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The Sierra Leone Railway (SLR) closing debacle

25 May 2020 at 06:21 | 3084 views


The Sierra Leone Railway (SLR) Closing Debacle - A Critique of the Role of Italconsult (Italy):

By Kortor Kamara, USA

The Sierra Leone Railway was a wholly owned and operated government of Sierra Leone department, within the Ministry of Transport and Communications - which had its main line built between 1896 and 1908 to open up the interior of the country for passenger and freight transportation - but had since its heyday in the early 1960s fallen into dire financial straits and decline and was heavily dependent on annual subsidies from the government.

According to figures reported in the 1970 Land Transport Survey Report, government subsidies in the recent prior years averaged 1 million Leones, which at the time was equivalent to 1.2 Million US dollars.

With a workforce of 2,000 employees (the nation’s largest employer) and personnel expenses alone averaging about 1.2 million Leones ( equivalent 1.4 Million US dollars ) per annum by 1970 - representing approximately 3 times as high as the SLR gross total revenue - it does not take a rocket scientist to understand the dire economic straits confronting the railway operations.

Moreover, traffic volume on the railway had precipitously declined that by 1968/69, the decline was approximately 75 percent of its pre-1961 volume, with only 620,000 passengers and 40,000 tons of freight transported.

Mismanagement, an over bloated workforce and ever rising personnel costs, coupled with inefficiencies in infrastructure, machinery and an increasing road competition, all converged and compelled the government to seek an alternative economic viable solution.

It was thus against this backdrop that the SLPP government in 1966 requested financing for a nationwide transportation study from the UNDP, to examine the feasibility of rehabilitating and restructuring the government owned Sierra Leone Railway from a money-losing commercial enterprise into a viable business concern.

In 1966 the World Bank Group, following extensive lobbying by the Albert Margai government agreed to act as the Executing Agency for a UNDP-financed Land Transport Survey (LTS) in Sierra Leone. The international consultancy for performance of the survey, was awarded by the UNDP/World Bank Group to the Italian company, Italconsult (Italy).

The goal and main objectives of the survey was to examine the feasibility of rehabilitating the government owned Sierra Leone Railway (SLR); a review of the country’s road transportation system and to prepare programs for highway improvements and road maintenance.

The Land Transport Survey Report
Having been awarded the consultancy contract to perform the land transport survey in 1966, Italconsult did not however issue its final report until 1970.

In the interim Sierra Leone had undergone major political vicissitudes with the 1967 elections, which the SLPP Albert Margai government had lost; a military interregnum with the NRC and the subsequent installation of the APC government of Siaka Stevens in 1968.

It is worth noting that even before completion of the UN-financed land transportation study, the APC led government had already embarked on closing and dismantling of a major section of the railway. The branch line to the northern province, from Bauya to Makeni was shutdown and closed to the public in 1969.

The original scope and purpose of the Land Transport Survey, as envisaged by the Albert Margai administration - to examine the feasibility of rehabilitating and restructuring the SLR - was hijacked and interfered with by the new APC administration, as Italconsult was commissioned to perform further studies with a detailed program for closing the main railway line, retrenchment of employees and disposing of assets by 1972.

The government had by 1970 decided in principle and communicated its decision to the World Bank Group/UNDP that it intended to phase out the SLR and dispose of its assets by 1972. This commitment from Siaka Stevens was personally delivered by Dr. Mohmaed Sorie Forna, the Finance Minister during discussions with the World Bank in Washington in August, 1970, while negotiating financing for construction of the Bo-Kenena highway.

Thus, it was not surprising that the Italconsult findings released in the 1970 survey report provided for closing down by 1972 of the SLR, citing losses incurred of about 1 million Leones ( 1.2 Million US dollars) annually. The report also provided for investment program for road improvements and a comprehensive program for highway maintenance.

