RAILWAYS IN DEVELOPING COUNTRIES: APRIL 2022 A A GLOBAL REVIEW MOBILITY AND TRANSPORT CONNECTIVITY SERIES RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW B MOBILITY AND TRANSPORT CONNECTIVITY SERIES © 2022 Transport Global Practice International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Internet: http://www.worldbank.org/transport Standard Disclaimer This work is a product of the staff of The International Bank of Reconstruction and Development / World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW i Contents Acknowledgments....................................................................................................................................................................... 1 Abbreviations and Acronyms..................................................................................................................................................... 2 Chapter 1: Overview of Railways......................................................................................................................... 3 Introduction................................................................................................................................................................................. 4 Institutional Models.................................................................................................................................................................... 5 Current Situation......................................................................................................................................................................... 6 Chapter 2: Railways in Latin America................................................................................................................ 13 Introduction............................................................................................................................................................................... 14 Institutional Structure.............................................................................................................................................................. 15 Current Situation....................................................................................................................................................................... 18 Chapter 3: Railways in the Commonwealth of Independent States and Mongolia............................................ 25 Introduction............................................................................................................................................................................... 26 Institutional Structure.............................................................................................................................................................. 27 Current Situation....................................................................................................................................................................... 28 Chapter 4: Railways in South Asia..................................................................................................................... 37 Introduction............................................................................................................................................................................... 38 Institutional Structure.............................................................................................................................................................. 39 Current Situation....................................................................................................................................................................... 40 Chapter 5:Railways in Southeast Asia............................................................................................................... 47 Introduction............................................................................................................................................................................... 48 Institutional Structure.............................................................................................................................................................. 49 Current Situation....................................................................................................................................................................... 50 Chapter 6: Railways in the Middle East, Caucasus, And Turkey ....................................................................... 57 Introduction............................................................................................................................................................................... 58 Institutional Structure.............................................................................................................................................................. 59 Current Situation....................................................................................................................................................................... 60 Chapter 7: Railways in North Africa ................................................................................................................. 69 Introduction............................................................................................................................................................................... 70 Institutional Structure.............................................................................................................................................................. 71 Current Situation....................................................................................................................................................................... 72 Chapter 8: Railways in Sub-Saharan Africa ...................................................................................................... 79 Introduction............................................................................................................................................................................... 80 Institutional Arrangements..................................................................................................................................................... 82 Current Situation....................................................................................................................................................................... 84 ii MOBILITY AND TRANSPORT CONNECTIVITY SERIES Appendices........................................................................................................................................................ 95 Appendix A: Developing Country Railway Database............................................................................................................ 96 Appendix B: List of Main Data Sources.................................................................................................................................100 Figures Figure 1.1. Railway Networks by Region and Gauge.............................................................................................................. 6 Figure 1.2. Railway Traffic Units by Regions............................................................................................................................ 7 Figure 1.3. Median Railway Passenger and Freight Rates by Region................................................................................... 8 Figure 1.4. Median Railway Traffic Density by Region........................................................................................................... 9 Figure 1.5. Median Railway Labor Productivity by Regional .............................................................................................. 10 Figure 1.6. Median Index of Rail Quality for 2017–2018 by Region.................................................................................... 11 Figure 2.1 Private Sector Participation (PSP) in Latin American Railways Since 1990..................................................... 15 Figure 2.2. Management Models in Privately Managed/Concessioned Railroads in Latin America.............................. 16 Figure 2.3. Railway Route-Kilometers in Latin American Countries, 2018......................................................................... 18 Figure 2.4. Railway Traffic in Latin American Countries, 2018............................................................................................ 19 Figure 2.5. Average Railway Tariffs in Latin American Countries, 2018............................................................................. 20 Figure 2.6. Rail Traffic Density in Latin American Countries, 2018..................................................................................... 21 Figure 2.7. Railway Labor Productivity in Latin American Countries, 2018....................................................................... 22 Figure 2.8. Index of Railroad Infrastructure Quality in Latin American Countries, 2017–2018...................................... 23 Figure 3.1. Railway Route-Kilometers in the CIS and Mongolia, 2018................................................................................ 29 Figure 3.2. Railway Traffic in the CIS and Mongolia, 2018................................................................................................... 30 Figure 3.3. Average Railway Tariffs in the CIS and Mongolia, 2018 ................................................................................... 31 Figure 3.4. Railway Traffic Density in the CIS and Mongolia, 2018..................................................................................... 32 Figure 3.5. Railway Labor Productivity in the CIS and Mongolia, 2018.............................................................................. 33 Figure 3.6. Indexes of Rail Quality in the CIS and Mongolia, 2017–2018............................................................................ 34 Figure 4.1. Railway Route-Kilometers in South Asian Countries, 2018.............................................................................. 40 Figure 4.2. Railway Traffic in South Asian Countries, 2018.................................................................................................. 41 Figure 4.3. Average Railway Tariffs in South Asian Countries, 2018.................................................................................. 42 Figure 4.4. Railway Traffic Density in South Asian Countries, 2018.................................................................................... 43 Figure 4.5. Railway Labor Productivity in South Asian Countries, 2018............................................................................. 44 Figure 4.6. Indexes of Rail Quality in South Asian Countries, 2017–2018.......................................................................... 44 Figure 5.1. Railway Route-Kilometers in Southeast Asian Countries, 2018–2019............................................................. 50 Figure 5.2. Railway Traffic in Southeast Asian Countries, 2018–2019................................................................................ 51 Figure 5.3. Average Railway Tarrifs in Southeast Asian Countries, 2018–2019................................................................ 52 Figure 5.4. Railway Traffic Density in Southeast Asian Countries...................................................................................... 53 Figure 5.5. Railway Labor Productivity in Southeast Asian Countries, 2018–2019........................................................... 53 Figure 5.6. Indexes of Rail Quality in Southeast Asia Countries, 2017–2018..................................................................... 54 Figure 6.1. Railway Route-Kilometers in the Middle East, Caucasus and Turkey, 2018–2019......................................... 62 Figure 6.2. Railway Traffic in the Middle East, Caucasus and Turkey, 2018–2019............................................................ 63 Figure 6.3. Average Railway Tariffs in the Middle East, Caucasus and Turkey, 2018....................................................... 64 Figure 6.4. Railway Traffic Density in the Middle East, Caucasus, and Turkey, 2018–2019............................................. 65 RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW iii Figure 6.5. Railway Labor Productivity in the Middle East, Caucasus, and Turkey, 2018................................................ 65 Figure 6.6. Indexes of Rail Quality in the Middle East, Caucasus, and Turkey, 2017–2018.............................................. 66 Figure 7.1. Railway Route-Kilometers in North African Countries, 2018–2019................................................................. 72 Figure 7.2. Railway Traffic in North African Countries, 2018–2019..................................................................................... 73 Figure 7.3. Average Railway Tariffs in North African Countries, 2018–2019..................................................................... 74 Figure 7.4. Railway Traffic Density in North African Countries, 2018–2019...................................................................... 75 Figure 7.5. Railway Labor Productivity in North African Countries, 2018–2019............................................................... 76 Figure 7.6. Indexes of Rail Quality in North African Countries, 2017–2018....................................................................... 77 Figure 8.1. Public vs. Private Sector Participation in Railways Across Sub-Saharan Africa............................................. 82 Figure 8.2. Railway Network, by Country, in Sub-Saharan Africa....................................................................................... 85 Figure 8.3. Railway Network by Region and Gauge in Sub-Saharan Africa....................................................................... 85 Figure 8.4. Railway Traffic in Sub-Saharan Africa................................................................................................................. 86 Figure 8.5. Railway Average Tariffs in Sub-Saharan Africa.................................................................................................. 88 Figure 8.6. Railway Traffic Density in Sub-Saharan Africa................................................................................................... 89 Figure 8.7. Railway Labor Productivity in Sub-Saharan Africa ........................................................................................... 90 Figure 8.8. Railways Indexes of Rail Quality in Sub-Saharan Africa, 2017–2018 .............................................................. 92 Maps Map 2.1. Railways in Latin American Countries.................................................................................................................... 14 Map 3.1. Commonwealth of Independent States and Mongolia Railways ....................................................................... 26 Map 4.1. Railways in South Asia.............................................................................................................................................. 38 Map 5.1. Railways in Southeast Asia....................................................................................................................................... 48 Map 6.1. Railways in the Middle East, Caucasus, and Turkey.............................................................................................. 58 Map 7.1. Railways in North Africa .......................................................................................................................................... 70 Map 8.1. Railways in Sub-Saharan Africa............................................................................................................................... 81 Tables Table 2.1. Product Market Regulation Scores for Latin American Countries, for 2020................................................... 17 Table 3.1. Product Market Regulation Scores for CIS Countries, 2020............................................................................... 28 Table 6.1. Product Market Regulation Scores in the Caucasus, Israel, and Turkey, 2020............................................... 60 RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 1 Acknowledgments This report was prepared by a World Bank team led by Aditi Raina, Public-Private Partnerships Specialist, and Martha Lawrence, Senior Transport Specialist, with contributions from consultants Richard Bullock, Karim- Jacques Budin, and Vasile Olievschi. The team would like to thank Vivien Foster, Chief Economist for Infrastructure, and Binyam Reja, Global Manager for Transport, for their overall guidance in preparing the report. In addition, the team is grateful to Atul Agarwal, Senior Transport Specialist, Antoine Kunth, Senior Railway Specialist, Chanin Manopiniwes, Senior Infrastructure Economist, Gregoire F. Gauthier, Senior Transport Specialist, and Hisham Mahmoud Fouad, Senior Transport Specialist, for their inputs to the regional chapters. 