The Kariba Dam
Zambia Railway Restructuring Project
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Over the past 25 years Zambian Railways has experienced a substantial decrease in freight transport with a consequential fall in revenue. The state owned railway system is inefficient, poorly maintained, prone to delays and derailment, under-invested, and unable to provide the quality service demanded in the face of increasing competition from road transport. In short it is worn-out. In addition other factors have contributed to the decline in the country's railways. The general economic decline of the country, the poor performance of Zambia's copper parastatal, ZCCM, and the recessions and political instability in neighbouring Zimbabwe and Democratic Republic of Congo have all contributed to the dire situation that the railway is in.
The Zambian government has approached the World Bank's International Development Association to provide US$31 million of credit to help restructure and privatise the railway. The government hopes that with this support it will be possible to find private sector firms that will participate in the management and operation of the railway.
The project aimed at the restructuring process would have several components including:
- Finding private sector firms to invest in the railway.
- Staff rationalisation and reorganisation
- Staff redundancy and social provision
- Staff retraining and redeployment
- Contribution to remaining employees pension schemes
- An assessment of the environmental impact of restructuring and privatisation
A large proportion of the funding is for reducing the negative effects of the redundancy. In 1998 the government with external funding hired the services of expatriate managers who made rapid moves to increase efficiency. The workforce was reduced from 5,500 to 3,300 and the availability of rolling stock and trains were increased. However the government is certain that the process needs to continue if Zambia Railway is to expand its share of local, national and international freight transport. Shifting freight back to the railways is seen as essential given that the road system is insufficient to cope with the increased road freight and make a contribution to the governments strategy for growth.
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Related Glossary Items:
Privatisation
Infrastructure
Investment
World Bank
International Development Association (IDA)
Externalities
