TRANSNOMICS in effect is a philosophy to anchor transport sector policy development for comprehensive contextualization of the desired enabling environment for operational excellence, quality service provision and competitive market practices and industry development. TRANSNOMICS facilitates for a rail ecosystem of backward and forward linkages in support of rail development in terms of capacity, operational efficiency and its effective contribution to social and economic development. Good and Bad Rail Concessions can therefore be determined through the TRANSNOMICS lens.
Rail Concessions are a type of franchise economic regulatory regime. According to Investopia.com, a franchise is a type of license that grants a franchisee access to a franchisor’s proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor’s business name. Rail Concessions are franchise arrangements pioneered in South America, particularly in Brazil and Argentina. Sampaio, Daychoum (2017) among others have researched and provided a comprehensive record of the rail regulatory reform in Brazil. For the African continent, the African Development Bank (AfDB) study, Diagnostic study of railway concessions in Sub-Saharan Africa conducted by ALG (2014) and AfDB paper titled, Rail Infrastructure in Africa: Financing Policy Options espoused on most of the Rail Concession Agreements and practices undertaken in Africa.
Most of the cited work reported among other cases provides a record of the practice of Rail Concessions so far experienced and several policy recommendations made in the respective context and governance setup. The recorded practices are not structured for a simple copy and paste into other economies or country setup though some countries seem to have “pasted”. The norm, for most governments, has been to consider Concessions as a means of RISK TRANSFER of ailing rail system to the private sector. Public Sector Interests and Private Sector interests on railways widely differ and Rail Systems development and risk management cannot simply be transferred from one interest group to the other. This norm must be interrogated with a more pragmatic economic contextualization of the value of rail systems. There is a need to go beyond the traditional financial and economic feasibility and NPV considerations.
For the ‘TRANSNOMICS in effect’ perspective, identifying the characteristics of Good and Bad Concessionaire is by examining the following parameters:
- Purpose and scope of the Concession
- Socio-Economic Industry’s interface with the Concession
- Economic regulation of Rail Infrastructure and Operations of the Concession
- Rail Safety and Economic Regulator’s capacity to regulate the Concession
- Investment policy action to complement the Rail Concession
- Research and development action before and during the Concession
- Concession Risk Management Plan
- Vision clarity of the immediate Post Concession period
The TRANSNOMICS in effect lens of 8 parameters, when elucidated to a client’s context for comprehensive structuring and management of a Rail Concession will differentiate a Good from a Bad Concession. Get in touch if interested in evaluating and improving your Concession Agreement or Proposal.
Dr. Lubinda Mufalo Sakanga is a transport economist specialised in economic regulation, project and operations management. He has over 17 years of progressive transport sector experience gained at national and international levels. He worked in the public sector from 2006 to 2017 (Zambia) as a Senior Transport Economist position and progressively promoted to Assistant Director for Road and Rail. From 2017 to date, he serves the SADC region as Southern African Railways Association- Director Technical and Operations in charge of Programmes Coordination (Rail transport corridor development, policy, projects coordination and resource mobilization). Dr. Sakanga also provides transport, infrastructure, economic policy & operations management TRANSNOMICS consultancy services. His professional experience is complemented by astute academic qualifications: PhD degree in Operations Management under the Faculty of Engineering and the Built Environment of the University of Johannesburg in South Africa. He has developed a regional railway corridor economic regulatory framework for sustainable economic development in SADC. He has a Master of Science degree in Project Management from University of Salford, a Master of Arts Degree in Economic Policy Management and a Bachelor of Arts Degree in Economics from the University of Zambia. In addition, he holds professional certificates in Infrastructure and Public Private Partnership Financing, Road Management & Transport Technology, Business Accounting, amongst others. He champions the TRANSNOMICS philosophy.
