Experts Caution Against Railway Operator Change in Liberia Without Economic Justification

Economic experts warn that the proposed replacement of ArcelorMittal as the operator of the Buchanan-Yekepa railway could lead to wasteful spending and financial strain on Liberia. The current operator incurs no costs to the government, while a new operator may impose significant expenses. Experts stress the importance of fiscal responsibility and maintaining alliances that ensure revenue and job creation for the country.

Economic experts in Liberia are expressing significant concerns regarding the government’s plans to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. They warn that such a decision could lead to excessive expenditures and exacerbate the nation’s already delicate fiscal situation. Since 2005, AML has invested over $800 million into the railway’s rehabilitation, and their current operation incurs no costs to the government.

Replacing AML with a new operator would impose substantial financial implications for Liberia. The estimated annual management costs for the 250-kilometer railway range between $50 million to $75 million, which would cover maintenance, staffing, and regulatory compliance. Given the country’s economic constraints, exacerbated by reduced foreign aid and ongoing challenges, this expenditure could burden taxpayers significantly.

Experts argue that the decision appears motivated by political interests rather than sound economic reasoning, with some government officials seemingly favoring High-Power Exploration (HPX), a mining company from Guinea, over Liberia’s long-term economic health. Under the proposed agreement, HPX would provide only $5 million to $10 million annually, a stark contrast to the $200 million that AML could contribute under a new agreement.

Moreover, HPX has not committed to investing in Liberia or creating local employment opportunities, unlike AML, which could potentially generate an additional 2,000 jobs. Given the current economic turmoil, it is crucial for the government to maintain AML’s management to optimize revenue streams while avoiding unnecessary costs.

The experts emphasize that replacing AML could hinder Liberia’s economic growth and jeopardize financial stability. Amid rising economic difficulties and cuts to USAID programs, the government must prioritize financially responsible decisions that benefit the citizens, steering clear of politically motivated choices that could endanger the nation’s future.

In conclusion, the potential replacement of ArcelorMittal as the operator of the Buchanan-Yekepa railway raises serious questions about fiscal responsibility and long-term economic stability in Liberia. Experts advocate for maintaining AML as the operator to secure essential revenue and job creation, rather than succumbing to political influences that may jeopardize the nation’s financial well-being. The decision on the railway operator will serve as a critical litmus test for Liberia’s leadership amid ongoing economic challenges.

Original Source: frontpageafricaonline.com