MALAWI RAILWAYS REST

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The primary objective of the Railways Restructuring Project (RRP) is to contribute to Malawi's economic growth through: revitalizing the much shorter, less expensive, but poorly-operated Nacala rail route and increasing its share of Malawi's overseas traffic, thus, reducing the landed cost of exports/imports and enhancing Malawi's competitive advantage; and restructuring, commercialization and eventual privatization of Railways and Lake Services, enabling them to operate more efficiently and without depending on government subsidies, thus, reducing the drain on the national economy. The project comprises four components: 1) a restructuring component to be implemented by Malawi Railways (MR) includes the setting up of new railway and lake services companies to be called the Malawi Railways (1994) Limited (MR(M)) and the Malawi Lake Services Limited (MLS) respectively, transferring of assets and staff to the new companies, and gradual downsizing and final closure of the existing MR; 2) revitalization component, to be implemented by MR (M), includes commercialization of rail operations, eventual privatization of MR (M), extension of the services of the marketing and transit facilitation experts to Caminhos de Ferro de Mocambique (North) (CFM(N)) (N) to improve performance of the whole Nacala rail route, and setting up of institutional mechanisms for effective coordination with CFM (N); 3) Lake Services component to be implemented by MLS includes commercialization of its operations and eventual privatization of MLS's core activities; and 4) Transport Policy component includes developing a transport policy that would provide a framework for efficient operations with particular emphasis on restructuring and privatization of transport parastatals, and enhancing institutional capacity for analyzing the performance of the transport sector and providing adequate response.