Economic experts warn that the Liberian government’s intention to replace ArcelorMittal (AML) as the railway operator may lead to financial strain. AML has maintained operations at no cost to the government and invested over $800 million. Proposals favoring High-Power Exploration (HPX) could result in significantly lower transit fees and job losses, raising concerns about the impact on Liberia’s economy and taxpayers.
Economic experts in Liberia are expressing serious concerns regarding the government’s initiative to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. Analysts warn that such a change could lead to unnecessary expenses and exacerbate the nation’s already vulnerable financial situation. Since 2005, AML has effectively managed the railway without cost to the government while investing over $800 million in its rehabilitation and upkeep.
Government officials appear to be pursuing the introduction of a new operator, which could incur significant expenses for the Liberian government. It is estimated that the operation of the 250-kilometer railway may cost between $50 million to $75 million annually, including expenses for maintenance, staff, security, and regulatory compliance. Given the financial limitations faced by the country, including reduced foreign aid, these costs could impose a severe burden on taxpayers.
Experts contend that the motivation behind the replacement of AML is primarily political, aimed at favoring High-Power Exploration (HPX), a Guinean mining company, rather than the economic well-being of Liberia. Under the proposed arrangement, HPX would remit only $5 million to $10 million annually in transit fees, contrasting sharply with the $200 million anticipated from AML under a new agreement.
Moreover, analysts emphasize that unlike AML, which plans to create 2,000 additional jobs, HPX does not have intentions to invest in job creation within Liberia. Experts unanimously advocate for maintaining AML’s management of the railway to optimize revenue without accruing additional costs, ensuring long-term financial stability for the nation.
Given the current economic instability and challenges such as the reduction of USAID support, experts are urging the government to prioritize sustainable financial decisions that serve the interests of Liberians over political ambitions. The forthcoming decision regarding the Buchanan-Yekepa railway stands as a critical assessment of Liberia’s leadership and governance.
In conclusion, the concerns raised by economic experts highlight the potential detrimental impact of replacing ArcelorMittal on Liberia’s financial stability. The proposed shift poses considerable risks, especially given the substantial financial demands of a new operator and the lack of significant contributions from High-Power Exploration. It is imperative that the Liberian government prioritizes economically sound decisions to safeguard the country’s fiscal health and support the well-being of its citizens. The final verdict on the railway’s management will serve as a significant indicator of Liberia’s commitment to responsible governance and economic growth.
Original Source: frontpageafricaonline.com