2 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Abbreviations and Acronyms CIS Commonwealth of Independent States DRT Department of Rail Transport (Thailand) ENR Egyptian Railway GCC Gulf Cooperation Council GHG greenhouse gas IBRD The International Bank for Reconstruction and Development ME Middle East NPV net present value NTKM net ton-kilometer (metric) OECD Organisation for Economic Co-operation and Development ONCF Moroccan Railway OSJD The Organisation for Cooperation of Railways PKM passenger-kilometer PMR product market regulation PPP purchasing power parity SA South Asia SEA Southeast Asia SNCFT Tunisian Railway SRT State Railways of Thailand SSA Sub-Saharan Africa TAZARA Tanzania–Zambia Railway TEU twenty-foot equivalent unit VNR Vietnam Railways VRA Vietnam Rail Authority WEF World Economic Forum Chapter 1: Overview of Railways 4 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction As a green mode of transportation, railways have could be useful for analysis and comparisons across an important role to play in decarbonizing transport regions. The data have been collected from various through shifting transport from more polluting public sources—annual railway or regulator reports modes of transport such as road and air. Railways and/or national statistical annuals. Most data are for can enable economic growth, which in turn generates 2018. increasing transport demand, while keeping The report covers railways providing services to the greenhouse gas (GHG) emissions low. However, in general public in 77 countries. Not included are the many parts of the world, railways have lost traffic railways in most higher income countries (North and market share to air and road transport modes. America, Europe, Australasia, and northeast Asia), As countries seek to reduce their GHG emissions, private mining railways and China, whose railway while still delivering on economic growth, many are network has been covered in numerous other reports rethinking the role of rail. (Lawrence, Bullock, and Liu 2019). The information Many developing countries have existing railway shared in this report is presented in seven regional networks, which will provide the starting point for summaries, which group together railways sharing a efforts to increase rail in the transport mix. This common geographic area and other characteristics: report provides a basic stocktaking of those railways, South America; Sub-Saharan Africa; South Asia; explaining the industry structure and the current Southeast Asia; the Commonwealth of Independent situation. Basic data on network size; volume; States (CIS) and Mongolia; and the Middle East. passenger fares and freight tariffs; labor productivity; These summaries include basic data on institutional network density; and perceived service quality assets, arrangements. traffic, pricing and staffing have been compiled into the Developing Country Rail Database, which RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 5 Institutional Models One hundred years ago, rail (and inland waterways railways ceasing operations, while some others were in some areas) held a near monopoly on long- and concessioned under a range of conditions. In both medium-distance land-based transport for both Latin America and Africa, long-distance passenger passengers and freight. As transportation became services have almost disappeared in the face of more motorized, the dominance of rail began to bus competition. A more detailed discussion of the erode. After World War II, this decline accelerated in concessions is given in separate regional reports. many countries as investment in roads and domestic In the CIS, long-distance road transport was limited aviation services increased. Despite changing until after 1990, and railways carried large volumes market conditions, rail institutional structures and of traffic. Though rail traffic fell sharply after 1990, it management models remained relatively unchanged. has since recovered in most countries. Because of the As a result, was that the finances of many railways large distances and volume of bulk traffic, many of became increasingly fragile, and railways became the railways have continued to operate successfully. increasingly dependent on governments—at first for While some rail networks have continued to thrive investment funds and then for operating support while operating widespread passenger services, as well. In some countries, this deterioration proved some smaller ones needed to make significant fatal. In others, railways survived but were little adjustments to ensure a sustainable future. better than walking wounded. Eventually this led to Most railways in Southeast Asia, except for Thailand, fundamental changes in how governments managed were built by colonial governments and remained railways, with a wide range of solutions adopted to as government railways following independence. improve the situation. Currently, they all now require some form of financial As can be seen in the regional chapters, these support, both to continue to operate substantial methods varied between regions and countries. In passenger services as well as contribute to much of Latin America, many of the earliest railways infrastructure maintenance. were built as concessions. As the rail concessions Three of the four railways covered for South Asia expired, state railways took over operations; comprised parts of the same system until Indian however, these were subsequently often converted independence in 1947. Since then, they have all again to concessions (and in one country reconverted continued as, effectively, government departments a second time back to state ownership). In Africa, under the control of a Ministry of Railways. Although most of the railways were built by colonial powers Indian Railways has been financially self-supporting to link internal regions with ports. The departure of (except for some investment), those in Pakistan, the colonialists saw most of these railways become Bangladesh, and Sri Lanka require substantial government railways, which, in many cases, soon government support. languished. Furthermore, as road competition grew, operating subsidies were reduced—causing Further details on the arrangements in each region maintenance to be chronically deferred—and are provided in the chapters for each region. investment funds dried up. This led to a number of 6 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Current Situation Networks Most of these networks are single-track railways, except for busier sections in suburban areas or in The 77 railways covered in this report accounted sections with heavy passenger and freight volumes for, at the end of 2019, a total of 424,009 route- (principally India, Ukraine, and Kazakhstan). About kilometers,1 more than the total rail networks of 29 percent of the networks are electrified, but this North America, or of Russia and China combined varies from more than 43 percent in South Asia (figure 1.1). and the CIS and 27 percent in the Middle East, to Although standard gauge (1,435 millimeters or 4 under 5 percent in Latin America and Southeast feet, 8.5 inches) represents the dominant gauge in Asia. This partly reflects the density of traffic carried Europe, North America, and China, this is far from (because the economics of electrification improve as the case elsewhere. The largest networks are 1,520 volume increases) and partly the cost of diesel in the millimeters (5 feet) with 141,353 route-kilometers countries concerned. in the CIS, 1,676 millimeters (or 5 feet, 6 inches), Network standards and infrastructure conditions vary principally in India, Argentina, and Brazil, followed substantially from country to country. In general, the by meter gauge (1,000 millimeters) in Latin America, greater the traffic volumes, the higher the standards Southeast Asia, and Africa. Much of Africa, and and the better the condition. Many low-volume especially the extensive Southern Africa network, railways (with densities of 1 million net tons or less) uses the eponymous Cape gauge (1,067 millimeters have long sections of track that require repair or or 3 feet, 6 inches) or meter gauge. Standard gauge replacement. Others have nonoperational sections is found in Mexico, the Middle East, and some new, that will require rehabilitation before any operations recently constructed lines in Africa. can recommence. Even where services are operated, Figure 1.1. Railway Networks by Region and Gauge 140,000 120,000 Network length (kilometers) 100,000 80,000 60,000 40,000 20,000 0 Latin America CIS South Asia Southeast Asia Middle East Sub-Saharan North Africa Africa 1,600 to 1,676 mm 1,520 mm 1,435 mm 1,067 mm 760 to 1,000 mm Source: See appendix A for country-level raw data and appendix B for country-level source information. Note: mm = millimeter; CIS = Commonwealth of Independent States. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 7 poor track conditions force speed restrictions, By far the greatest passenger demand of the resulting in a loss of railway competitiveness and countries studied (in terms of passenger-kilometers) rollingstock productivity. Signaling similarly ranges is in South Asia, and specifically in India, which from modern automatic signaling on high-volume represents 95 percent of the regional total. The only networks to manual systems adequate in terms of significant passenger services in Latin America are capacity, but vulnerable from a safety viewpoint. suburban services in Argentina, Brazil and Chile. CIS Communications show similar variations. passenger traffic is mostly in Ukraine, with Southeast 140,000 Asian passenger traffic primarily in Indonesia. Middle Many low-volume, general-purpose railways are confronting major challenges associated with aging East passengers are primarily in Iran, and African 120,000 infrastructure, for which the cost of rehabilitation passengers are predominantly on the South African Network length (kilometers) is large compared to the existing suburban networks. 100,000 traffic volumes and revenues. How to rehabilitate the lines on a Freight traffic is more evenly distributed, but Russia 80,000 faced by many such sustainable basis is the key issue and India remain the countries with the largest railways. task in terms of net ton-kilometers. Freight in Latin 60,000 America is dominated by Brazil, which carries about Traffic 80 percent of the total, 60 percent of which is export 40,000 iron-ore traffic. Mexico carries much of the remaining In total, these railways carried 4.9 billion tons (4.7 20,000 freight. CIS freight is largely in Russia, Kazakhstan, trillion net ton-kilometers) of freight and 13 billion Ukraine and Belarus. in Africa, South Africa’s network passengers (1.5 trillion passenger-kilometers) in their 0 is by far the most heavily used, with its specialist coal last reported year. These railways range in traffic CIS Latin America South Asia Southeast Asia Middle East Sub-Saharan North Africa and ore export routes. Africa from the small West African railways carrying a few 1,520 1,600 to 1,676 mmMost mm 1,435 national mm are railways 1,067 mm 760 relatively to 1,000 small, mm only with hundred thousand tons and almost no passengers, to India, with 1.2 billion tons and more than 8 billion 20 railways out of the 74 reviewed carrying more passengers in 2018 (figure 1.2). than 10 million traffic units per year. Russia and India Figure 1.2. Railway Traffic Units by Regions 3,500 3,000 2,500 Traffic units (billions) 2,000 1,500 1,000 500 0 Latin America CIS South Asia Southeast Middle East Sub-Saharan North Africa Asia Africa Passenger-kilometers Net ton-kilometers Source: See appendix A for country-level raw data and appendix B for country-level source information. Note: CIS = Commonwealth of Independent States. 8 MOBILITY AND TRANSPORT CONNECTIVITY SERIES carry this volume of traffic every two days, and other Pricing large railways such as those of Brazil, Ukraine and Kazakhstan handle this every one to two weeks. Almost all passenger services face strong competition from buses and shared taxis in both price and Most railways carry passenger traffic to some extent; service frequency. Few corridors remain in which however, in many countries the nonurban passenger rail passenger services are the only effective means business has declined and several of the smaller of transport, and although some main lines have railways that retain a reasonable passenger business been upgraded—with modern rollingstock providing only do so because competing road networks either faster services—this is far from the norm. Bus fares do not exist or are in very poor condition. While are typically 30 percent to 50 percent higher than international services survive in networks such as the economy rail fares (which range from US$0.01 to those of the CIS, they face strong competition from US$0.03 per passenger-kilometer) (figure 1.3). But on budget airlines. In Africa, the only significant cross- many routes, buses are faster (sometimes twice as border passenger flows operate on the Sitarail, fast), with generally a much higher service frequency. Transrail, and Tanzania-Zambia Railway Authority Although rail is generally perceived as safer and, on (TAZARA) networks. some routes, allows the carriage of large quantities Most railways outside South Asia and Southeast Asia of produce and baggage, buses typically have the carry far more freight than passengers. Although lion’s share of the market. On a purchasing power many railways are dominated by bulk and semi- parity (PPP) basis, the median tariff is US$0.051 bulk commodities, service level is an important per passenger-kilometer, rather lower than typical consideration for many shippers. Only a limited European prices; however, all such comparisons need number of railways have successfully managed to to be done with care, because of the variations in the be competitive in service, and this is increasingly level of service offered, both within countries and becoming a key factor in their long-term survival. between countries. Figure 1.3. Median Railway Passenger and Freight Rates by Region 8 US¢ per net ton-kilometer or passenger-kilometer 6 Passenger tariff (US¢/pkm) Passenger tariff 4 (US¢/pkm) (PPP) Freight tariff (US¢/ntkm) Passenger median 2 tariff (US¢/pkm) (PPP) Freight median tariff (US¢/ntkm) 0 Latin America CIS South Asia Southeast Asia Middle East Sub-Saharan North Africa Africa Source: See appendix A for country-level raw data and appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 9 Average freight tariffs range from US$0.01 to US$0.05 a railway. Traffic that needs to be transshipped at a per net ton-kilometer, 8 similar to tariffs on other central depot before being dispatched by rail is thus general-freight railways in comparable countries. more vulnerable to road competition, and even bulk Tariffs are generally constrained by competition, traffic is not immune to such competition if distances US¢ per net ton-kilometer or passenger-kilometer either from road transport or in some cases from are not too great. In numerous countries, collection 6 alternative rail routes. Tariffs are also influenced and distribution chains for many commodities are by the traditional value-based tariff structures, Passenger tariff being streamlined, often involving the elimination (US¢/pkm) length of haul, the relative cost of carrying different of upcountry depots and distribution centers, Passenger andtariff commodities4 (as reflected in net tons per wagon marketing channels have become more diversified. (US¢/pkm) (PPP) roundtrip), direction of travel and volume. However, in Railways have often been slow to respond, Freight tariff steadily spite of most rail rates being well below comparable losing market share, and this emphasizes (US¢/ntkm) the need Passenger median road rates,2 especially for traffic such as containers, rail for them to actively develop efficient multimodal tariff (US¢/pkm) (PPP) typically only carries 20 to 50 percent of the nonbulk services specifically designed for customer needs. Freight median tariff traffic in a corridor, and some of the smaller state- (US¢/ntkm) owned railways have a much smaller share. 0 Network density America Latinare Line-haul tariffs CIS of theSouth only part priceAsia Southeast Asia Middle East Sub-Saharan North Africa equation Africa is important because railways— Network density for freight traffic. Much is often made of the inherent especially railway infrastructure—have relatively lower cost of rail as compared to road. This is high fixed costs and low variable costs. For railway certainly true where minerals have to be transported infrastructure, the proportion of costs that are fixed from a rail-connected mine to a rail-connected port. will “differ by lines and traffic levels but rarely is But the advantage is less clear-cut for medium- estimated at less than 70 percent” (World Bank 2017) distance general freight, which is often transported and is often closer to 100 percent for low-density by road to and from the railheads. Haulage between lines. As a result, railway profitability is normally the railway and the ultimate origin and destination highly correlated with traffic density. Railways with can often cost up to the equivalent of 200 kilometers high dedicated flows thus tend to be more profitable to 300 kilometers of line-haul transport, negating any and financially sustainable. advantage rail may have in pure line-haul tariffs. New As shown in figure 1.4, traffic volumes on general- sidings are sometimes constructed, but such sidings purpose Sub-Saharan Africa (SSA) railways are low need a minimum traffic volume to be economical for Figure 1.4. Median Railway Traffic Density by Region 8 Traffic units per route-kilometer (millions) 7 6 5 4 3 2 1 0 Latin America CIS South Asia Southeast Asia Middle East Sub-Saharan Africa North Africa Median traffic density Source: See appendix A for country-level raw data and appendix B for country-level source information. Note: CIS = Commonwealth of Independent States. 