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Malawi - Railways Restructuring Project (English)

The project outcome was satisfactory, having achieved its main objective of revitalization of the Nacala-rail route, resulting from the railways' privatization, through concessioning. Its sustainability is likely, and the institutional development impact is substantial. Lessons drawn from the project indicate that, in light of the time involved for a concessioning process to be completed, restructuring railways - without long-term investments - can still produce considerable interim, economic benefits, as shown by the successful results of the Malawi Railways, namely, reductions in operating costs, easing the government's financial support, with improved accountability by the newly incorporated railways, and lake service companies. Despite these benefits, improvements in the operational performance were slow, and the targeted international traffic did not materialize, apparently due to the parastatal framework which hinders staff motivation, and commitment. Privatization thus, appears essential to operate financial, self-sustaining entities, but the need for surplus staff to retire/retrench, regardless of its high political, and social cost, remain paramount. The concessioning experience elsewhere, suggests that investments by parastatals, are rarely valued by potential bidders, thus investments should be technically, and financially evaluated, and if possible, prior to concessioning, long-lived investments be avoided.


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    Malawi - Railways Restructuring Project

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Malawi - Railways Restructuring Project (English). Washington, D.C. : World Bank Group.