Economic experts in Liberia are voicing concerns about the government’s plan to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. They warn that the change could impose further financial strain on the government, which is already facing significant fiscal challenges. AML has managed the railway at no cost to the government, while the proposed new operator, HPX, may require substantial compensation, undermining the nation’s economic stability and public services.
In Liberia, economic experts are expressing significant concerns regarding the government’s intention to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. They warn that this decision may lead to wasted financial resources and exacerbate the nation’s already precarious economic situation. AML has operated the railway without cost to the government since 2005, investing over $800 million in rehabilitation and maintenance, while allowing other companies to access the railway infrastructure at no extra cost to Liberia.
Experts caution that selecting a new operator would impose hefty expenses on Liberia, with estimated annual management costs for the 250-kilometer railway ranging from $50 million to $75 million. These costs encompass maintenance, staffing, security, and regulatory compliance. Given Liberia’s current fiscal constraints, particularly in light of diminishing foreign aid and persistent economic challenges, this financial burden could detract from essential services such as healthcare, education, and infrastructure development.
The drive to supplant AML appears politically motivated rather than based on sound economic reasoning, according to experts. Reports suggest that certain government officials may be prioritizing the interests of High-Power Exploration (HPX), a mining company from Guinea, over the financial security of Liberia. HPX is proposed to pay Liberia between $5 million and $10 million annually in transit fees, which is significantly less than the $200 million AML is projected to contribute under a revised agreement following the approval of its Mineral Development Agreement (MDA).
Moreover, analysts have highlighted that HPX does not plan to invest in Liberia or create local jobs, contrasting sharply with AML’s potential expansion, which could yield an additional 2,000 jobs for Liberians. Given this context, experts advocate for the government to emphasize maximizing revenue streams by continuing its partnership with AML. Such a course would enable Liberia to secure sustainable revenue without incurring undue expenditures.
Replacing AML could impede Liberia’s economic growth and harbor substantial risks for fiscal stability. In light of rising economic issues, including the termination of USAID initiatives, experts are imploring the government to take fiscally prudent actions that prioritize the well-being of the Liberian populace over political interests. Thus, the forthcoming decision concerning the Buchanan-Yekepa railway stands as a pivotal challenge for Liberia’s governance.
In conclusion, experts warn that the proposed replacement of ArcelorMittal as the operator of the Buchanan-Yekepa railway could lead to significant financial burdens for Liberia. The current operator has provided essential services without costs to the government, while new arrangements could detrimentally affect the nation’s economy and public services. The decision ahead reflects the critical need for the government to prioritize sound economic strategies over political gains, ensuring the welfare of its citizens amidst ongoing challenges.
Original Source: frontpageafricaonline.com