10 MOBILITY AND TRANSPORT CONNECTIVITY SERIES and network densities (expressed as traffic units2 Productivity per route-kilometer) are correspondingly low. The Both labor and asset productivity (locomotive and highest median network traffic densities are in the wagon utilization) are low in many railways, due to the CIS and South Asia. Both Southeast Asia and the poor condition of the infrastructure and rollingstock, Middle East have median densities above 2 million low traffic levels, and government ownership. Almost traffic units, but both Latin America and Africa all railway companies have streamlined their work are well below 1 million. This does not mean no forces over the past 20 to 25 years. In Africa and Latin traffic exists in either of the latter two regions. The America, this was often the prelude to concessioning, Brazilian ore lines and the South African mineral but in some cases has also been part of a general policy lines are some of the busiest in the world; however, to improve efficiency. Despite this, labor productivity they also have extensive networks, much of which on many systems is relatively low by world standards, is carrying very little traffic. By comparison, in with the median for the railways in this review Europe most systems average 2 million to 5 million registering at just over 630,000 traffic units per staff traffic units, with densities below 1 million found per annum (figure 1.5). The low productivity often only in Albania and Montenegro. Many of the reflects use of labor-intensive methods with relatively railways covered in this report lightly used by world little outsourcing. But for many systems with very low standards. productivity, it is the consequence of traffic steadily Many networks struggle to generate enough funds declining without any adjustment to staff levels. With from their own resources to maintain and renew low wages in many of the countries, the direct financial their infrastructure as required. It is possible to impact is not always fatal. But a large body of staff who operate railways without external financial support are semi-employed has a corrosive effect on morale and at these densities, but not forever, and generally is a strong disincentive for those who wish to improve only with a low level of service. For low-value traffic, efficiency. It is also a powerful factor in limiting the this is not necessarily a problem, but for passenger general pay level of rail workers. Unless salary levels services and for higher-value freight subject to are competitive, railways find it hard to recruit and road competition, it is a very difficult task. If a retain technically competent staff or to introduce the government wants a reasonable level of service technology required to improve service levels, for which at such densities, it needs to provide ongoing a better paid and more skilled workforce is essential. financial support. The regional medians in figure 1.5 conceal large variations within the region. For example, the labor Figure 1.5. Median Railway Labor Productivity by Regional 1,500 Traffic units per employee (thousands) 1,000 500 0 Latin America CIS South Asia Southeast Asia Middle East Sub-Saharan North Africa Africa Median labor productivity Source: See appendix A for country-level raw data and appendix B for country-level source information. Note: CIS = Commonwealth of Independent States. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 11 productivity in India is at least three times higher of factors such as train size, commercial speed, and than in the other three South Asia systems. A clearer rollingstock utilization and availability. General freight picture is given in the report’s regional chapters, which can typically earn enough to make operating services present productivity for each country. worthwhile, but only in some cases can general freight fund the replacement of rollingstock, and very rarely Profitability can it earn enough to pay for infrastructure renewal. Most state-owned railways just about break even on Quality of service a cash basis, after receipt of government support. But often this is because a significant amount Finding an indicator of quality of service applicable of maintenance has been deferred. When the across all railways is difficult. If the public is surveyed, maintenance backlog becomes too great, it is typically their response will inevitably be in terms of passenger addressed using a grant from government or a loan, service, and this will also be the case with many 1,500 being treated as investment. with the expenditure businesses in the service sector. Manufacturers will Passenger services generally do not contribute consider the quality of the general freight service, Traffic units per employee (thousands) significantly to the cost of maintaining infrastructure either domestically or, more broadly, the handling 1,000 or to covering corporate overheads. Many passenger of import and export shipments. Manufacturers will services struggle to cover their marginal costs (train be primarily concerned with speed and reliability of crew, rollingstock maintenance, fuel and/or traction service, damage, and cargo security. Shippers of bulk electricity, and passenger handling costs). Passenger traffic will also weight cost as an important factor. 500 tariffs on many railways are government-prescribed, As illustrated in figure 1.6, the indicator adopted often within a framework that only includes a subset of for this study is the World Economic Forum (WEF) total costs. Even if they had freedom to set their own survey on the quality of railroad infrastructure for tariffs, many of the0more poorly performing systems 2017-18.3 The quality of railway service covers a wide Latin America CIS South Asia Southeast Asia Middle East Sub-Saharan North Africa would be unable to cover above-rail working expenses range of activities and, because the assessments are Africa on a systemwide level. Median labor done productivity by local businesses, consistency in the scores Freight services normally cover their avoidable is not guaranteed, although the order of magnitude operating costs. Some earn enough to also cover provides a general guide. rollingstock capital costs and even infrastructure costs. To provide some context for these indexes, the This is a function on the revenue side of the tariff rate United States scores 5.5, Germany 5.5, Japan 6.6, and and the average wagon loading and, on the cost side, Australia 4.1. Figure 1.6. Median Index of Rail Quality for 2017–2018 by Region 7 6 5 Index of rail quality 4 3 2 1 Latin America CIS South Asia Southeast Asia Middle East Sub-Saharan North Africa Africa Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. Note: CIS = Commonwealth of Independent States. 12 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Notes 1. This statistic measures the distance of the network. It does not take into account whether lines are single-track or double-track, nor does it include sidings and yards. 2. The traffic units carried by a railway are the sum of the passenger-kilometer and the net ton-kilometer. Although it has some limitations as an indicator (for example, a first-class passenger-kilometer in a high-speed train à grande vitesse (TGV) is treated identically to a passenger-kilometer in a crowded suburban train); it is a widely used, simple standard measure. 3. The quality of railroad infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country, based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of over 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References Lawrence, Martha, Richard Bullock, and Ziming Liu. 2019. China’s High-Speed Rail Development. International Development in Focus. Washington, DC: World Bank. https://openknowledge.worldbank.org/handle/10986/31801. WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. World Bank. 2017. Railway Reform: Toolkit for Improving Rail Sector Performance. 2nd edition. Washington, DC: World Bank. http://hdl.handle.net/10986/30734. Chapter 2: Railways in Latin America 14 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction This chapter presents a brief overview of the status northern and western regions of the country. Small of railways in Latin America. Argentina, Mexico, and sections of the Bolivian, Colombian, Costa Rican, and Brazil have substantial rail networks, while Chile has Peruvian networks are also still operational. Several a smaller one. Most operate under concessions or private, mining-related railways connect inland mines management agreements. All railways went through with ports on the Pacific coast (map 2.1). Mining and a period of network downsizing, but now major new tourist railways and not covered in this summary. lines are being constructed in Brazil to develop the Map 2.1. Railways in Latin American Countries Source: Map produced by the World Bank Geospatial Operations Support Team (GOST). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 15 Although freight services—some quite substantial— This chapter summarizes the key characteristics of operate in most countries, nonurban passenger the railways, as included in the Developing Country services are minimal; Brazil has almost none, Railway Database (appendix A). The data have been Argentina has a limited network, and Chile has a few collected from various public sources—annual services south of Santiago. Some other services are railway or regulator reports and/or national statistical predominantly for tourists or are remnants operating annuals; most data are for 2018. All median figures in areas with no or very few roads. Almost all shown in the graphs reflect the representative interurban public transport in these countries is now sample of railways included in this report and, done by air or bus. However, major urban railways importantly, the sample does not include some large operate in Buenos Aires and in the major Brazilian railway networks, including those in North America, cities as well as in Santiago. In most cases these Europe, and China. complement metro systems. Institutional Structure Few of the railways in Latin America were financed by been a success, as has Mexico. Argentina has had government, with most constructed as concessions, mixed results, with the government gradually predominantly financed by investors from the United taking back control of both the freight and urban Kingdom and the United States, and Figure 2.1 Private Sector Participation (PSP) in Latin American Railways subsequently nationalized. By the Since 1990 1950s, most countries had constructed large government-owned systems. THE BAHAMAS MEXICO However, the growth in good roads 5 Operators DOMINICAN REPUBLIC CUBA and competition from road transport, CAYMAN ISLANDS HAITI JAMAICA PUERTO RICO MARTINIQUE BELIZE ST. LUCIA from the 1960s onwards, combined HONDURAS ST. VINCENT AND THE GRENADINES GRENADA NICARAGUA GUATEMALA PANAMA TRINIDAD AND TOBAGO with limited financial support from the EL SALVADOR 1 Operator VENEZUELA GUYANA COSTA RICA 1 Operator government for rail, created a vicious SURINAME 1 Operator FRENCH GUIANA COLOMBIA 2 Operators circle of revenue decline, sharp falls in service quality, and a failure to maintain ECUADOR and renew both infrastructure and PERU 2 Operators rollingstock. In two cases (Ecuador and BRAZIL 12 Operators Paraguay) this cycle proved fatal, with BOLIVIA only a few tourist trains and local cross- South Pacific Ocean 2 Operators border services surviving. 1 PARAGUAY CHILE 5 Operators In most other countries, the decline ARGENTINA 6 Operators drove governments to restructure URUGUAY the railways into a series of Countries not covered in the study 1 Operator vertically integrated, regionally Railway operated by state railway company South Atlantic Ocean based concessions (figure 2.1).2 PSP projects planned or underway The concessions have proven more Part of rail network now under private management FALKLAND ISLANDS successful in some countries than in Railway now under private management Confidential others. Brazil has, broadly speaking, Source: Original map produced for this publication. Note: In Colombia, only one of the two is currently operational. 16 MOBILITY AND TRANSPORT CONNECTIVITY SERIES passenger concessions. Currently, Latin America operational and financial performance of the various has 41 freight railroad operators that provide public concessions in addition to other modes. Chile does service (figure 2.2 details the management models not. In Bolivia, the concession is monitored by a joint used by the different countries). Thirty-one of these transport and telecommunications agency, while operators are managed by the private sector (mostly other countries manage the concessions through the concessionaires) and 10 are state-owned companies. relevant government ministry. However, Colombia Bolivia, Peru, and Colombia have two concessions has created an independent agency that has yet to each (only one of which in Colombia is operational, start functioning. The regulatory bodies do not all solely for export coal), all disconnected and serving have the same powers, but typically are responsible separate regions in each country. In Panama, the for technical and economic regulation, accident railway has always been a concession, dating back to investigation, and arbitration of disputes. before the Panama Canal opened. Construction and reconstruction of infrastructure The railways in Uruguay and Venezuela have is generally funded by the government. The remained as integrated government-owned railways only exception is where lines are constructed for even though they carry comparatively little traffic. substantial volumes of mineral transport, as with The railway in Costa Rica is currently being revived the Carajas iron-ore line in Brazil and the coal line in and operates a commuter service as well as a small Colombia. freight service. For the past 25 to 30 years most Latin American Chile has a mixture: privately operated mineral lines railways have been concessioned. During that time, in northern Chile and a government-dominated some have thrived, others have survived, and still system in southern Chile. The privately operated lines others have collapsed and returned to government remain vertically integrated, but the government control. Sharp (2005) and Kohon and Abad (2021) system has a government-owned infrastructure provide detailed reviews of the situation as of 2005 and operations company, with third-party operators (10 to 15 years after concessioning) and as of now, allowed to access the network. including analyses of changes in traffic volumes and Brazil, Argentina, Peru, and Mexico all have specialist productivity. transport regulatory bodies that monitor the Figure 2.2. Management Models in Privately Managed/Concessioned Railroads in Latin America MANAGEMENT MODELS Vertically integrated with Open Access/vertically integrated Vertically integrated regulated competitive access (VI) with competitive access • Chile (open access) • Argentina • Peru (VI with competitive • Brazil • Mexico access) • Bolivia • Columbia (VI with • Panama competitive access) Commercial exclusivity Restricted commercial exclusivity Without commercial exclusivity Source: Kohon and Abad 2021. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 17 Suburban passenger rail services are operated in In 1998, the Organisation for Economic Co-operation 18 cities in Latin America (seven in Brazil, four in and Development (OECD) developed a set of Argentina, three in Chile, and one each in Costa indicators of product market regulation (PMR) Rica, Mexico, Uruguay, and Venezuela). Four of to measure a country’s regulatory barriers to the 14 commuter operators are private-sector competition and to track reform progress over time. concessionaires (two in Argentina, one in Brazil, and The PMR indicators measure the degree to which one in Mexico). policies promote or inhibit competition in markets Seven countries (Argentina, Bolivia, Brazil, Chile, for products and services, collecting information on Mexico, Peru, and Uruguay) have at least one long- how entry and behavior in the relevant sector are distance passenger service. In four of these countries regulated, and on the level of public ownership. They (Bolivia, Brazil, Mexico, and Peru), services are reflect the status of the existing laws and regulations, provided by freight concessionaires. though do not capture the level of enforcement. The values range between 0 and 6, from least to The history of concessioning in the region means most competition friendly regulatory regime. Table Latin American countries have received the highest 2.1 reflects the scores for the railway sector in Latin private investment in railway infrastructure among American countries, using the PMR methodology and all regions in the past three decades, amounting to inputs from a regional railway expert.4 a total of approximately US$68 billion. The highest investments have occurred in Brazil, followed by Argentina.3 Table 2.1. Product Market Regulation Scores for Latin American Countries, for 2020 Country PMR score Economic regulator Safety regulator Bolivia 3.43 Yes Independent Authority Yes Independent Authority Chile 3.00 No n.a. No n.a. Mexico 2.36 Yes Ministry Yes Ministry Peru 1.71 Yes Independent authority Yes Ministry Uruguay 3.00 No n.a. No n.a. Argentinaa 3.49 Yes Ministry Yes Ministry Brazila 3.22 Yes Ministry Yes Ministry Source: Original calculations based on the OECD product market regulation (PMR) methodology. For more information, see: https://www.oecd.org/economy/ reform/indicators-of-product-market-regulation/. Note: n.a. = not applicable. a. Argentina and Brazil are available in the original OECD 2018 PMR Database but have been recalculated based on the detailed responses available on the OECD website, to ensure uniformity in the scoring method (following the OECD schemata). 