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Régie du Chemin de Fer Abidjan Niger

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The Abidjan-Niger Railway is a 1260 km single-track metric line in francophone West Africa that links Abidjan, Ivory Coast to Ougadogou, Burkina Faso. The Abidjan-Niger railway, like other railways on the continent, was a significant tool constructed and utilized by colonial powers for the purpose of economic exploitation of the West African region. In the 1960s, after independence, both countries decided to take charge of the management of the railway. During a period of economic crisis in the 90s, and under the influence of the IMF and World bank’s structural adjustment policies, both countries decided to hand over the management of the railway to the consortium “Sitarail” composed of (Bolloré group and Maersk) on September 1995.

Contents

Although it was once the predominant transporter of freight and passengers in the corridor, by 2000, the railway faced strong competition from road transport as the region’s road network had improved. The main economic role of the railway is international freight traffic to and from Burkina (petroleum products, containers, fertilizers, grain, clinker and cement, cotton). The railway also played a significant role in domestic transport of petroleum products in Côte d'Ivoire. [1]

Historical background and construction

During the first half of the 19th century, trading posts were established on the coast of Ivory Coast. Later on, there was an increase in military expeditions into the region. Numerous propositions for the establishment of rail lines had been put in place in the 19th century by Captain Marchand (who exploited coastal region between 1893 and 1894) and by Captain Louis-Gustave Binge (who exploited the Kong region, North East of Ivory Coast, Comoé and Mossis in present-day Ougadogou in 1888) and finally by Captain Houdaille. In 1889, French officials established the Houdaille Mission, a survey of the layouts of the West African region. The mission constituted a study of the coastal terrain, the indigenes and the geographical parametres of the region in order to establish the conditions that would facilitate adequate penetration into the colony by the railway. In 1901, the first wharf was put in place at Grand Bassam, the colonial capital of Ivory Coast and by 1903 a new mission was put in place by Captain Crosson-Duplessis, a study of the first 79 km of the railway for the commencement of the construction from the ebrie Lagoon. The construction started officially in 1904, and reached Évry Macougne by 1906 establishing the fist station, Abgoville by 1907 and Dimbokro by 1908 and the train station was constructed in Bouaké in 1912. Although there were numerous obstacles and oppositions (such as the revolt of the Abés against the requisition of Ivoirian locals in 1909 ) the construction progressed. The construction was suspended for 11 years due the prominence of First World War. After the war, the construction recommenced, and the creation of a new colony the “French Upper Volta (present Burkina Faso) led to a new orientation of the rail line. By 1924, the construction reached Katiola, by 1929, Ferkessédougou and by 1933,Bobo-Dioulasso, the terminus for the next twenty years. As a result of the Second World War the construction of the railway was suspended. After recommencement, the railway was completed on the 23rd of October 1954, in Ouagadougou. [2][3]

To a certain extent, the construction of the railway led to a certain level of administrative, economic and geographic organization of the territory The construction of the railway was accompanied by the development of administrative posts. For example, the initial administrative post was established at Ery-Macouguie, the next at Agboville in 1908, the following at Dimbokro, then Katiola and in 1924 at Fekessedougou. Further, due to the railway, Agboville, Dimbokro, Abidjan and Bouaké became the economic poles of the region. For example, in the south, due to the absence of road networks, all local production from Bongouanou, Daoukro, Kotobi, Mbatto and Daoukro converged towards the train stations of Abgoville and Dimbokro. In 1912, Dimbokro became the primary exporter of kola, palm oil and leather, and the secondary in maize and cotton. These two local powers however declined in 1950’s and this led to the improvement of and reliance on road networks. [2][3]

Public Management of the Railway (RAN)

After independence in 1960 till 1989, the Abidjan-Ouagadougou railway was managed and operated by a bi-national public enterprise, the Régie des chemins de fer Abidjan-Niger (RAN), jointly owned by Côte d'Ivoire and Burkina (then Upper Volta). RAN was operated successfully and was financially viable until the middle of the 1970s. From the late 1970s, operational and financial performance declined because of inadequate funding, management and increasing road competition. In the 1980s, RAN was facing critical financial difficulties, and in 1989, for political reasons, RAN split into two separate state-owned companies, the Société Ivoirienne des Chemins de Fer (SICF) and the Société des Chemins de Fer du Burkina (SCFB). This separation exacerbated the inefficiencies in the provision of rail services and led to more shifts of long distance traffic to road transport. The financial situation of SICF and SCFB deteriorated rapidly. [1][2]

