The Little Engine That Couldn't

Myriam Cloutier — 2009-06-04T20:58:42Z

Quick, send in the clowns. Don't bother, they're here.

Railway Privatization in Senegal and Mali

More than five years after the
management of the railway connecting
Dakar, the capital of Senegal, to
Bamako, the capital of Mali, was yielded
to the Transrail consortium, the network
lies in ruins. And it is the population that
is paying the price for a privatization that
went off the rails.

The infrastructure of the Dakar-Bamako
railway is dilapidated, the accidents
frequent. No investment plan has been
implemented despite the promises, since
2003, of the shareholders who have
ascended to the leadership of Transrail.

But the worst is perhaps still to come.
Verging on bankruptcy, Transrail
wants to reduce spending by laying-
off 376 of its 1,468 employees. This
cost rationalization, announced by the
Board of Directors in March, provoked
the ire of the Senegalese and Malian
rail workers. Their unions decided
to sever all ties with management.

In Senegal, the tone has hardened
drastically: at the beginning of April,
the three railway workers' unions
organized a march and brought trains to
a standstill between Thiès (Senegal's
Third City) and Dakar over the course
of twenty-four hours. Recourse to
an indefinite general strike is also in
the offing. On the Malian side, the
the Minister of Transport has made it
known that he opposes the layoffs.

Transrail has a history of adopting
an anti-union stance. Since 2003
hundreds of employees have been laid
off. Moreover, workers have experienced
wage reductions and the elimination of
certain social benefits. In June and July
of 2006, the unions triggered a series
of— ultimately unsuccessful— strikes that
paralyzed rail traffic for several days.

“For the workers, it's miserable. For the
population and the national economy,
it's a disaster. I do not understand how
the public authorities or the president
can continue to defend privatization,”
explained the Director of the Citizens'
Collective for the Restitution and the
Integrated Development of Malian
Railways (Cocidirail), Thiécoura
Traoré. A former Transrail employee
and former leader of the Rail Workers'
Union (Sytrail) in Mali, he himself was
laid off in 2004 without compensation.
The reason offered up by Transrail:
disloyalty, due to the views he expressed
via Cocidirail.

The privatization of the railway has not
only worsened the working conditions
of the union members, it has also
affected the mobility of the population
as well as the local economy. Indeed,
passenger transportation on the
Malian rail network is in a state of
near-abandonment because private
operators predominantly manage
the international transit of goods in
order to reap short-term profits— all
at the expense of service to users.

Furthermore, the closure of twenty-
six stops and stations in Mali ensured
that many villages are now isolated and
Railways in Senegal and Mali
that there are, in the absence of travelers
and merchants, no more opportunities
for inhabitants along the railway line to
exchange food products.

Next Stop, Trouble

In 2003, Mali and Senegal privatized
international traffic on the Dakar-Bamako
railway, which was previously the domain
of Malian Railways (RCFM) and the
National Railway Society of Senegal
(SNCS). The management of operations
was then entrusted to Canac (a company
of consultants and a train operator with
corporate headquarters in Montreal) and
Getma (France) who together acquired
51% of the shares of a consortium that
has taken the name Transrail SA.

If the SNCS has kept up passenger
transport for Dakar and its surroundings
out to Thiès, it is Mali that drew the
shortest straw in this affair: the RCFM
was dissolved, its employees lost their
positions, and passenger service (the
Kayes-Bamako-Koulikoro route) was
abandoned by Transrail.

RCFM, valued at CDN$275 million, was
let go for CDN$18 million, a sum payable
in seven years on the back of the rail line,
with a renewable concession for a period
of 25 years.

With dissatisfaction in full swing, the
Canadians at the heart of the railway
privatization chaos withdrew in 2007. Canac
was bought by the American company
Savage, which then sold its stake in Transrail
to the Belgian company Vecturis, who is
the new operator. Also in 2007, the Paris-
based Advens Group, directed by Abbas
Jaber, a close friend of Karim Wade—the
son of Senegal's President—became the
majority shareholder of Transrail, in addition
to having gotten his hands on the country's
strategic peanut and cotton sectors.

End Of the Line

An audit conducted in Paris, in December
2007 in collaboration with the World
Bank, Senegal, and Mali, estimated
Canac-Getma's deficit for the period
between 2003 and 2006 to be $20
million. With Vecturis at the helm of
Transrail, the deficit rose by $6.4 million
in the last months of 2007 alone. The
audit suggested that the states should
reinvest, but neither Senegal nor Mali is
ready to do so as they are already heavily
indebted.

In June 2008, the Ministries of Transport
of Senegal and Mali spoke out officially
on the state of the railway for the first time.
In a joint declaration, they conceded that
privatization had failed and spoke of the
“death of the railway business.” These
two states elaborated that, in five years,
Transrail had not succeeded in managing
the routes more efficiently than the former
national companies.

Transrail has never complied with the
conditions of its operating contract, which
was contingent upon an investment plan
for the maintenance and repair works on
the Dakar-Bamako line. To this day, such
a plan does not exist.

Now, Transrail is imposing a “rescue
plan,” which not only consists of massive
lay-offs, but insists that the states of
Senegal and Mali pay $22 million. With
this money, Transrail claims it will be able
to make an emergency investment and
begin the process of recapitalization.

Meanwhile, for Malian users, things
continue to deteriorate. Mohamed
Tabouré an activist with Cocidirail,
laments, “Our political leaders are hand
in glove with the multinational companies
and this is why they comply with their
demands and are careful not to take
action.” Cocidirail advocates “integrated
development” whereby Mali and Senegal
reappropriate the railway and make it an
instrument for community development.
For this to occur, a total takeover of the
transport of passengers and goods by
the state would be necessary.

However, such a renationalization is
unlikely to take place. The privatization
of the National Telecommunications
Company of Mali (SOTELMA) is
underway, and a law passed in August by
their Parliament, under pressure from the
World Bank, authorizes the privatization
of the Malian Textile Development
Company, which manages the nation's
cotton spinnerets. Yet this industry ranks
first in exportable goods and is profitable
for the state.

Have they missed the moral of the story?

Myriam Cloutier is a contributor to
Alternatives' French-language edition.

Photo: flickr / ROADSIDEPICTURES
Illustrated by: GEORGE & DORIS HAUMAN

Alternatives International

The Little Engine That Couldn't