18 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Current Situation Networks At the end of 2019, the operating public networks in Latin America totaled about 76,000 kilometers, Railway development followed a similar pattern in even though all Latin American rail networks have almost all Latin American countries. Lines headed downsized considerably. Networks in individual inland from a port to reach a trading center or countries range from 41 kilometers in the smallest a mine. Branch lines were then built to serve operating public railway (Venezuela) to 23,000 route- developing areas, particularly in the rich agricultural kilometers in Brazil (figure 2.3).7 In addition to these or mining areas of Argentina, Uruguay, and Brazil. networks, privately operated mineral lines continue However, the improvement of the road system, to provide service, especially in Colombia, Chile, combined with changes in collection and distribution and Peru. Two lines in Brazil carry large volumes of networks, saw the loss of much of the shorter- iron ore as well as general freight and the only two distance traffic on such lines.5 Although there have intercity passenger services in the country (2,000 been grand master plans for more than a century, kilometers, included in figure 2.3). much of the South American network remains as Gauges are mixed, with 1,676 millimeters in disconnected lines, both between countries as well Argentina and parts of Chile; 1,600 millimeters in as within countries. Within the region, international Brazil; standard gauge (1,435 millimeters) in Uruguay, links connect Argentina, Uruguay, Brazil, Bolivia, and Venezuela, Mexico, Panama, parts of Argentina Paraguay (and theoretically also Brazil), but the only and Brazil, and some Andean lines; meter gauge in one line, between Brazil and Bolivia, handles any Argentina, Brazil, and the Andes; and Cape gauge significant traffic.6 (1,067 millimeters) in Costa Rica. Figure 2.3. Railway Route-Kilometers in Latin American Countries, 2018 35,000 30,000 Netowrk length (kilometers) 25,000 20,000 15,000 10,000 5,000 0 Argentina Bolivia Brazil Chile Costa Rica Mexico Panama Peru Uruguay Venezuela 1,676 mm 1,600 mm 1,435 mm 1,000 mm Source: See appendix B for country-level source information. Note: mm = millimeters; Route-kilometers in Costa Rica, Panama, and Venezuela are too small to register on the graph. The graph includes nonoperational lines. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 19 Many Latin American networks still operate freight such as agricultural products, steel, and at the standards to which they were originally cement. Brazil and Argentina also dominate the constructed. Almost all lines are single track; the passenger business, because of their heavy suburban exception is the suburban networks, which are passenger traffic. Some other Latin American cities 35,000 lines (see box 2.1.) Main- also the only electrified also operate (or have operated) suburban services, line infrastructure, where services operate under though these are generally only on one or two lines 30,000 commercial concessions, is generally in reasonable radiating from the capital cities (see box 2.1.) Netowrk length (kilometers) (and in many cases good) condition. Lines with lower 25,000 In total, excluding the iron-ore traffic in Brazil, traffic volumes have considerable sections requiring the railways annually carry over 250 billion net 20,000 repair or replacement, with speed restrictions ton-kilometers of freight and about 35 billion over long sections, resulting in a loss of railway 15,000 passenger-kilometers. competitiveness and rollingstock productivity. 10,000 Signaling ranges from very modern systems on the Pricing high-density commercially 5,000 profitable lines to much simpler and older systems on lower-density lines. Almost all remaining nonurban passenger services 0 face strong competition from buses and shared taxis Argentina Bolivia Brazil Chile Costa Rica Mexico Panama Peru Uruguay Venezuela Traffic in terms both of price and of service frequency, and very few corridors remain in which rail passenger Brazil is by far the most important freight railway services are the only effective means of transport. 1,676 (figure 2.4), even without the export of iron ore mm 1,600 mm 1,435 mm 1,000 mm Many of the average passenger fares are an upper (omitted from the figure but would represent an estimate, as they have generally been estimated additional 250 billion net ton-kilometers of freight). from typical published fares, which creates difficulties Much of the non-iron-ore traffic is bulk and semibulk Figure 2.4. Railway Traffic in Latin American Countries, 2018 180 160 140 120 Traffic units (billions) 100 80 60 40 20 0 Argentina Bolivia Brazil Chile Costa Rica Mexico Panama Peru Uruguay Venezuela Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. Note: Excludes 250 billion net ton-kilometers (ntkm) of Brazilian iron-ore traffic. 20 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Box 2.1. Suburban Railways in Latin America Argentina has a substantial suburban passenger network in Buenos Aires, with 950 route-kilometers, of which 257 kilometers are electrified. It operates a mixture of loco-hauled and multiple-unit services and carried 424 million paying passengers in 2018. The Buenos Aires subway carried an additional 330 million passengers. All the lines were at one time concessioned, but they have now all been brought back under government management. Brazil has about 700 route-kilometers of suburban networks in six cities, mostly operated by (Brazilian) state-owned railways. In total, they carry about 900 million passengers per annum. The largest by far is in São Paulo, with 678 million passengers in 2018, followed by Rio de Janeiro’s Supervia concession, with 163 million, and Recife, with 102 million. In Chile, the state-owned infrastructure and passenger concessionaire operates suburban services on two independent routes in Santiago and Valparaiso, with about 40 million passengers between them. Venezuela also operates a commuter service on one route in Caracas, reportedly carrying about 12 million passengers annually, and in Costa Rica three routes centered in San José currently carry about 3 million passengers per annum. Source: World Bank analysis. in allowing for season tickets or multimodal zonal Average freight tariffs on the major networks range tickets. The Peruvian average tariff is heavily from US$0.025 to US$0.08 per net ton-kilometer, influenced by the (essentially tourist) trains to Machu similar to tariffs on other general-freight railways Picchu. Figure 2.5 illustrates the average passenger in comparable countries. Tariffs are higher in Chile and freight tariffs for Peru and other Latin American (because of the topography), and for the small countries for 2018. volume of freight traffic in Uruguay. Tariffs are generally constrained by competition, principally Figure 2.5. Average Railway Tariffs in Latin American Countries, 2018 12 US¢ per net ton-kilometer or passenger-kilometer 10 Passenger tariff (US¢/pkm) 8 Passenger (US¢/pkm) (PPP) 6 Freight tariff (US¢/ntkm) 4 Median passenger tariff (US¢/pkm) (PPP) 2 Median freight tariff (US¢/ntkm) 0 Argentina Bolivia Brazil Chile Costa Rica Mexico Peru Uruguay Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). Passenger tariffs represent best estimates based on revenues and estimated passenger-kilometer. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 21 from roads, or in some cases from alternative rail before dispatching by rail is thus more vulnerable routes, and are also influenced by the traditional to road competition, and even bulk traffic is not value-based tariff structures, the relative cost of immune if distances are not too great. In many carrying different commodities (as reflected in net countries, collection and distribution chains are tons per wagon roundtrip), direction of travel, and 12 being streamlined, often involving the elimination US¢ per net ton-kilometer or passenger-kilometer volume. Although relatively few freight tariffs are of upcountry depots and distribution centers, and 10 passenger tariffs in some countries (for regulated, marketing channels have become more diversified. Passenger tariff instance, Argentina) are set by regulators. The railways have been slow to respond, resulting in (US¢/pkm) 8 a steadily declining market share. Passenger Line-haul tariffs comprise only part of the equation (US¢/pkm) (PPP) 6 traffic. Much is often made of the inherent for freight Freight tariff lower cost of rail compared to road. This is certainly Traffic density (US¢/ntkm) true where4 minerals have to be transported from a Median passenger Traffic density is important because railway tariff (US¢/pkm) (PPP) rail-connected mine to a rail-connected port but is infrastructure has relatively high fixed costs andtariff 2 Median freight not so clear-cut for medium-distance general freight, (US¢/ntkm) low variable costs. As a result, railway profitability is which is often 0 also transported by road to and from highly correlated with traffic density. Figure 2.6 gives Argentina Bolivia the railheads. Haulage between Brazil the Chile railway Costa Rica and the Mexico Peru Uruguay the traffic densities on the nonurban sections of the ultimate origin and destination can be expensive, networks, that is, excluding the suburban traffic, often as much as 200 to 300 kilometers of line-haul which is particularly high in Argentina and Brazil. This transport, negating any advantage rail might have graph excludes the iron-ore traffic in Brazil, to be in pure line-haul tariffs. New sidings are sometimes more representative of the average density on the constructed, but these require a minimum traffic network as a whole. It also excludes the coal export volume to be economical for a railway. Traffic line in Colombia operating under concession. that needs to be transshipped at a central depot Figure 2.6. Rail Traffic Density in Latin American Countries, 2018 8 7 Traffic units per route-kilometer (millions) 6 5 4 3 2 1 0 Costa Rica Venezuela Argentina Uruguay Panama Bolivia Mexico Chile Brazil Peru Median traffic density Source: See appendix B for country-level source information. Note: The graph excludes Colombia for which only a 150 kilometer private standard gauge line (out of the 3,300-kilometer railway network) is operating and transporting coal from Cerrejón mines to the port of Puerto Bolivar at Bahia Portete, with a freight traffic density of around 52 million ton-kilometers per kilometer. 22 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Network densities on five of the Latin American productivity. Panama’s labor productivity is lower networks (Brazil, Mexico, Colombia, Panama, than that of Brazil and Mexico, because of the short and Venezuela) each total more than 5 million average haul across the isthmus, with a much higher traffic units. The first four of these railways are proportion of time and effort spent in terminal concessioned, with all infrastructure and rollingstock loading and unloading. The other three networks investment financed by the concessionaires. have much lower levels of productivity, some of (Venezuela’s is a short government-owned suburban which are likely due to the much lower level of line.) The Peru network, also concessioned, has a investment in labor-saving assets over the past 40 density of about 2 million traffic units for operational years. sections, and most investment is financed by the Nevertheless, with the exception of Uruguay (which concessionaires. The remaining networks have low is almost moribund), labor productivity is certainly as traffic densities of about 500,000 or fewer traffic respectable as many railways elsewhere in the world. units. As is the case elsewhere in the world, most of these networks struggle financially. In some Quality of service cases, they rely on the government for funding of infrastructure maintenance and in nearly all cases for It is difficult to find an indicator of quality of funding of infrastructure investment. service applicable across all railways. If the public is surveyed, their response will inevitably be in Productivity terms of passenger service, and this will also be the case for many businesses in the service sector. Labor and rollingstock productivity (locomotive Manufacturers will consider the quality of the and wagon utilization) offer a similar picture to general freight service, either domestically or, more network density. Figure 2.7 presents estimated labor broadly, the handling of import/export shipments. productivity for 2018 in those networks for which Manufacturers will be primarily concerned with reliable employment data are available. speed and reliability of service, damage, and cargo The three networks with high traffic density security. Shippers of bulk traffic will also weight cost (Argentina, Brazil, and Mexico) all have high labor as an important factor. Figure 2.7. Railway Labor Productivity in Latin American Countries, 2018 7,000 Traffic units per employee (thousands) 6,000 5,000 4,000 3,000 2,000 1,000 0 Argentina Bolivia Brazil Chile Costa Rica Mexico Panama Uruguay Median labor productivity Source: See appendix B for country-level source information. Note: Data not available for Colombia, Peru, and Venezuela. 3,000 Traffic units 2,000 RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 1,000 23 0 Argentina Bolivia Brazil Chile Costa Rica Mexico Panama Uruguay The indicator adopted for this study is the World Median labor productivity of consistency in the scores, although the order of Economic Forum (WEF) survey for 2017 and 2018 magnitude provides a general guide. on the quality of railroad infrastructure (see figure To provide some context for these indexes, the 2.8).8 The quality of railway service covers a wide United States scores 5.5, Germany 5.5, Japan 6.6, and range of activities and, because the assessments are Australia 4.1. done by local businesses, they offer no guarantee Figure 2.8. Index of Railroad Infrastructure Quality in Latin American Countries, 2017–2018 7 6 5 Index of rail quality 4 3 2 1 0 Argentina Brazil Chile Colombia Mexico Panama Peru Uruguay Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. Note: Data not available for Bolivia, Costa Rica, or Venezuela. 24 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Notes 1. And, in the case of Colombia, a concessioned line is solely for export of coal. Paraguay has a small, isolated cross- border service with Argentina. 2. A vertically integrated railway has both infrastructure and operations managed by the same organization. A vertically separated railway has the organization managing the infrastructure being separate from that (or those) operating train services. In the separated case, the train operators pay access charges for the use of the infrastructure, similar in concept to the charges made on a toll road. Many variations on these two basic models exist. For example, in Brazil about 10 percent of the total operations are by one operator on the infrastructure of another. This can be by mutual agreement or as of right, depending on the legislation. 3. Data from the World Bank Private Participation in Infrastructure (PPI) Database (https://ppi.worldbank.org/en/ppi). 4. Argentina’s and Brazil’s responses are taken from the 2018 OECD Database. 6. The average distance freight is carried in Argentina is now 485 kilometers. In Brazil the distance (excluding iron ore) totals 822 kilometers, with the trains traveling about 1,000 kilometers. The longest distance on the Uruguay network is about 500 kilometers. 7. The link between Mexico and the United States carries a lot more traffic than any of the intraregional railway links. 8. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country, based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References Kohon, Jorge, and Julieta Abad. 2021. “25 Años de Concesiones Ferroviarias de Cargas En América Latina: ¿Qué Anduvo Bien? ¿Qué Anduvo Mal?” Inter-American Development Bank (IADB), Washington, DC. http://dx.doi. org/10.18235/0003184. Sharp, Richard. 2005. “Results of Railway Privatization in Latin America”. Transport Papers series no. TP-6. World Bank, Washington, DC. https://openknowledge.worldbank.org/handle/10986/17404. WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. Chapter 3: Railways in the Commonwealth of Independent States and Mongolia 26 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction This chapter presents a brief overview of the railways Kyrgyz Republic and Tajikistan) are very small, acting in the Commonwealth of Independent States (CIS) essentially as branches off the rest of the network and Mongolia. The CIS covers Belarus, Ukraine, (map 3.1). All remain state owned, with restructuring Moldova, Russia, Kazakhstan, the Kyrgyz Republic, ranging from substantial in Russia and Kazakhstan to Uzbekistan, Turkmenistan, and Tajikistan.1 All except very little for the smaller railways. Mongolia were formerly parts of the Union of Soviet The public Mongolian network,2 stretching from the Socialist Republics network, operating with common Russian border to the Chinese border, with a few technical standards and operating procedures. The short branches, is jointly owned by the governments Mongolian network also operated to these same of Russia and Mongolia, which alternate in appointing standards and procedures. Following the dissolution the general manager. This arrangement did not of the Soviet Union, the railways were transferred always suit the Mongolian government, which has to the individual countries, but have largely also created a 100 percent Mongolian state-owned continued to operate as before. Russia, Ukraine, and railway to develop new lines in the rest of Mongolia. Kazakhstan have very large networks carrying heavy All CIS and Mongolian railways have passenger traffic. The other railways are smaller, and two (in the Map 3.1. Commonwealth of Independent States and Mongolia Railways Source: Map produced by the World Bank Geospatial Operations Support Team (GOST). