Does Zimbabwe really need a new railway regulatory authority?

Sep 25, 2012

The National Railways of Zimbabwe are a government owned company and a monopoly. The company and its services are now a sad mere shadow of what they onc were. For many years there has been much talk of ‘re-capitalizing’ the railways but it has never happened. In any case the industry that once powered the railway company is floundering. There has been no suggestion that there is an interest or a possibility of private players competing with the NZR in the direct provision of railway services. So why on earth does a government minister say that a regulatory body is being considered?

Govt mulls railway regulatory authority in the Newsday paper of September 25 said the proposed authority would ‘formulate, monitor and evaluate the railways industry.’

The report says the body’s functions ‘would entail monitoring access and equipment contracts between infrastructure entity and operators, safeguarding and promoting interests of customers by protecting competitive and efficient rail transport.’

Unless there are big new investments we have yet to be told about that are expected in what remains of Zimbabwe’s railway ‘industry,’ this proposed new body would seem to be completely un-necessarily and a waste of time and resources. The pompously wordy functions attributed to it tell nothing about any useful new contributions that it will make that justify the creation of a new institution.

With an industry that is now a fraction of what it was in the glory days of the NRZ, what value is the new body going to add? What is it that the authority will do that cannot be done by the effective authority now, the ministry under which the NRZ falls?

When you here the phrase ‘regulatory authority’ in Zimbabwe, someone in government has come up with the brilliant idea to raise revenue by charging one new levy or another. A good bet is that the authority may not contribute anything to resuscitating Zimbabwes’s once glorious railway service, but will probably have powers to squeeze more money out of whatever commercial users of the NRZ remain. In other words, it is the old tried and true Zimbabwean government formula of thinking of raising money without increasing productivity or providing any useful new service or product.

Indeed, Newsday reports that the railway authority ‘would be self-financing and run along commercial lines. It will derive its revenue mainly from rail service providers licensing fees, concession fees, inspection or audit fees and government grants or loans.’

If the NRZ, the main (only?) significant ‘rail service provider’ in the country cannot pay its salaries or maintain its trains, buildings and other properties, what revenue cannot it be expected to provide? It needs to be helped or dismantled and sold off, not bled even further dry. As for the various customers of NRZ who the government may really have their eyes on to squeeze for various charges, when the NRZ is struggling to provide them minimal services, is this not just chasing away those customers, making them consider other forms of transporting their goods?

It is a mindset that is applied in all sorts of ways small and large, to compensate for the fact that the government has failed to raise its own income by creating economic conditions that encourage more local and foreign investment which can then generate taxes and many downstream benefits.

It reflects depressing old fashioned, lazy and failed thinking on the part of the government on how to address the great challenges of reviving the country’s dilapidated infrastructure and of creating real economic growth based on concrete new services and products people would be happy, eager to pay money for.

The idea of regulation of any industry is good, but in this case there is little or nothing to regulate. The great challenge facing the railway ‘industry’ is how to prevent it from dying off completely, how to make it attractive to transporters again. If and when that basic task can be achieved, then they might actually be an ‘industry’ to regulate!

But what a minute, let’s not under-estimate the government. It turns out that they actually do have a brilliant plan to create a railway ‘industry’ of several players.

How? Easy, simply ‘unbundle’ (popular Zimnglish business jargon) the crumbling NRZ, thereby creating no less than ‘three companies dealing with infrastructure, freight and passenger services whose operations and management will be totally divorced from each other.’

And that’s how you instantly, miraculously create a brand new ‘industry,’ complete with a spanking new ‘regulatory authority!’

It would all be side-splittingly funny if it wasn’t so sad.

However, the new authority might not be a complete waste of time. In the Zimbabwean style, the new bureaucracy will be set up with it’s top officials having what the local media likes to refer to as ‘top of the range’ cars, and enjoying many other perks that executives in the productive sector would be envious of.

The minister concerned feels more powerful by having yet another important-sounding bureaucracy under his portfolio, a few (or many) people are employed for some time and the illusion of activity, of progress is maintained. But it is the movement of going around in circles in one place, rather than of moving forward.

It is a sad insight to the government’s whole attitude to ‘development’ and to running an economy.

The Zimbabwe Review


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