Experts Caution Liberia Against Railway Operator Replacement…

Economic experts in Liberia caution against the government’s plan to replace ArcelorMittal with a new operator for the Buchanan-Yekepa railway. Concerns include substantial financial obligations, increased costs, and negative impacts on job creation and economic stability. The potential change is seen as politically motivated rather than economically sound, urging the government to consider the long-term financial health of the country.

Economic experts in Liberia have expressed significant concerns regarding the government’s intention to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. They caution that this decision may lead to considerable financial consequences and increase the strain on the already fragile economy. The removal of AML, which has operated the railway at no expense to the government, is viewed as a miscalculation that could exacerbate fiscal issues for the nation.

Since 2005, ArcelorMittal has invested over $800 million in the restoration and ongoing maintenance of the railway. Their existing agreement enables other companies, including High-Power Exploration (HPX), to utilize the railway infrastructure without imposing any added costs on Liberia. However, the government is considering appointing a new operator who would demand costly compensation, undermining the previous financial benefit.

Experts have calculated that management of the 250-kilometer stretch of railway could entail expenses ranging from $50 million to $75 million annually. These costs would cover maintenance, staffing, security, and adherence to regulatory standards. Given Liberia’s current economic difficulties—marked by reduced foreign aid and a challenging economic landscape—this potential expenditure could place an untenable burden on taxpayers.

Critics of the proposed replacement of AML believe that the decision is influenced more by political interests than sound economic reasoning. It has been suggested that certain government officials are favoring HPX, a Guinean mining enterprise, over the long-term fiscal health of Liberia. Under the proposed terms, HPX would only pay Liberia between $5 million and $10 million in transit fees annually, a substantial decline compared to AML’s prospective contribution of $200 million once its Mineral Development Agreement is finalized.

Furthermore, industry experts highlight that HPX has no intention of investing in Liberia or creating local employment opportunities, whereas AML is positioned to generate up to 2,000 additional jobs as part of its expansion efforts. Maintaining the current partnership with AML could ensure a stable revenue stream for Liberia without incurring additional financial burdens.

In conclusion, experts assert that replacing AML could impede Liberia’s economic growth and jeopardize the nation’s fiscal stability. As Liberia faces mounting economic challenges, including the termination of USAID programs, experts urge the government to adopt fiscally responsible strategies that prioritize the needs of its citizens while resisting politically motivated decisions. The choice regarding the Buchanan-Yekepa railway presents a critical test for the leadership in Liberia.

In summary, economic experts strongly advise against the government’s plan to replace ArcelorMittal as the operator of the Buchanan-Yekepa railway. This decision could lead to significant financial burdens on the Liberian economy and strains on taxpayer resources. Maintaining the partnership with AML is viewed as crucial for the country’s financial stability and potential job creation, urging the government to prioritize economic rationale over political agendas.

Original Source: frontpageafricaonline.com