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 27 services; most are substantial. In the CIS, passenger statistics published by the Organisation for services are divided into long-distance and Co-operation between Railways (OSJD),4 but also prigorodne, which is often translated as “suburban.”3 including annual reports where available. Most data Relatively few of these services are urban commuter are for 2018. All median figures shown in the graphs services. Rather, they operate as regional passenger reflect the representative sample of railways included services (see box 3.1, later in the chapter). in this report and, importantly, that sample does not Chapter 3 summarizes the key characteristics of include some large railway networks, including those the railways, as included in the Developing Country in North America, Europe, and China. Railway Database (appendix A). The data have been collected from various public sources—principally Institutional Structure All CIS and Mongolian railways remain government own asset renewals and replacements. However, owned. The railways in Russia, Ukraine, Kazakhstan, the smaller ones are chronically short of funds and Uzbekistan are companies with independent for major maintenance, and the condition of their boards, while the others remain effectively infrastructure has been steadily deteriorating. government departments. The Ulan Bator Railway in Passenger fares, particularly for prigorodne services, Mongolia is a special case because it is jointly owned are kept low in most countries by government by Russia and Mongolia. policy and contribute little, if anything, to the cost Since 2003, Russian Railways has allowed private of maintaining the infrastructure. However, this operators of wagons to access the railway constraint often applies only to the lowest class of infrastructure using locomotives and crews travel, and several systems have introduced higher- provided by Russian Railways. While the law allows standard services that allow higher fares to be private operators to use their own locomotives and charged. Nevertheless, even these are insufficient to crews, this has not much materialized in practice. cover the infrastructure costs, and freight revenues Kazakhstan also allows third-party access, including are then required to cover the deficit. allowing operators to use their own crews and The opening of infrastructure to private operators locomotives. The principle has been agreed, but has brought considerable private investment in not yet implemented in Ukraine. The greatest rail rollingstock. Private investment in railway interest in third-party access has been shown by infrastructure is more limited. Only three countries producers and users of bulk materials, such as iron have seen private infrastructure investments in ore and coal. Kazakhstan and Moldova are currently the past 30 years: Kazakhstan, Uzbekistan (part- working toward separating their railways companies divestiture), and Belarus (part-divestiture) with one into separate infrastructure and train operating project each, amounting to a total of US$330 million.5 companies similar to the structure in the European In 1998, the Organisation for Economic Co-operation Union. A similar effort is also in its early stages in and Development (OECD) developed a set of Ukraine. indicators of product market regulation (PMR) The larger railways are financially self-sustaining, to measure a country’s regulatory barriers to in the sense that they can typically finance their competition and to track reform progress over time. 28 MOBILITY AND TRANSPORT CONNECTIVITY SERIES The PMR indicators measure the degree to which values range from 0 to 6, from the most to the least policies promote or inhibit competition in markets for competition friendly regulatory regime. Table 3.1 products and services, collecting information on how reflects the scores for the railway sector in CIS, using entry and conduct in the relevant sector is regulated, the PRM methodology and inputs from a regional and on the level of public ownership. The indicators railway expert.6 reflect the status of the existing laws and regulations but do not capture the level of enforcement. The Table 3.1. Product Market Regulation Scores for CIS Countries, 2020 Country PMR score Economic regulator Safety regulator Belarus 5.14 Yes Ministry Yes Ministry Kazakhstan* 3.00 Yes Ministry Yes Ministry Kyrgyz Republic 5.57 Yes Ministry Yes Ministry Moldova 5.57 Yes Ministry Yes Ministry Russia 3.43 Yes Independent authority Yes Ministry Tajikistan 5.57 Yes Ministry Yes Ministry Turkmenistan 5.57 No n.a. No n.a. Ukraine 4.29 Yes Ministry Yes Ministry Uzbekistan 5.57 Yes Ministry Yes Ministry Source: Original calculations based on the OECD product market regulation (PMR) methodology. For more information, see: https://www.oecd.org/economy/ reform/indicators-of-product-market-regulation/. Note: n.a. = not applicable. Current Situation Networks the Kyrgyz Republic and the Tajikistan networks have several isolated sections. Many international Prior to the breakup of the Soviet Union, the network connections exist within the region between the CIS of the CIS railways operated as a single system and Europe dating back a hundred years or more. with 30 regional networks. These regional railways Until 1991 there were only two connections between were subsequently grouped and divided to form the CIS network and China—one from Russia, part the various national railways.7 Many of the Central of the original Trans-Siberian Railway, and one via Asian lines zigzagged across national borders. Since Mongolia, constructed after World War II. A direct the 1990s, many new lines have been constructed connection with Kazakhstan was then opened at to ensure each country’s network is internally Alashanko, with a second crossing opening at Horgos connected as much as possible. However, both in 2018. These interchange points now handle the RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 29 majority (normally around 70 percent) of the China– tracking, electrification, and modern signaling. Europe rail traffic. Links also operate between Iran Russia operates higher speed—up to 250 kilometers and Turkmenistan, and recently a link was built per hour (kph)—passenger trains between Moscow, between Kazakhstan and Turkmenistan along the St. Petersburg, Helsinki, and Nizhny Novgorod. shores of the Caspian. Uzbekistan operates trains between Tashkent and At the end of 2018, the operating public networks Samarkand/Bokhara at 200 kph and Kazakhstan in the CIS and Mongolia totaled about 141,000 operates a service between Almaty and Nursultan. kilometers, of which the Russian network accounts However, these trains operate on upgraded for over 60 percent. It is all Russian gauge (1,520 conventional lines rather than new, dedicated millimeters to 1,524 millimeters). After Russia, the passenger high speed lines. Ukraine network is the largest (21,000 kilometers), The main-line infrastructure in the CIS network with 16,000 kilometers in Kazakhstan and 5,000 is generally in good condition, suited to the kilometers in both Belarus and Uzbekistan. The substantial traffic volumes carried. However, lack other networks are all under 2,000 kilometers (see of funds has caused the smaller railways and figure 3.1). some of the secondary lines to be maintained to lower standards, with resultant speed restrictions. Many parts of the Ukraine, Kazakhstan, Uzbekistan, Signaling ranges from very modern systems on and Belarus networks have been upgraded the high-density lines to much simpler and older significantly over the years, including double systems on lower-density lines. Figure 3.1. Railway Route-Kilometers in the CIS and Mongolia, 2018 90,000 80,000 Network length (kilometers) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan 1,520 millimeters Source: See appendix B for country-level source information. 3000 2500 ) 30 MOBILITY AND TRANSPORT CONNECTIVITY SERIES 90,000 80,000 Network length (kilometers) 70,000 Traffic neighboring countries or to seaports), 10 percent 60,000 is imports, and 10 percent is transit traffic (this last In total, the railways annually produce more than amount includes these railways’ share of the new 50,000 3 trillion net tons-kilometers of freight and over China–Europe traffic). Though generally modest, 40,000 190 billion passenger-kilometers. Russia carried road competition for the bulk traffic exists. Road over 80 percent of 30,000 this freight and two-thirds of the competition for general freight is strong—especially 20,000 by Kazakhstan and Ukraine passengers, followed for consumer goods—even over surprisingly long (figure 3.2). The railways 10,000 carry substantial amount distances. of mining products, building materials, oil and oil 0 Relatively high-standard long-distance passenger products, metals, and grains. services is offered between the major population Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan Because these railways were all part of an integrated centers, as well as the prigorodne services described economy in Soviet times, and many are landlocked in box 3.1. The prigorodne services generally with limited access to seaports, a considerable represent the majority of the passengers, but the amount of interchange traffic exists. Outside of 1,520 long-distance millimeters services carry a greater proportion of Russia, about 50 percent of the traffic in the region is the passenger-kilometers. Bus is a major competitor domestic (that is, wholly within a country’s borders), in all countries, as is air for the higher-standard about 30 percent is export (going to either to longer-distance services. Figure 3.2. Railway Traffic in the CIS and Mongolia, 2018 3000 2500 Traffic units (billions) 2000 1500 1000 500 0 Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 31 Box 3.1. Prigorodne Rail Services in the CIS Many lines in the CIS railways carry a daily or twice-daily passenger service, ordinarily provided by a multiple-unit train, which stops at all stations and effectively acts as a local bus service. In areas where roads are often poor, such services are cheap and reliable, although inevitably serving only a small proportion of the total rural population. In Ukraine, in 2018, such services (known there as priymiske) carried 104 million passengers compared to 47 million on the long-distance services. But because the average trip length on the priymiske services was 47 kilometers, compared to 243 kilometers on the long- distance ones, the priymiske services only represented 17 percent of the total passenger-kilometers. The prymiske services, which are about 80 percent of the train-kilometers in Ukraine, carried an average load in 2018 of about 120 passengers, compared to 330 in the long-distance category, and passengers paid about US$0.005 per passenger-kilometer compared to US$0.013 per passenger-kilometer for the long-distance service. Not surprisingly, the long-distance services recovered half their cost (including infrastructure), and the priymiske recovered barely 10 percent. Source: World Bank analysis. Pricing long-distance (which are predominantly sleeping-car services) and prigorodne services. In all countries, The passenger fares in figure 3.3 represent the differential between standard class and upper systemwide averages over all classes of passengers, class is significant, as is the difference between heavily weighted toward the standard (or economy) prigorodne and long-distance, as discussed in box class; they also represent an average of the 3.1. The average fares in all countries except Russia Figure 3.3. Average Railway Tariffs in the CIS and Mongolia, 2018 10 US¢ per net tonkilometer or passenger-kilometer 8 6 Passenger tariff (US¢/pkm) 4 Passenger tariff (US¢/pkm) (PPP) Freight tariff (US¢/ntkm) 2 Passenger median tariff (US¢/pkm) (PPP) Freight median tariff 0 (US¢/ntkm) Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). Average tariffs estimated from passenger and freight revenues, adjusted for nonrail wagon operators. Data not available for Tajikistan or Turkmenistan. 32 MOBILITY AND TRANSPORT CONNECTIVITY SERIES 10 and Belarus are quite low by world standards.8 tariffs are generally lower, as are export tariffs. Passenger tariffs for standard class in all countries Import tariffs are generally somewhat higher, as are US¢ per net tonkilometer or passenger-kilometer are controlled 8 by the government, and in many transit tariffs, especially if the traffics are captive. cases the only way for the railway to increase the Many transit tariffs also have the additional benefit of yield is to steadily limit the supply of the cheapest being denominated in Swiss francs, thus providing at trains6and thus encourage passengers to migrate to least a partial hedge against currency devaluations. higher-fare services. Government compensation for Passenger tariff the controlled tariffs is provided in Kazakhstan and Traffic density (US¢/pkm) 4 Passenger tariff in Ukraine (in theory9), but it is generally rather less railway (PPP) Traffic density is important because(US¢/pkm) than what the railways claim. Freight tariff infrastructure has relatively high fixed costs and (US¢/ntkm) 2 freight tariffs on the large networks range Average low variable costs. As a result, railway profitability Passenger median from US$0.01 to US$0.03 per net ton-kilometer, is normally highly correlated with traffic density. tariff (US¢/pkm) (PPP) similar to tariffs on other general-freight railways Fourmedian Figure 3.4 gives the traffic densities.Freight tariff railways 0 in comparable countries. Freight tariffs are heavily (US¢/ntkm) have a high network density, at 10 million traffic Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan influenced by the traditional value-based tariff units10 or more, although in the case of Mongolia structures, the relative cost of carrying different most of the freight is concentrated on a single line. commodities (as reflected in net tons per wagon Uzbekistan and Turkmenistan have densities of about roundtrip), direction of travel, and volume, and 5 million traffic units, but the others have average are generally controlled, at least broadly, by both network densities of 2 million traffic units or less. governments and by CIS-wide agreements for This is barely enough to fund their own renewals and international traffic. Often different tariff exist replacements. depending on the nature of the traffic: Domestic Figure 3.4. Railway Traffic Density in the CIS and Mongolia, 2018 35 30 Traffic units per route-kilometer (millions) 25 20 15 10 5 0 Turkmenistan Kyrgyz Republic Uzbekistan Kazakhstan Mongolia Tajikistan Moldova Belarus Ukraine Russia Median traffic density Source: See appendix B for country-level source information. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 33 Productivity low of traffic. Kyrgyz Republic and Tajikistan, which function as terminal railways, also have very short Labor and asset productivity (locomotive and wagon average line-haul distance. utilization) present a similar picture to network density. Figure 3.5 presents estimated labor Quality of service productivity for the networks covered in the review. It is difficult to find an indicator of quality of service Russia railway has the highest labor productivity, at applicable across all railways. If the public is nearly 5,000 traffic units per employee. However, surveyed, their response will inevitably be in terms of this figure is somewhat misleading because the passenger service, and this will also be the case with staff of freight wagon operators are not included in many businesses in the service sector. Manufacturers this figure. Kazakhstan has the next highest labor will consider the quality of the general freight service, productivity, at nearly 2.5 million traffic units per either domestically or, more broadly, the handling employee, reflecting its high proportion of trainload of import/export shipments. Manufacturers will be movements as well as its relatively limited passenger primarily concerned with speed and reliability of services. Mongolia also has high labor productivity, service, damage, and cargo security. Shippers of bulk in its case reflecting its very simple network and high traffic will also weight cost as an important factor. volume of bulk movements. Ukraine, Turkmenistan, and Belarus, which all have a mix of traffic types The indicator adopted for this study is the World as well as substantial passenger services, have Economic Forum (WEF) survey on the quality of productivities of about 1 million. The smaller railways railroad infrastructure for 2017 and 2018.11 The all have low productivities, a direct reflection of their quality of railway service covers a wide range of Figure 3.5. Railway Labor Productivity in the CIS and Mongolia, 2018 5,000 Traffic units per employee (thousands) 4,000 3,000 2,000 1,000 0 Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan Labor productivity Median labor productivity Source: See appendix B for country-level source information. 