The transportation of local passengers was an important policy under the management by RAN. Statistics show that there were 2.6 million locals transported in 1967, 4 million in 1978 and 3.8 million in 1979. The presence of the railway allowed locals participate in the commercial activities across the rail line. However, following the decline of public management and the onset of privatization, the number of passengers transported continued to decline. [2]

Privatization of Railway

Faced with crisis, in July 1992, the Governments of Côte d'Ivoire and Burkina decided to reunify and privatize railway operations under a concession scheme. The World Bank and other donors established a dialogue with the two governments on the design and the conduct of the concession process. Following a call for bids, two offers were received, and in March 1993 the Governments of Côte d'Ivoire and Burkina awarded the railway concession to Sitarail, a joint-stock company incorporated in Côte d'Ivoire. In this consortium SAGA (Société Anonyme de Gérance et Armement), a subsidiary of the Bolloré group and freight-forwarders active in the region, owned 32.65% of the shares while Ivoirian investment group (SICC), Maersk (an international shipping line), railway-engineering consultants Sofrerail and Transurb held about 18 percent of Sitarail’s equity. Côte d'Ivoire and Burkina owned 15 percent of the shares and Sitarail staff owned 3 percent. Two state-owned "railway landlord corporations," the Société Ivoirienne de Patrimoine Ferroviaire (SIPF) and the Société de Gestion du Patrimoine Ferroviaire du Burkina (SOPAFERB) were created. They administered railway infrastructure on behalf of the states, which retained their property. They also hold full ownership of railway equipment (locomotives, wagons, coaches, etc.), which they leased to Sitarail. The former railway companies SICF and SCFB were liquidated and Sitarail commenced its first year of operation 1 October 1995. [1][2]

Sitarail placed emphasis on the transportation of merchandise and this 22 to 27 million CFA francs for the freight transported between 2006 and 2009. Of the 66 railway stations that were established, only 8 were left to function. [2]

Characteristics of the Concession Agreement[1]

Scope of the concession and regulatory framework of railway activity. Sitarail is technically and financially responsible for (a) the operation of freight and passenger services, including all equipment maintenance; (b) the maintenance of rail infrastructure and, in part, the renewal and adaptation of infrastructure; and (c) the current management of the real estate belonging to the railway domain. While rail transport is still qualified in the concession agreement as a "public service activity," the concession agreement makes a clear distinction between commercial services and services operated under a Public Service Obligation (PSO) scheme. For commercial freight and passenger services, Sitarail has the freedom to set service configuration and tariffs, in accordance with profitability criteria set by Sitarail. The concessionaire is simply required to keep the governments informed of the criteria used for selecting services operated commercially. Tariffs freely set and revised by Sitarail are applicable one month after their communication, for information, to the governments, and fifteen days after they are publicized. Special contract rates may be negotiated with shippers; these rates are not publicized. Services operated under a specific PSO scheme can be run at the request of one or both national governments, or at the request of local governments under special contracts between the authority requesting the service and Sitarail. Contracts have to specify the characteristics of the service and the modalities of the financial compensation paid to Sitarail. Presently, no service is operated under a PSO scheme. The concession agreement reserves the governments’ right to grant access to rail infrastructure to "third party" operators after a seven-year exclusivity period. Third-party operators would then pay an infrastructure access fee, to be negotiated between Sitarail and the operator (or to be decided through arbitration, if the parties cannot agree on the fee). The concessionaire is subject to the tax regime applicable to private enterprises. However, for petroleum products used in locomotives, Sitarail is exempt from the fraction of the petroleum taxes levied by the governments for road user charges.

Duration of the concession. The concession is a "rolling concession" with an initial duration of fifteen years. At the end of the first five-year period, and in five-year intervals thereafter, the concession can be extended by mutual agreement for additional five-year periods, thus preserving the fifteen-year concession horizon over time.