The Role of Italconsult
The Italconsult - conducted feasibility studies, to determine whether Sierra Leone Railway should be retained concluded generally, that “over the next 10 years road transport would be more economical than rail transport, even assuming; a) the technical reorganization of the SLR; b) reduction and retraining of railway personnel; c) minimum new investment in railway equipment; d) maximum recapture of traffic’. The study found that a discounted total transport cost of rail versus road was 3 times as much for railway against road.

The economic assumptions and findings by the Italian-based company were largely never stress tested and their land transport survey informed and continues to form the basis, for a large part of our nation’s infrastructural underdevelopment. As an example, their feasibility study finding that “over the next 10 years road transport would be more economical than rail transport” in Sierra Leone has not been borne out.

However, the Italian consultancy company, Italconsult succeeded in parlaying a land transport survey study into several lucrative contracts for feasibility studies, including the studies for the Bo - Kenema ; Tiaama - Bo, Lunsar - Matotoka and Freetown - Waterloo Highways; and training and technical programs in the Ministry of Works.

Was the Railway Closed Due to World Bank Group Recommendations?
Several generations of Sierra Leoneans have and will continue to grapple with the question of whether the APC administration of Siaka Stevens was forced by the World Bank/UNDP into the premature closure and dismantling of the assets of the Sierra Leone Railway in 1972.

I have attempted to provide a chronology of some of the events leading to that momentous decision, which will continue to have debilitating consequences for Sierra Leone and her development for generations.

A review of the seminal Land Transport Survey, its assumptions and recommendations, how the original scope and purpose of the study was politically manipulated and changed and the fact that by 1969, the government had already embarked on closing of the northern province branch line, all point to a conclusion that the determining factor in the closure was not due to a non-existent World Bank Group/UNDP fait or recommendation.

The recommendations of the Land Transport Survey were only that - recommendations - that an astute government would have carefully assessed and analyzed with due consideration to the adverse ramifications, cost-benefit analytics and due diligence. The Siaka Stevens administration woefully failed in this regard and the blame attributed to the World Bank Group, as having recommended the closure, by his apologists and party will never stand the test of time and the available known records.

Why is this relevant?
As I responded to a friend online, who questioned “what difference would it make today?”, my response remains that “it is a cautionary tale for the elites and policy makers in today’s society to learn from the very glaring mistakes by their predecessors. Either through willful misrepresentation of the LTS reports and their conclusions for political considerations, the largest employer and and economic backbone of Sierra Leone was prematurely closed in 1972. Such a discourse must always be relevant to inform current policy decision making”.

It is interesting to note that despite several recommendations made by the consultants, political considerations and lack of the requisite due diligence and gross negligence on the part of the APC government, caused them to just be mono focal on the railway closure option.

It is my contention that Stevens literally highjacked a Land Transport Survey study, initially commissioned by the SLPP administration in 1966 and turned its scope and multiple findings into the basis for closure of the Sierra Leone Railway, mostly out of spite for the mostly south-eastern region beneficiaries, who had mostly voted against his party and government in 1967 and whom he perceived to have supported the NRC military regime.

For those who contend that restructuring of the railway was economically untenable, I proffer that as a department of government, the SLR was an integral part of the government of Sierra Leone, providing much needed essential services and not just a business enterprise and governmental subsidies were thus in order.

Moreover, as noted above annual government subsidies was about 1 million Leones ( approximately 1.2 million US dollars ) to cover the SLR operating losses by 1970. The financing/ borrowing for road construction and maintenance the government subsequently embarked on far out-weighed the subsidies the government was paying to keep the railway afloat.

Finally, the government’s announced intention in December, 1969 that it will acquire 51 percent shares in the 4 foreigner owned mining companies in the country, shows that the subsidies being paid to the railway were only used as a smokescreen, masking a more insidious plan. Where was the government getting the money to purchase these majority shares in these foreign-owned mining companies? In fact in 1970, about the same period the decision to close the railways was made, the government did indeed acquire 51 percent shares in the main diamond mining company, SLST from De Beers, resulting in the formation of NDMC.