7 6 5 ality 2,000 Traffic units per e 1,000 34 MOBILITY AND TRANSPORT CONNECTIVITY SERIES 0 Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan activities and, because the assessments are done To provide some context for these indexes, the by local businesses, they offer no guarantee of Unites States scores 5.48, Germany 5.5, Japan 6.58, Labor consistency in the scores, although the productivity order of Median labor and Australia productivity 4.07. magnitude provides a general guide (see figure 3.6). Figure 3.6. Indexes of Rail Quality in the CIS and Mongolia, 2017–2018 7 6 5 Index of rail quality 4 3 2 1 Belarus Kazakhstan Kyrgyz Republic Moldova Mongolia Russia Tajikistan Turkmenistan Ukraine Uzbekistan Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 35 Notes 1. Two short extensions of the Uzbekistan and Turkmenistan networks, which are not covered in this report, operate over their national borders into Afghanistan. 2. The official name of this railway is the Ulan Bator Railway, but it is often referred to as the Mongolian Railway. It also includes a short network, disconnected from the main line, in eastern Mongolia. Confusingly, the Mongolian government created a separate (and 100 percent Mongolian-owned), which is intended to be a transport operator as well as a constructor of new lines serving the rest of the country. A privately owned mineral railway is also connected to the Ulan Bator Railway network. 3. This term refers to all services within 200 kilometers (and sometimes greater distances), most of which operate once or twice daily along almost every line in the network, generally stopping at all stations. 4. Organisation for Co-operation between Railways (https://en.osjd.org/), a CIS organization similar to the International Union of Railways (https://uic.org). 5. Data taken from the World Bank Private Participation in Infrastructure (PPI) Database (https://ppi.worldbank.org/en/ ppi). 6. The Kazakhstan score is taken from the 2018 Organisation for Economic Development and Co-operation (OECD) Database. 7. Seventeen of the networks were in Russia itself. The present Ukraine network consists of six of the previous railways, and the Kazakh network comprises the remaining three railways. By contrast, parts of the Kazakh and Central Asia networks were separated to form the Kyrgyz Republic network, while the remainder of the Central Asia Railway was split to form the separate Uzbekistan, Tajikistan, and Turkmenistan railways. 8. The very low fare in Moldova is for prigorodne services only. International services operate from Moldova to Moscow and St. Petersburg, but these generally carry very few passengers to and from Moldova. Most of these international passengers travel within or between Ukraine and Russia. Without such passengers, these services could not operate, and their revenue has been excluded. 9. The compensation is transferred from the central government to the oblasts, which are then supposed to compensate the railways. However, many oblasts use these funds to support local bus services rather than the prigorodne rail services. 10. Traffic units equal the sum of passenger-kilometers and net ton-kilometers. 11. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 37 Chapter 4: Railways in South Asia 38 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction This chapter presents a brief overview of the current develop in different ways. The Indian network is by far railways in South Asia (India, Pakistan, Sri Lanka and the largest and is subdivided into 162 zonal railways Bangladesh).1 These countries all have substantial under a Railway Board reporting to the Minister of rail networks. Three of the rail networks were Railways. The other railways are much smaller, with originally constructed as a single network by multiple Pakistan the same size (but with much less traffic) government and private companies, covering as the largest Indian zonal railway, and Bangladesh all three countries prior to their independence. smaller than all but four of the Indian zonal railways Particularly in India, several extensions have been (map 4.1). made to the network. The networks essentially All three mainland railways have significant freight operate to common technical standards, although services—although India’s traffic is several orders of the standards are slowly diverging as the systems magnitude greater than that of the other two—with a Map 4.1. Railways in South Asia Source: Map produced by the World Bank Geospatial Operations Support Team (GOST). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 39 strong emphasis on traffic to and from the ports and, This chapter summarizes the key characteristics of in India’s case, with substantial domestic industrial the railways, as included in the Developing Country traffic, especially coal. Sri Lanka, by contrast, handles Railway Database (appendix A). The data have been little freight traffic. All four countries also operate collected from railway annual reports. Most data are substantial nonurban passenger services. In addition, for 2018. All median figures shown in the graphs one of the busiest suburban rail services in the world reflect the representative sample of railways included centers on Mumbai, which represents more than in this report and, importantly, the sample does not half of India’s passengers (but under 10 percent of include some large railway networks, including those the passenger-kilometers). Only limited suburban in North America, Europe, and China. services operate in the other countries. Institutional Structure All railways in South Asia are government owned. projects are nowadays largely financed by the Indian Railways is effectively a government government, either directly or indirectly. The railways department, though with a certain amount of in Pakistan and Bangladesh require government independence from typical departmental practices. In support for both operations and capital expenditures. Sri Lanka, the railways are a government department In all four countries, passenger services contribute under the Ministry of Transport and Civil Aviation. little, if anything, to the cost of maintaining the Both the Pakistan and Bangladesh railways are infrastructure, not least because passenger fares corporations; however, in both countries, the have been kept low for many years as a matter of minister of railways and the government play a large government policy, and the financial gap has to be role in their management and funding. None of the covered by the freight services. Although India has four countries has a private railway, although in India enough freight traffic to be able to cover this cost, several fully government-owned railway corporations the other three networks have seen their freight (for example, Konkan Railway and Dedicated Freight traffic steadily erode as roads have been improved Corridor Corporation of India, Ltd.) and some railway and road transport has become more competitive. entities with private sector investors, including Private investment in railway infrastructure has been Concor and Pipadav railway, exist. seen in India only since the early 2000s. In total, Indian Railways is financially self-sustaining in the five railway projects amounting to a total of US$427 sense it can normally finance its own asset renewals million have been undertaken.3 and replacements. However, major infrastructure 40 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Current Situation Networks 3,000 kilometers in Bangladesh, and nearly 1,500 kilometers in Sri Lanka (figure 4.1). Railway development followed a similar pattern in all In Pakistan and Sri Lanka, the entire operating four South Asian countries, with lines heading inland network is now 1,676 millimeters, but both from ports (initially Mumbai and Kolkata, but later Bangladesh4 and India still have a small amount of Karachi, Colombo, and Chittagong) to reach a trading meter-gauge rail. There are also some small narrow- center, and branch lines were then built to serve gauge networks in India, such as the so-called developing areas. However, as India was at that time “toy trains,” such as Darjeeling and Shimla. At a single administrative entity, cross-continent main independence, about half of India’s then-55,000- lines were built linking Kolkata, Mumbai, Chennai, kilometer network was meter gauge, but almost all Delhi and Lahore. Physically, several links between of this has been progressively converted—especially the three mainland networks have been inherited since Project Unigauge began in 1992—and now only from pre-independence, but the only one with any a few branch lines remain. The broad-gauge network significant traffic is between India and Bangladesh. in Bangladesh is also being extended, normally by No links connect to other countries in Southeast Asia, converting meter gauge to mixed gauge. and only one substandard link carrying little traffic exists between Pakistan and Iran. Much of the Indian network, and some of the other three networks, has been upgraded At the end of 2019, the operating public networks significantly over the years, including duplication, in South Asia totaled nearly 80,000 kilometers. electrification, and modern signaling. No high- The Indian network is by far the largest (67,000 speed passenger lines are yet operational, though kilometers), with 7,700 kilometers in Pakistan, nearly Figure 4.1. Railway Route-Kilometers in South Asian Countries, 2018 80,000 70,000 60,000 Network length (kilometers) 50,000 40,000 30,000 20,000 10,000 0 Bangladesh India Pakistan Sri Lanka 1,676 millimeters 1,000 millimeters 750 millimeters Source: See appendix B for country-level source information. Note: In Bangladesh, the total length of 1,110 kilometers (under 1,676 millimeters) includes 433 kilometers of dual gauge, which allows both broad-gauge and meter-gauge trains to run there. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 41 Box 4.1. Suburban Railways in Mumbai, India Mumbai has one of the largest and most heavily used suburban railways in the world. The commercial center of Mumbai is at the end of a small peninsula, accessed only through its northern end. Three main routes transit this peninsula: one coming 60 kilometers from due north (known as the Western line); one coming 60 kilometers from the northeast, which subsequently splits into two lines going north and south; and one coming from Navi Mumbai (the Harbour line). The total length of the network is about 80,000 400 kilometers, and it carries more than 8 million passengers each day. Both the Central and Western largely quadrupled, with the Western line also having sections with six tracks. Trains in the peak lines are 70,000 hours are extremely crowded, with passenger densities of 12 or more per square meter, and a single 60,000 train, with up to 15 carriages, can carry upwards of 5,000 passengers. The average distance traveled is Network length (kilometers) more than 30 kilometers, and metro lines are being constructed to deal with shorter trips. 50,000 Mumbai carries about 64 percent of the suburban passengers in India. Kolkata also has a substantial demand,40,000 carrying about 1 billion passengers per annum, with an average trip length of 35 kilometers, and Chennai carries 400 million passengers per annum about the same distance. 30,000 Source: World Bank analysis. 20,000 10,000 India is constructing a line between Mumbai and long sections. Signaling ranges from very modern Ahmedabad and new dedicated high-capacity systems on the high-density lines to much simpler 0 freight lines linking eastern India Bangladesh with Delhi andIndia and older systems on lower-density Pakistan Sri Lanka lines. the Punjab as well as Delhi and Mumbai. Significant 1,676 millimeters 1,000 millimeters 750 millimeters suburban networks service Mumbai, Kolkata, Traffic and Chennai, but the network in Mumbai is by In total, the four South Asian railways annually far the most important (box 4.1). The main-line carry nearly 750 billion net ton-kilometers of freight infrastructure in all three countries is generally and more than 1,200 billion passenger-kilometers. in good condition, although some secondary India has by far the most important railway, both lines, and many branch lines, are maintained to for passengers and for freight (figure 4.2). The lower standards, with speed restrictions over largest single traffic item for India is coal (about 50 Figure 4.2. Railway Traffic in South Asian Countries, 2018 2,000 1,800 1,600 1,400 Traffic units (billion) 1,200 1,000 800 600 400 200 0 Bangladesh India Pakistan Sri Lanka Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. 42 MOBILITY AND TRANSPORT CONNECTIVITY SERIES percent of the total) for power stations, steel plants, per capita) in India and Sri Lanka is at least 10 times and other industrial uses, while other traffic items that in Pakistan and Bangladesh. Air travel is a major associated with steel plants and cement represent an competitor in both India and Pakistan. additional 17 percent and 10 percent, respectively. Pricing Other bulk commodities contribute an additional 15 Nonurban passenger services face strong percent, leaving about 100 million tons of general competition from buses in Sri Lanka, Pakistan, freight, about half of which is containerized freight and Bangladesh in terms of price and of service facing strong competition from road haulage. frequency, and from air in both India and Pakistan in Pakistan and Bangladesh carry only a limited terms of travel time. The passenger fares in figure amount of freight, and Sri Lanka almost nothing. 4.3 are systemwide averages over all classes of In Pakistan, all the coal-burning power stations are passengers. In all countries, the differential between on the coast and supplied by sea or by short-haul standard class and upper class is significant. The movements, and the only part of Bangladesh located average fares are all low by developing country within a reasonable distance from the sea is almost standards with average yields (revenue per entirely agricultural. Road competition in Pakistan passenger-kilometer) US$0.02 to US$0.03, adjusted is particularly strong, and railway management has for purchasing power parity. Passenger tariffs struggled to provide an attractive service despite the in all four countries are tightly controlled by the main freight generating area, approximately 1,000 government. For the foreseeable future the only kilometers from the port. way to increase the yield will be to alter the mix of All four countries provide relatively high-frequency services to reduce the lowest price offerings and long-distance passenger services between the major encourage passengers to migrate to higher-fare population centers. But the frequency of trips (trips services. Figure 4.3. Average Railway Tariffs in South Asian Countries, 2018 6 US¢ per net ton-kilometer or passenger-kilometer Passenger tariff 4 (US¢/pkm) Passenger tariff (US¢/pkm) (PPP) Freight tariff (US¢/ntkm) Passenger median 2 tariff (US¢/pkm) (PPP) Freight median tariff (US¢/ntkm) 0 Bangladesh India Pakistan Sri Lanka Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 43 Average freight tariffs on the major networks range Pakistan, Sri Lanka, and Bangladesh all have average from US$0.02 to US$0.03 per net ton-kilometer, network densities of nearly 5 million traffic units, rather lower than the median developing country normally enough to enable them to fund their own tariffs6 of US$0.029 per net ton-kilometer. Tariffs are renewals and replacements. However, the traffic on generally constrained by competition, principally these networks is overwhelmingly passengers, and US¢ per net ton-kilometer or passenger-kilometer from road or in some cases from alternative routes the low passenger tariffs mean the variable costs and are also influenced by the traditional value-based of passenger operation are only covered in a few Passenger tariff structures, the relative cost of carrying different tariff 4 services, and the high volume does not translate (US¢/pkm) commodities (as reflected in net tons per wagon Passenger into profits that could then be used for assettariff (US¢/pkm) (PPP) roundtrip), direction of travel, and volume. Freight replacement.6 Freight tariff tariffs are also controlled by governments, although (US¢/ntkm) increases are more common to support the internal Productivity Passenger median 2 tariff (US¢/pkm) (PPP) cross-subsidy between the freight and passenger Labor and asset productivity (locomotiveFreight median and tariff wagon businesses. (US¢/ntkm) utilization) present a similar picture to network density. Figure 4.5 presents estimated labor Traffic density productivity for the four networks. 0 Traffic density is important because Bangladesh railway India Pakistan Sri Lanka India has the highest labor productivity at just infrastructure has relatively high fixed costs and more than 1.5 million traffic units per employee, low variable costs. As a result, railway profitability reasonably good for a general railway with a very is normally highly correlated with traffic density. substantial passenger business. The other three Figure 4.4 gives the traffic densities on the nonurban countries all generate under 500,000 traffic units sections of the networks, that is, excluding the per employee, relatively low for major railways, likely suburban traffic, which is particularly high in India. in part due to the much lower level of investment India has the highest network density, at 26 million in assets over the last 40 years, with many labor- traffic units.5 India’s is one of the highest network intensive maintenance and traffic management densities in the world, second only to those of practices still surviving. China and Russia among general-purpose railways. Figure 4.4. Railway Traffic Density in South Asian Countries, 2018 30 Traffic units per route-kilometer (millions) 25 20 15 10 5 0 Bangladesh India Pakistan Sri Lanka Median traffic density Source: See appendix B for country-level source information. 