Framework for improving railway sector performance in sub-Saharan Africa
ments, and the update of predictions are mandatory for developing a successful partnership. This is a key element for adopting achievable levels of concession fees and taxes to be paid to governments. The governments have to follow their long-term objectives in their cooperation with the private sector. More important than obtaining a higher concession fee are the advantages brought by the concessionaires by creating jobs, generating taxes, developing better quality transport services, stimulating economic development of the country, etc.
According to the 2009 AICD (Africa Infrastructure Country Diagnostic) Report, an average of $100 million is needed every year for track rehabilitation and renewal of the network in SSA (excluding South Africa), with a further $80 million a year needed for rolling-stock and $20 million for facilities, maintenance equipment. This brings the total to about $200 million a year. In addition, there is a backlog investment of possibly up to $3 billion, which could be spread over a 10-year period. The combined annual program would cost about $500 million for the first 10 years, after which the investment level would decline to the steady-state level of $200 million.
Address the issue of passenger transport services. The concession of passenger transport services must be addressed by separate concession agreements. The current approach of mixed services (freight and passenger) in the same concession agreement is not recommended for many reasons presented in the current document. The success of the concession of passenger services is tightly related with the correct estimation of volume of contracted services, the measurement of the provided services, and the timely payment of compensation for the provided services. Avoid undercapitalized concessions. During the process of selection of concessionaires, it is vital for the governments to accurately assess the capital base of candidates and therefore their ability to address the operating issues. The assessment must be done based on a realistic assessment of the market growth, of the costs for upgrading the necessary rolling stock, and of the cost of operations. The state contribution for the investments in infrastructure must be part of this approach. The main goal of the assessment of capital base of concessionaire is to create the conditions necessary for a smooth operation of the transport services in the context of diminishing the accumulated backlogs in maintenance and investments. Improve the regulatory framework for railway concessions. The full implementation of the regulatory functions is a long process and may face strong difficulties in many SSA countries. On the short term it is highly recommended to introduce in the con-
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