate 2,000 new jobs for Liberians with its expansion. Experts advocate for the government to focus on maximizing revenue, particularly by continuing its partnership with AML, thus securing long-term financial benefits without incurring unnecessary costs.
In light of Liberia’s mounting economic issues, including the withdrawal of USAID programs, experts urge the governmental leadership to prioritize sound fiscal policies that serve the interests of the citizens over political maneuvering. The decision regarding the future management of the Buchanan-Yekepa railway will serve as a significant test of the current administration’s commitment to the economic well-being of Liberia.
In conclusion, economic experts convey that replacing AML with a new railway operator could lead to detrimental financial consequences for Liberia. The government is urged to prioritize sound economic planning, maintaining AML’s management to secure essential revenue streams and promote job creation. The decision regarding the Buchanan-Yekepa railway is thus crucial for the nation’s economic stability and growth.
Original Source: frontpageafricaonline.com