44 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 4.5. Railway Labor Productivity in South Asian Countries, 2018 2,000 Traffic units per employee (thousands) 1,500 1,000 2,000 500 Traffic units per employee (thousands) 1,500 0 Bangladesh India Pakistan Sri Lanka Median labor productivity 1,000 Source: See appendix B for country-level source information. Quality of service The indicator adopted for this study is the World 500 Economic Forum (WEF) survey on the quality of It is difficult to find an indicator of quality of service railroad infrastructure for 2017 and 2018.7 The quality applicable across all railways. If the public is of railway service covers a wide range of activities 0 surveyed, their response will inevitably be Bangladesh in terms of India and, because the assessments Pakistan are Sri done by local Lanka passenger service, and this will also be the case with Median businesses, they offer no guarantee of consistency in labor productivity many businesses7in the service sector. Manufacturers the scores, although the order of magnitude provides will consider the quality of the general freight service, a general guide (see figure 4.6). either domestically 6 or, more broadly, the handling India scores reasonably well, at 4.4, while the other of import/export shipments. Manufacturers will be 5 three networks are around 3.0. To provide some primarily concerned with speed and reliability of Index of rail quality context for these indexes, the Unites States scores service, damage, and cargo security. Shippers of bulk 4 5.48, Germany 5.5, Japan 6.58, and Australia 4.07. traffic will also weight cost as an important factor. 7 3 Figure 4.6. Indexes of Rail Quality in South Asian Countries, 2017–2018 6 2 5 1 Index of rail quality Bangladesh India Pakistan Sri Lanka 4 Quality of railroads (1 to 7 best) Median quality of railroad score 3 2 1 Bangladesh India Pakistan Sri Lanka Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 45 Notes 1. Two short extensions (34 kilometers) of the Indian network operate over the border from India into Nepal. These are not included in this review. 2. Together, these 16 zonal railways form the mainline zones. The small metro railway in Kolkata is also technically classified as a zonal railway. 3. The total amount excludes all private investments in metro systems. Data from the World Bank Private Participation in Infrastructure (PPI) Database (https://ppi.worldbank.org/en/ppi). 4. Bangladesh operates a small quantity of mixed-gauge railways. 5. Traffic units equal the sum of passenger-kilometers and net ton-kilometers. 6. Other factors contribute to the poor finances of the railway networks for these three South Asian countries, but the low passenger tariffs is one of the most important. 7. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. Chapter 5: Railways in Southeast Asia 48 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction This chapter presents a brief overview of the railways network owned by Vincomin, the state-owned coal currently operating in Southeast Asia (Cambodia, producer, which transports coal from the production Indonesia, Malaysia, Myanmar, Thailand, and areas in northern Vietnam to adjacent ports. Vietnam).1 Most have substantial rail networks, but All the railways provide passenger services. Most until recently only those of Thailand and Malaysia/ have substantial patronage, including a large Singapore were connected, and these were commuter service in Jakarta and smaller ones in always under different administrations. Most were Kuala Lumpur, Yangon, and Bangkok. Indonesia developed by their governments, although Indonesia has a substantial freight business, based on coal had several private railways until after independence transport. All railways carry a relatively small volume (map 5.1). Vietnam also has a substantial private rail of general freight. Map 5.1. Railways in Southeast Asia Source: Map produced by the World Bank Geospatial Operations Support Team (GOST). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 49 This report summarizes the key characteristics of shown in the graphs reflect the representative the railways, as included in the Developing Country sample of railways included in this report and, Railway Database (appendix A). The data have been importantly, the sample does not include some large collected from various public sources—annual railway networks, including those in North America, railway or regulator reports and/or national statistical Europe, and China. annuals. Most data are for 2018. All median figures Institutional Structure All the railways in Southeast Asia, except the network Vietnam, which has an unusual institutional structure, in Cambodia, are now government owned, and has the only railway that allows third-party access. other than in Myanmar, these are all state-owned The infrastructure is owned by the government enterprises. A stand-alone coal railway is under (through the Vietnam Rail Authority, or VRA) but is construction in Kalimantan in Indonesia. Myanmar’s maintained by third-party contractors supervised railway remains effectively a government department. by the Vietnam Railways (VNR). The funds for this In Cambodia, the rail network and operations have maintenance are a combination of support from been concessioned following reconstruction. Thailand the government and access charges paid by the has recently separated the regulatory function from users. In theory, any operator can use the railway the State Railway of Thailand (SRT) and made it the once it has been licensed by VRA, but mainline responsibility of the revival of the Department of Rail operations are undertaken by two subsidiaries of Transport (DRT)—a government agency under the VNR, one concentrating on freight services and one Ministry of Transport. DRT oversees all rail transport on passenger services, which in theory are self- in Thailand, including urban rail. SRT remains the financing. This structure began operating in 2018 and railway operator for all intercity networks. replaced one in which two enterprises both operated None of the railways is financially self-sustaining, passenger and freight services and were originally or able to finance their own asset renewals and intended to provide more competitive services in replacements. All major infrastructure projects and terms of quality; in practice, they largely competed renewal are funded by government either directly between themselves on price. or indirectly. Passenger fares in many countries In the Southeast Asia region, private investment in are kept low by government policy and contribute the railways has been seen only in Indonesia (a high- little, if anything, toward the cost of maintaining the speed rail project connecting Jakarta to Bandung for infrastructure. However, this constraint often applies a total of US$6 billion, with a 40 percent investment only to the lowest class of travel, and several systems by a private partner), Thailand (high-speed rail linking have introduced higher-standard services that allow Don Mueang Airport with Suvarnabhumi Airport, higher fares to be charged. Nevertheless, profits and the U-Tapao Airport, for a total of about US$7.2 from passenger services are insufficient to cover billion), and Malaysia (a US$269 million contract to the infrastructure costs, and freight volumes are build and operate the Kuala Lumpur Sentral Station).2 insufficient for freight profits to cover the deficit. 50 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Current Situation Networks and also has plans to promote the construction of an east-west line across Myanmar to access a new Railway development, as in many countries, spread Chinese-built port being constructed on the Indian initially to and from ports. But, with the Malayan Ocean coast of Myanmar. peninsula and Java both being narrow, lines were At the end of 2019, the operating public networks then constructed in both countries that ran parallel in South East Asia totaled about 20,000 kilometers. to the coasts. Eventually, railways linked the Thai and The Myanmar network is the largest (6,000 Malaysian networks, and now also links run between kilometers), with 5,000 kilometers in Indonesia Thailand and Cambodia as well as Laos. The western and 4,000 kilometers in Thailand (figure 5.1). All link between Malaysia and Thailand has carried except Indonesia’s networks are meter gauge, with significant freight flows, much of it exports from Indonesia’s being Cape gauge (1,067 millimeters). southern Thailand going to Port Klang and Penang Port in Malaysia, and it still provides an international Much of the Indonesian, Malaysian and Thai passenger service through connecting services at networks have been upgraded significantly over the the border. The Vietnam network has two links with years, including line doubling, electrification, and China, but the combined cross-border volumes are modern signaling. The Cambodian network was also under 1 million tons. A through-passenger service completely reconstructed prior to its concessioning. operates on one link and connecting services on the Myanmar has had some major reconstruction/ other. There have also been long-standing plans to upgrading schemes funded by multilateral and link the Vietnamese and Cambodian networks. China (predominantly) bilateral aid. No high-speed is currently constructing a line south from China to passenger lines exist as such, although one is being link with the line from Vientiane in Laos to Thailand planned to link Singapore and Kuala Lumpur, and another is under construction between Jakarta and Figure 5.1. Railway Route-Kilometers in Southeast Asian Countries, 2018–2019 7,000 6,000 Network length (kilometers) 5,000 4,000 3,000 2,000 1,000 0 Cambodia Indonesia Malaysia Myanmar Thailand Vietnam 1,067 millimeters 1,000 millimeters Source: See appendix B for country-level source information. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 51 Box 5.1. Suburban Railways in Jakarta, Indonesia Jakarta is a heavily congested city in which the commercial and administrative centers are located north of the urban area. Suburban services have been operated for several decades, linking these centers with surrounding urban areas, currently coalescing into a single large metropolis. The busiest line links central Jakarta with Bogor, 60 kilometers to the south, but three other main lines stretch to the west, southwest, and west. The lines are shared, to some extent, with mainline passenger services and freight services. 7,000 The network carries about 1 million passengers each day 6,000 Source: World Bank analysis. Network length (kilometers) 5,000 4,000 Bandung in Indonesia. Significant suburban networks many of them were built to very low standards, using 3,000 operate in Jakarta (box 5.1), Yangon, Kuala Lumpur, local manual labor, and have since proved difficult to well as some smaller cities in and Bangkok as 2,000 operate.3 Indonesia. 1,000 The mainline infrastructure in all systems other than Traffic 0 Myanmar’s is generally in reasonable condition, Cambodia Indonesia MalaysiaIn total, annually carry the railwaysThailand Myanmar 24 billion net ton- Vietnam although some secondary lines are maintained to 1,067 millimeters kilometers of freight and nearly 50 billion passenger- 1,000 millimeters lower standards with resultant speed restrictions. kilometers. Indonesia has by far the most important Signaling ranges from very modern systems on railway, for both passengers and freight (figure 5.2). the high-density lines to much simpler and older The largest single traffic item for Indonesia is coal systems on lower-density lines. After many years of (about two-thirds of the total) for power stations, remaining almost as it had been in 1930, the size of followed by cement, oil products, containers, and the Myanmar network was doubled between 1990 and 2017, with many lines being built in the more palm oil. underdeveloped regions of the country. However, With few bulk minerals and long coastlines by which Figure 5.2. Railway Traffic in Southeast Asian Countries, 2018–2019 50 45 40 35 Traffic units (billions) 30 25 20 15 10 5 0 Indonesia Malaysia Myanmar Thailand Vietnam Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. Note: Data not available for Cambodia. 52 MOBILITY AND TRANSPORT CONNECTIVITY SERIES commodities such as oil products can be easily and relatively slow speed. Malaysia and Vietnam have distributed by sea, the other countries carry only a average yields (revenue per passenger-kilometers) limited amount of freight. In Malaysia, about half on a PPP basis of US$0.08 to US$0.10, which the traffic is shipping containers to and from Port are comparable to the yields of many European Klang, with much of the rest being cement. Road countries. Passenger tariffs for standard class in competition to all of these railways is very strong. all countries are controlled by the government. For Most countries provide relatively high-standard the foreseeable future the only way to increase the long-distance passenger services between the major yield will be to alter the mix of services to reduce the population centers. Air travel is a major competitor in lowest price offerings and encourage passengers to both Indonesia and Vietnam for the longer-distance migrate to higher-fare services. services, as is bus in all countries. Average freight tariffs on the major networks range from US$0.01 to US$0.03 per net ton-kilometer, Pricing rather lower than tariffs on other general-freight railways in comparable countries. Other than those Nonurban passenger services face strong price and for Indonesian coal traffic, tariffs are generally service competition from buses in all Southeast constrained by competition, principally from road- Asian countries. The passenger fares in figure based transport. Tariffs are also influenced by the 5.3 are systemwide averages over all classes of traditional value-based tariff structures, the relative service, heavily weighted toward the standard (or cost of carrying different commodities (as reflected economy) class. In all countries, the differential in net tons per wagon roundtrip), direction of travel, between standard class and upper class is significant. and volume. Freight tariffs are also controlled by The average fares in Myanmar are low by global governments, although increases are more common standards, when considered on a purchasing power to support the internal cross-subsidy between the parity (PPP) basis but reflect the rollingstock quality freight and passenger businesses. Figure 5.3. Average Railway Tarrifs in Southeast Asian Countries, 2018–2019 10 US¢ per net ton-kilometer or passenger-kilometer 8 Passenger tariff (US¢/pkm) Passenger tariff 6 (US¢/pkm) (PPP) Freight tariff (US¢/ntkm) 4 Passenger median tariff (US¢/pkm) (PPP) 2 Median traffic density (million tonnes/route-km) 0 Cambodia Indonesia Malaysia Myanmar Thailand Vietnam Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). Freight tariff information for Cambodia not available. Note: Data not available for Cambodia. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 53 Figure 5.4. Railway Traffic Density in Southeast Asian Countries Traffic units per route-kilometer (millions) 10 8 6 4 2 0 Indonesia Malaysia Myanmar Thailand Vietnam Median traffic density Source: See appendix B for country-level source information. Note: Data not available for Cambodia. Traffic density Productivity Traffic density is important because railway Labor and asset productivity (locomotive and wagon infrastructure has relatively high fixed costs and utilization) present a similar picture to that of low variable costs. As a result, railway profitability is network density. Figure 5.5 presents estimated labor normally highly correlated with traffic density. Figure productivity for the Southeast Asian rail networks. 5.4 shows the traffic densities. Indonesia has the Indonesia has the highest labor productivity at just highest network density, at more than 8 million traffic over 1.5 million traffic units per employee—very units,4 although most of the freight is concentrated good for a railway with a substantial passenger on a single line. None of the others have an average business. Thailand and Malaysia also have network density greater than 3 million traffic units. reasonable productivities; however, both Vietnam This is barely enough to fund infrastructure renewals and Myanmar produce well under 500,000 traffic and replacements. Figure 5.5. Railway Labor Productivity in Southeast Asian Countries, 2018–2019 2000 Traffic units per employee (thousands) 1500 1000 500 0 Indonesia Malaysia Myanmar Thailand Vietnam Median labor productivity Source: See appendix B for country-level source information. Note: Data not available for Cambodia. 