Liberia: President Boakai’s Executive Order Establishing National Railway Authority Raises Concerns Amid Absence of Main Rail Customers

Monrovia – President Joseph Nyuma Boakai has issued Executive Order No. 136, extending the provisions of the earlier Executive Order No. 112 and reaffirming Liberia’s dedication to the event and enhancement of its rail infrastructure.

The new Executive Order, which takes rapid impact, establishes the National Railway Authority (NRA) to supervise and handle the nation’s nationwide rail property. The NRA will make sure the environment friendly and equitable use of rail infrastructure, notably benefiting the mining sector, in addition to facilitating the transportation of passengers and items.

Executive Order No. 112, initially issued by former President George Weah on October 17, 2022, expired with out the Legislature passing the National Rail Authority Act.

In response, President Boakai has moved swiftly to increase the Executive Order, enabling the institution of the NRA to manage and handle Liberia’s rail infrastructure consistent with worldwide finest practices.

In addition to establishing the NRA, Executive Order No. 136 mandates the appointment of rail regulators, the staffing of key management positions, and the technology of funding by means of the gathering of consumer charges.

Executive Order Sparks Concern 

While President Boakai’s transfer could seem progressive, analysts have raised issues over the dearth of clear financial modeling, transparency, and the questionable monetary implications. The absence of agency commitments from key stakeholders, together with ArcelorMittal Liberia, additional fuels doubts in regards to the timing and long-term advantages of the initiative.

In this report, FPA examines the important points that warrant nearer scrutiny.

Lack of Commitment from Mining Companies

Despite the federal government’s formidable announcement, no mining firm, together with these in Guinea, has proven related approval from the Guinean authorities to permit utilization of the proposed railway.

High Power Exploration (HPX), which appears central to the federal government’s railway plans, doesn’t but have a mining license for its Guinean operations, not to mention an operational mine. Analysts say with out these important steps in place, discussions about transporting iron ore by means of Liberia are untimely, bordering on speculative and deception.

According to observers, this lack of dedication underscores the fragility of the federal government’s imaginative and prescient for the NRA.

“If the major players involved—like HPX—are not yet in a position to utilize this infrastructure, what exactly is the government of Liberia establishing the NRA for? Investing in such a massive project without concrete, long-term commitments from users signals not just poor planning but potential economic recklessness,” stated an skilled miner, who requested for anonymity.

HPX’s Uncertain Position in Guinea

FPA has gathered that HPX’s state of affairs in Guinea is equally precarious. Along with its accomplice Société des Mines de Fer de Guinée (SFMG), HPX began lobbying the George Weah authorities to ascertain the NRA, however the concept couldn’t transfer ahead as a consequence of potential authorized ramifications. However, neither firm has obtained formal approval from Guinea’s present army management to move ore by means of Liberia. This raises the query: Is Liberia getting used as a pawn in HPX’s lobbying efforts?

Recent studies counsel Guinea’s management prefers HPX to hitch forces with Rio Tinto and different mining firms in Guinea in developing the 650km Trans-Guinean Railway to hyperlink the Simandou iron ore deposits on to the Guinean coast. With such opposition from Guinea, analysts say it’s baffling that the Liberian authorities would prioritize a global railway plan with out totally understanding or addressing Guinea’s stance. Has there been any diplomatic engagement with Guinea to align pursuits? Or is Liberia racing forward on assumptions that might show pricey?

Financial Strains and Questionable Funding Sources

Liberia’s monetary well being is already stretched, so the creation of a brand new establishment just like the National Railway Authority ought to elevate alarm bells. There are public issues in regards to the supply of funding for this large new authorities company. Rumors counsel that HPX has supplied US$25 million to assist the NRA’s creation, which casts an uncomfortable shadow over the federal government’s decision-making course of.

If true, observers say this might mirror a previous blunder—when the Weah administration reportedly accepted $30 million from HPX for a framework settlement that lacked legislative approval, a transfer broadly condemned as corrupt. Observers say accepting funds with out a clear, clear settlement and legislative oversight would deepen distrust within the authorities’s integrity and accountability. Moreover, issues are being raised about whether or not the $25 million is ample to launch and maintain a viable railway venture in the long run?

