Economic experts warn against the Liberian government’s plan to replace ArcelorMittal as the Buchanan-Yekepa railway operator due to the financial implications. AML has invested significantly in the railway at no cost to the government, while the new operator, HPX, would result in considerable expenses and reduced revenue. Maintaining the current partnership is emphasized as critical for economic stability and job creation in Liberia.
Monrovia – Economic experts express significant concerns regarding the Liberian government’s proposal to replace ArcelorMittal (AML) as the operator of the Buchanan-Yekepa railway. They warn that this transition could incur unnecessary expenses and strain the nation’s fragile economic condition.
AML has operated the railway since 2005, investing over $800 million in its rehabilitation and maintenance without any cost to the government. Under the current agreement, companies like High-Power Exploration (HPX) can utilize the railway’s infrastructure without additional charges to Liberia.
Reports indicate that government officials favor replacing AML, requiring a new operator who would demand substantial financial compensation from Liberia. Experts predict that managing the 250-kilometer railway could cost between $50 million to $75 million yearly, impacting taxpayer funds and diverting resources from critical services.
Analysts view this push to replace AML as politically motivated, favoring HPX, a Guinean mining company, over the country’s long-term financial sustainability. HPX would contribute only $5 million to $10 million annually in transit fees, far less than the projected $200 million that AML could offer under an updated agreement.
Furthermore, HPX has no immediate plans to invest in Liberia or create local jobs, while AML’s existing operations could potentially add 2,000 jobs for Liberians. Experts assert that maintaining the partnership with AML is crucial for maximizing revenue and ensuring financial stability.
Replacing AML is described as detrimental to Liberia’s economic progress, carrying significant financial risks. In light of reduced foreign aid and other economic challenges, experts urge the government to prioritize fiscally sound decisions to safeguard the welfare of its citizens.
The impending decision regarding the Buchanan-Yekepa railway serves as a crucial test for Liberia’s leadership, emphasizing the need for strategic, economically justified actions in the face of mounting challenges.
The government’s move to replace ArcelorMittal as the railway operator raises serious economic concerns among experts. It risks incurring significant financial burdens and jeopardizing Liberia’s economic stability during a time of fiscal constraint. Maintaining the existing partnership with AML is advocated as a means to secure long-term revenue and job creation, while prioritizing the nation’s financial health over political interests. The outcome of this decision is pivotal for the future of Liberia’s economic landscape.
Original Source: frontpageafricaonline.com