Concession fee. Sitarail pays to the rail landlord corporations (representing the governments) a concession fee composed of three parts: (a) a "usage fee"; (b) the rental fee for rail equipment leased by the landlord corporations to Sitarail; and (c) the debt service on credits and loans subscribed by the states or the landlord corporations for rehabilitation investments. The "usage fee" is negotiated between the governments and Sitarail every three years. For the first three years, the usage fee will be as follows: no fee for the first year; 2 percent of Sitarail’S revenue for the second year (half to be paid the second year, and half in the third year); and 4 percent of the revenue for the third year. The equipment rental fee has been negotiated and is specified in the concession agreement.

Rail infrastructure management. Sitarail is technically and financially responsible for train dispatch and maintenance of infrastructure (track, structures, buildings, signaling, and telecommunication equipment). Maintenance standards and methods are freely determined by Sitarail, provided standards guarantee rail safety at the level generally accepted in the industry for the type of traffic carried. Infrastructure investment programs are prepared by the concessionaire and submitted for technical and financial evaluation to the rail landlord corporations. The states mobilize investment debt financing, but Sitarail bears the full cost of the debt service through the third component of the concession fee. Investment contracts are prepared and signed by the railway landlord corporations, who may also implement them. However, at the request of the donor community financing the initial rehabilitation program, implementation responsibility has been transferred fully to Sitarail.

Motive power and rolling stock. At the beginning of the concession, Sitarail selected the motive power and rolling stock from among the existing SICF and SCFB fleets. Sitarail leases this equipment from the two rail landlord corporations who own it. Leased equipment is being rehabilitated by Sitarail, under debt financing mobilized by the rail landlord corporations; the service of the debt is paid fully by Sitarail. New equipment can be bought and financed directly by Sitarail or, at Sitarail’s request, bought by and leased from the rail landlord corporations. Sitarail has directly bought four locomotives in 1996. The governments have the right of first refusal on the sale of Sitarail-owned equipment at the price agreed with the prospective buyer.

Staff. Sitarail is ruled by the common labor law applicable to private sector enterprises in Côte d'Ivoire and Burkina and affiliated with the pension system applicable to private sector employees. The number of SICF and SCFB staff rehired by Sitarail at the beginning of the concession (1,815 out of a total workforce of 3,470) was negotiated during the preparation of the concession agreement. Individual staff was freely selected by Sitarail. The governments have provided severance payments to redundant staff, in part through financing provided by the donor community under sectoral and structural adjustment credits.

Control and dispute resolution. The rail landlord corporations carry out control of the concession on behalf of the governments. The concession agreement stipulates that this control should in no way curtail Sitarail’s management autonomy. Sitarail reports on its activity through documents identified in the concession agreement (mainly annual accounts, annual report on services operated under a PSO scheme, annual report on rail safety, environmental protection, and application of the labor law). A monitoring committee of representatives from the two governments, the rail landlord corporations, and Sitarail examines all questions related to the execution of the concession agreement. Disputes related to the concession agreement between the governments and Sitarail are subject to amicable arbitration. If the arbitration is not successful, the Ivoirian courts settle disputes.

Actuality

Following the decline of activity on the railway, plans for rehabilitation are being put in place. According to the national development plan of Ivory Coast, due to wear and tear and extensive degradation of the rail track, outdated equipment and the low weight of the linear rails, the states managing the project have decided to carry out a rehabilitation of the railway. The overall objective of this project is to preserve and develop the transport of goods and people between Côte d'Ivoire and Burkina Faso by railroad in satisfactory conditions of safety and comfort. This will involve:

• Renovating at least 50% of the rails at curves, and the weak ones among the straight tracks;

• Enhancing the efficiency of track maintenance;

• Ensuring the continuous availability and safety of the track;

• Identifying the speed of trains.

Furthermore, on the 31st of July 2014, a project was lanced by Ivory Coast, Burkina Faso in conjunction with French company, Bolloré and its Romanian rival, Pan African Minerals to extend an improve rail infrastructure in the region. The partnership would extend the existing railway that runs from Ouagadougou to Tambao, a lucrative manganese mine in the remote north east of Burkina Faso, near the border with Niger and Mali, promoting the extension and exploitation of mining activities in the region.

References

Régie du Chemin de Fer Abidjan-Niger Wikipedia


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