PROPOSALS to privatise the operation of Zambia Railways have been approved by the country’s government. Communications & Transport Minister Prof Nkandu Luo confirmed on March 29 that the cabinet had agreed in principle to the concessioning of the national network.
Trade & Industry Minister William Harrington has instructed the Zambia Privatisation Agency to draw up plans for the process, which will establish a government-owned holding company to take over ZR assets, award an operating concession, dispose of any liabilities and then wind up the existing corporation. The intention is to award a 25-year concession for operations and maintenance, under which the operator would be encouraged to invest in rehabilitation of the network.
ZR Managing Director Robert Crawford says that the government will also re-invest the concession payments into the rail network. After an initial protected period during which the concessionaire will be able to earn a return, the government envisages permitting some form of open access competition.
Meanwhile, the newly-appointed Managing Director of Kenya Railways, Douglas Noah Odette, who took over on March 17, immediately announced that privatisation of KR would start next year, and take two years. He hopes to find a strategic partner, who will take a 60% stake in the company, with the rest to be sold to the public. Odette said his top priority was to revitalise the business, pushing freight traffic up from 2·7 million tonnes this year to 3·4 million in 2001, recovering KSh1·2bn of unpaid debts and reducing staff from 10800 to 8500.