The authorities has introduced that it’ll fund the National Railway Authority (NRA) by means of consumer charges “levied against users of Liberia’s National Railway assets.” While this may occasionally look like a strategic transfer to generate income, it raises a number of important questions on its feasibility and the sources of this proposed funding.

Currently, there is just one acknowledged consumer of Liberia’s railway infrastructure—ArcelorMittal Liberia (AML). Under the phrases of its concession settlement, ArcelorMittal’s operations are built-in, masking mine, rail, and port. This built-in concession signifies that the corporate shouldn’t be required to pay separate consumer charges for its use of the railway. Therefore, ArcelorMittal can’t be the supply of those proposed consumer charges, as it’s legally exempt.

Recent studies counsel Guinea’s management prefers HPX to hitch forces with Rio Tinto and different mining firms in Guinea in developing the 650km Trans-Guinean Railway to hyperlink the Simandou iron ore deposits on to the Guinean coast. With such opposition from Guinea, it’s baffling that the Liberian authorities would prioritize a global railway plan with out totally understanding or addressing Guinea’s stance.

On the opposite hand, HPX, an organization fascinated by Liberia’s rail property, has no current authorized or contractual settlement with the federal government relating to using the railway. HPX’s $15 billion funding plans deal with the event of Guinean iron ore assets, and it stays unclear whether or not it would ultimately use Liberia’s rail infrastructure or set up its personal. Without a contractual settlement in place, HPX can’t be anticipated to pay consumer charges both.

This results in a basic query: from which customers does the federal government intend to gather these charges to operationalize its National Railway Authority? Given that there are at present no different vital customers of the railway, the federal government’s plan seems unsustainable with out increasing rail entry to different potential customers or renegotiating current agreements. If the federal government fails to deal with this hole, the funding mechanism for the NRA may stay aspirational fairly than sensible.

It was thought that the federal government would discover renegotiating the prevailing phrases with ArcelorMittal or securing new agreements with firms like HPX. Without a transparent and legally binding framework that features a number of customers, the imaginative and prescient of a self-sustaining National Railway Authority may stay elusive.

Uncertainty Around HPX’s Investment Promises

The authorities and HPX are but to obviously give any replace on the standing of HPX’s much-publicized $5 billion funding package deal.

HPX on February 9 introduced the Liberty Corridor infrastructure improvement venture which it stated goals at making a cross-border transportation route for iron ore from Guinea’s Nimba mountain area to the Liberian coast.

Months after the announcement, there’s little readability on the standing of this funding. What concrete advantages can Liberians count on? Beyond accommodating HPX’s transportation wants, what are the tangible benefits to the nation, notably when it comes to job creation, infrastructure improvement, and income technology?

The authorities owes the general public transparency on how this funding package deal is progressing and what function the NRA would play in it. Is this merely a automobile to facilitate HPX’s ambitions, or does it serve the broader pursuits of Liberia’s economic system and folks?

Is Liberia Sacrificing Its Best Interests?

Observers says the Government of Liberia’s choice to ascertain a National Railway Authority, with out the mandatory commitments, monetary backing, or a transparent understanding of regional dynamics, seems rushed and probably detrimental.

Liberia deserves higher than imprecise guarantees and speculative ventures pushed by exterior pressures. If different mining firms should not totally on board and HPX Guinea’s approval stays unsure, is it sensible for Liberia to cost forward with such a pricey, high-stakes venture?

Moreover, the monetary strains, mixed with questionable sources of funding, amplify the dangers. The authorities should prioritize transparency and accountability to keep away from repeating previous errors. Liberia can’t afford to embark on a venture of this magnitude with out a strong plan, assured commitments from all concerned events, and assurances that it serves the broader nationwide curiosity, not simply the pursuits of a single overseas firm and some authorities officers.

Executive Order No. 136 raises important questions that should be addressed earlier than Liberia strikes ahead with the institution of the National Railway Authority. The authorities owes it to the Liberian individuals to make sure that this choice isn’t just about facilitating company ambitions however about making a sustainable and equitable future for the nation.