Southern African country seeks private transport support

By: Marcel Chimwala

The Malawi government is seeking private-sector companies to operate
water, air and railway transport services in the Southern African
country.

In the water transport sector, the government is seeking a
concessionaire to operate the State-owned Malawi Lake Services (MLS),
the biggest firm that manages water transport services on Lake Malawi.

President Bingu wa Mutharika's
government wants a new private partner in MLS because it has severed a
20-year-old concession with Glens Waterways, which has only managed MLS
for six years, owing to "unsatisfactory performance".

"Over the
six-year period, a number of challenges were experienced, both on the
part of the government of Malawi and on the part of the operator. The
government of Malawi and Glens Waterways have reached a mutual
agreement to hand over the concession.

"We are now working to
identify a replacement for the concessionaire. The government's marine
department is taking charge of MLS while we wait for the identification
of the new operator," says Malawi Privatisation Commission information,
education and communication officer Chimwemwe Matonga.

The Malawi government is seeking investors into the air transport sector, with Finance Minister Goodall Gondwe saying that government has intensified its efforts to identify a strategic partner for the national flag carrier, Air Malawi.

"We
feel that the airline could be re-established [in such a way that]
government retains a 51% shareholding and a strategic investor holds
the remaining 49%. Government will, thus, have a majority on the board
of the airline. In pursuing this deal, we are looking at what other
countries, such as Nigeria, Kenya, Zambia and Ghana, have done," says
Gondwe.

Gondwe says the Malawi government feels introducing a
strategic partner in Air Malawi will help turn-around the fortunes of
the airline, which is failing to deliver reliable services and has
often failed to procure basic operational materials such as fuel
without government's support.

The Malawi government previously
tried to privatise Air Malawi and invited local and foreign companies
to bidders to acquire a controlling shareholding in the firm.

The
privatisation process, however, flopped because prospective bidders
found the airline unviable, which forced the government to continue
investing in the airline while pursuing the sale process in passive
mode.

"We now feel it is time to re-establish the airline as one
that provides the public with an efficient and reliable service
throughout the country and one that is not a burden on public
finances," says Gondwe.

In the railway sector, Gondwe says
government is seeking partners in the operation and rehabilitation of
the country's rail network.

He says government is engaged in
negotiations with the World Bank and the European Union (EU) to finance
the rehabilitation of some stretches of the rail network.

Gondwe
declines to reveal the actual cost of the rehabilitation excercise,
which is estimated to cost several millions of dollars.

"What I
can say from our discussions with the World Bank and the EU is that the
prospects that we will be funded are so good that the work to bring
rail transport in Malawi to normal operational standards can start next
year," says Gondwe.

The Malawi government is also carrying out a major road rehabilitation programme.

Notable
projects that are under way include the construction of the
Thyolo–Makwasa–Muona–Makhanga road, at an estimated cost of
$46,5-million, and the $40-million rehabilitation of the
Bangula–Nsanje–Marka, road in the southern region.

The Malawi
government is also carrying out the $59-million construction of the
Zomba-Jali-Phalombe road in the southern region and the construction of
the Karonga-Chitipa road in the northern region at a cost of
$45-million.

The rehabilitation and upgrading of the Masauko
Chipembere highway, in Blantyre, has also started, with funding from
the Japanese government to the tune of $15-million.

The major
road projects that Malawi's Ministry of Transport and Public Works has
lined up this year and are expected to cost millions of dollars include
the construction of the Mzimba–Kafukule–Njakwa and the
Jenda–Edingeni–Ewuthini–Rumphi roads in the northern region, and the
Lumbazi–Dowa–Chezi and Lilongwe Old Airport–Kasiya–Santhe roads, in the
central region.