54 2000 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Traffic units per employee (thousands) 1500 units per employee, although this is in part due to service, damage, and cargo security. Shippers of bulk 1000 their much lower level of investment in assets over traffic will also weight cost as an important factor. the last 40 years. The indicator adopted for this study is the World 500 Economic Forum (WEF) survey on the quality of Quality of service railroad infrastructure for 2017 and 2018.5 The quality It is difficult to find 0 an indicator of quality of service of railway service covers a wide range of activities Indonesia Malaysia and, because Thailand Myanmar Vietnam the assessments are done by local applicable across all railways. If the public is surveyed, their response will inevitably be in terms of businesses, Median labor they productivity offer no guarantee of consistency in passenger service, and this will also be the case with the scores, although the order of magnitude provides many businesses in the service sector. Manufacturers a general guide (see figure 5.6). will consider the quality of the general freight service, To provide some context for these indexes, the either domestically or, more broadly, the handling Unites States scores 5.48, Germany 5.5, Japan 6.58, of import/export shipments. Manufacturers will be and Australia 4.07. primarily concerned with speed and reliability of Figure 5.6. Indexes of Rail Quality in Southeast Asia Countries, 2017–2018 7 6 5 Index of rail quality 4 3 2 1 Indonesia Malaysia Myanmar Thailand Vietnam Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. Note: Data for Myanmar is from 2015–16. Data not available for Cambodia. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 55 Notes 1. Two short extensions of the Thai network and the Malaysian networks operate over their borders into Laos and Singapore respectively. Neither is included in this review, nor is the new line currently being constructed south from China into Laos. Additional small railways operate in the Philippines and Sabah, which are also not included. 2. The totals exclude all PPI investments for metros. Data from the World Bank Private Participation in Infrastructure (PPI) Database (https://ppi.worldbank.org/en/ppi). The data for Thailand comes from an Eastern Economic Corridor (EEC) Office news release (https://www.eeco.or.th/en/news/signing-ceremony-program-of-public-private-partnership-ppp- agreement-the-high-speed-rail-linking-three-airports-project). 3. Some lasted only a few weeks before services were suspended, and one or two never even saw a revenue-earning service. 4. Traffic units equal the sum of passenger-kilometers and net ton-kilometers. 5. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 57 Chapter 6: Railways in the Middle East, Caucasus, And Turkey 58 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction This chapter presents a brief overview of the current All railways except in the UAE provide passenger railways in the Middle East and Caucasus, which services. Most of the services carry a substantial includes Armenia, Azerbaijan, Georgia, Iraq, the volume, including a large commuter service in Israel Islamic Republic of Iran, Israel, Saudi Arabia, Turkey, and a substantial medium- and long-distance service and the United Arab Emirates (UAE).1 Most of the in the Islamic Republic of Iran. The Islamic Republic countries included have substantial rail networks, of Iran also has a substantial freight business, based and all except Israel, Saudi Arabia, and UAE are, on minerals, while both Azerbaijan and Georgia or were, interconnected. All are now operated as have significant, although rather diminished, freight government railways (map 6.1). businesses, of which about one-third is oil traffic. Iraq Map 6.1. Railways in the Middle East, Caucasus, and Turkey Source: Map produced by the World Bank Geospatial Operations Support Team (GOST). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 59 is recovering from war damage, and traffic volumes annuals. Most data are for 2018. All median figures are very low, well below historic levels. shown in the graphs reflect the representative This report summarizes the key characteristics of sample of railways included in this report and, the railways, as included in the Developing Country importantly, the sample does not include some large Railway Database (appendix A). The data have been railway networks, including those in North America, collected from various public sources—annual Europe, and China. railway or regulator reports and/or national statistical Institutional Structure All railways in the Middle East, Caucasus, and Turkey Investment Fund (PIF), a sovereign wealth fund. are government owned, but in Armenia the railway Currently, the networks operated by the SRO and was concessioned for 30 years to the South Caucasus SAR are not interconnected. The government of Railway, a subsidiary of the Russian railways. All Saudi Arabia recently approved (February 2021) the others are still government operated. The railways merging of the two companies; Saudi Railways (SAR) of both the Islamic Republic of Iran and Iraq are will take over the country’s original railway, Saudi effectively operated as government departments; Railways Organization (SRO). the remaining railways are state-owned enterprises. The railway infrastructure in the UAE is the newest The railways of Georgia and the Islamic Republic built in the region, as the planning of the network of Iran are financially self-sustaining, in the sense started in 2009. The Etihad Rail is the state-owned they can normally finance their own asset renewals company in charge of: (1) the management of the and replacements.2 In Iraq, Azerbaijan, and Israel, development and construction of the railway network all major infrastructure projects and renewals of the country, and (2) the operation of the transport are financed by the government, either directly services. For operation of transport services, in 2013 or indirectly. Passenger fares in many countries Etihad Rail created a joint venture with Deutsche are kept low by government policy and contribute Bahn. The joint venture started its commercial activity little, if anything, toward the cost of maintaining in January 2016, after Etihad Rail had completed the infrastructure. However, the Islamic Republic of the first phase of its network. The transport Iran has outsourced several long-distance services operations are presently limited to freight transport to third-party operators providing higher-standard of granulated sulfur for the Abu Dhabi National Oil services that allow higher fares to be charged. Company. Currently, none of the railways, except in Turkey, Only two countries in the region have seen private has third-party access. In Turkey, two services are investment in infrastructure in the past 30 years: operated by independent operators, with their Armenia (brownfield) and Turkey (greenfield), own locomotives, wagons and crew. For Saudi amounting to a total of US$756 million.3 In Armenia, Arabia, the railway sector commenced its overall in June 2008, a subsidiary of the Russian Railway sector reform in 2017, with the intent of clarifying Company was awarded a 30-year concession contract the roles, responsibilities, and structure of the two to operate the Armenian Railways. Turkey, in May major railway companies in the country—the Saudi 2019, awarded a contract to a private company to Railways Organization (SRO) and the Saudi Railway design, construct, and operate an inland intermodal Company (SAR). SAR has been financed by the Public 60 MOBILITY AND TRANSPORT CONNECTIVITY SERIES cargo terminal or railport in Kocaeli province.4 on how entry and conduct in the relevant sector is In 1998, the Organisation for Economic Co-operation regulated, and on the level of public ownership. They and Development (OECD) developed a set of reflect the status of the existing laws and regulations, indicators of product market regulation (PMR) though do not capture the level of enforcement. The to measure a country’s regulatory barriers to values range from 0 to 6, from the most to the least competition and to track reform progress over time. competition friendly regulatory regime. Table 6.1 The PMR indicators measure the degree to which below reflects the scores for Armenia, Azerbaijan, policies promote or inhibit competition in markets Georgia, Israel, and Turkey, based on inputs from a for products and services, collecting information regional railway expert. Table 6.1. Product Market Regulation Scores in the Caucasus, Israel, and Turkey, 2020 Country PMR score Economic regulator Safety regulator Armenia 5.57 Yes Ministry Yes Ministry Azerbaijan 4.29 Yes Ministry Yes Ministry Georgia 5.57 Yes Ministry Yes Ministry Israel 0.50 Yes Ministry Yes Ministry Turkey 1.77 Yes Ministry Yes Ministry Source: Original calculations based on the OECD product market regulation (PMR) methodology. For more information, see: https://www.oecd.org/economy/ reform/indicators-of-product-market-regulation/. Current Situation Networks nineteenth century under the Ottoman Empire and gradually expanded to centers such as Damascus. Railway development in the three Caucasus countries Because Turkey has a long coastline encircling (Armenia, Azerbaijan, and Georgia) was initially three-quarters of the country, much of the network intended to link Azerbaijan and Armenia to the Black links the interior of Turkey with the closest ports, Sea, with links later built north–south to Russia and and much interurban travel was by comparatively the Islamic Republic of Iran. Subsequently, links were circuitous routes until recently. also built from Armenia to Turkey (now closed) and Before World War I, the Iraqi railway was from Nakhichevan to the Islamic Republic of Iran. originally planned to be part of a through-route Georgia and Turkey have recently completed a direct between Europe and Baghdad. However, it was connection through Kars. Azerbaijan has recently not completed—including a line from Basra to extended its Astara line over the border into the Baghdad—until just before the World War II. The Islamic Republic of Iran as part of the planned north– Iraqi railway is linked to Syria in the northwest south corridor from Russia to the Persian Gulf. The (and thus to Turkey) and has a short branch to the initial sections of the Turkish railway were built in the Syrian border near Abu Kamal. The Iranian system RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 61 historically also had a connection to the Iraqi is planned to have a length of 1,200 kilometers, network. Currently, it connects to the Turkish and will connect all seven emirates of the country, and Armenian networks in the northwest, the Turkmen will link the other five countries of the Cooperation network in the northeast, and the Pakistani network Council for the Arab States of the Gulf (GCC): Bahrain, in the southeast. The Iranian network is also currently Saudi Arabia, Qatar, Kuwait, and Oman. The network completing connections to Azerbaijan and to Herat is planned to be double track, with an axle load of in Afghanistan. The Israel network had its origins in 32.5 tons, operating freight trains at maximum speed the Hejaz Railway, constructed from Syria to Medina, of 120 kilometers per hour (kph) and passenger together with the railways built by the allied forces trains at a speed of 200 kph. The signaling system is during World War I. At various times, connections based on electronic interlocking and the European with the Syrian, Lebanese, and Egyptian networks Train Control System (ETCS) Level 1. The construction have provided additional links in the region, though of the railway network of the UAE is financed by none of these are operational today. the UAE Ministry of Finance and the Abu Dhabi Currently, both Turkey and the Islamic Republic Department of Finance. Presently, the first stage of Iran are significantly expanding their networks. of construction of the railway network has been Turkey has built high-speed rail lines between Ankara finalized, which spans 264 kilometers from Shah and and Istanbul and between Ankara and Eskişehir, Habshan (the location of gas fields in the emirate along with other planned lines joining major centers. of Abu Dhabi) to the port in Ruwais on the western The Islamic Republic of Iran is adding new lines to coast of the emirate of Abu Dhabi. Stage two of the neighboring countries, new ports, and all provincial project began construction in 2020, and stretches centers as yet unconnected. A plan to link Gulf states 605 kilometers from Ghuwaifat on the border with by rail under the aegis of the Gulf Cooperation Saudi Arabia to the emirate of Fujairah on the east Council (GCC) appears to have slowed as oil revenues coast of the UAE. The rest of the railway network will of the members states have reduced. be realized in a forthcoming third stage. In Saudi Arabia, the SRO operates a network of At the end of 2019, the operating public networks in railways with a total length of approximately 1,250 the region totaled about 32,000 route-kilometers. The kilometers, including: (1) a freight line connecting Turkish network is the largest (12,700 kilometers), King Abdul Aziz Port in Dammam with Riyadh; and with 6,000 kilometers in the Islamic Republic of (2) a passenger line connecting the city of Dammam Iran and the other five varying in the ranges of with Riyadh. The SAR operates a freight network of 250 to 3,600 kilometers (figure 6.1). The three 2,750 kilometers with two main lines: (1) the Riyadh- Caucasus country networks are all Soviet gauge Qurayyat line, which begins at Riyadh and runs (1,520 millimeters), with the other four all standard northwest toward Al Haditha near the Jordanian gauge—apart from very short sections of broad border; and (2) a line from the Al-Jalamid mine in gauge in the Islamic Republic of Iran connecting to the Northern Province, which runs southeast to the the Commonwealth of Independent States (CIS) and processing and export facilities in Ras Al Khair in the Pakistan networks. Eastern Province. The railway lines operated by SAR Much of the Iranian, Saudi, and Turkish networks are built for an axle load of 32.5 tons allowing the have been expanded and upgraded significantly operation of freight trains of 10,000 to 15,000 tons. over the years, including electrification (in Turkey) Finally, the 450-kilometer Haramain High Speed and modern signaling. In Saudi Arabia, SAR was Railway links Mecca and Medina, providing a safe and established in 2006 to construct the 2,400-kilometer comfortable means of transport for Hajj pilgrims. north–south railway connecting the Gulf port of Jubail The government of the UAE started to build the and Riyadh with the mining centers in the north. railway network of the country in 2009. The network The line is currently in operation and is equipped 62 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Figure 6.1. Railway Route-Kilometers in the Middle East, Caucasus and Turkey, 2018–2019 14,000 12,000 Network length (kilometers) 10,000 8,000 6,000 4,000 2,000 0 Armenia Azerbaijan Georgia Iran, Islamic Iraq Israel Saudi Arabia Turkey United Arab Rep. Emirates 1,520 mm 1,435 mm Source: See appendix B for country-level source information. with electronic interlocking in all stations and ETCS planning or currently constructing several more. The Level 1 signaling. A new 115-kilometer line is under Islamic Republic of Iran is also constructing a high- construction between Jubail and Dammam, together speed line from Tehran to Isfahan. 60 Landbridge, a new 950-kilometer line with the Saudi Other than in Iraq, which is still suffering from war connecting Riyadh with Jeddah. The two projects have damage, the mainline infrastructure in all regional an estimated50cost of US$7 billion. A link between the systems is generally in reasonable condition, SRO and SAR terminals in Riyadh is also planned. although some secondary lines are maintained to Traffic units (billiions) 40 The Israeli network has been modernized extensively lower standards with resultant speed restrictions. in the past decade 30 (see box 6.1), including a new Signaling ranges from very modern systems on the 160-kph line between Tel Aviv and Jerusalem. The high-density lines to much simpler and older systems 20 Georgian networks have also been Azerbaijan and on lower-density lines. upgraded. Turkey has two high-speed lines and is 10 Box 6.1. Modernization of the Israeli Network 0 Georgia Iran, Islamic Armenia Iraq AzerbaijanIsrael Saudi Arabia Turkey United Arab In 2018, the first section of a new 56 kph, high-speed Rep. Jerusalem line between (SAR Aviv was opened, only) and Tel Emirates with the line reaching Tel Aviv itself in 2020. Services on the new line run every half hour and take 30 Passenger-kilometers Net ton-kilometers minutes, compared to 75 minutes on the old route. This has been complemented by a four-year, €6.5 billion (approximately US$7.34 billion) railway modernization strategy approved in 2016, including new stations and electrification (about 40 percent of the total expenditure), with the remainder intended for new signalling and communication systems, maintenance facilities, and new rail links. The combined effect of these projects when completed will be to almost double the number of trains running on the network each day, from 450 trains to nearly 900. Source: World Bank analysis. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 63 Traffic transportation of some 11 million tons of minerals (such as phosphate), hazardous substances (such as In total, the railways annually carry 56 billion net molten sulfur and phosphoric acid) from the north ton-kilometers of freight and nearly 25 billion of the country, and bauxite from the central regions passenger-kilometers. The Islamic Republic of Iran’s of the country to the Ras al-Khair Industrial Port in railway carries by far the most traffic (figure 6.2). the Eastern Province. Iran’s rail freight includes minerals (about two- 14,000 In the UAE, the existing 264-kilometer network has thirds of the total), followed by industrial products, 12,000 the capacity to transport 22,000 tons of granulated such as cement and steel, along with oil products. sulfur each day from its sources at Habshan and Network length (kilometers) Turkey’s railway has the second largest volume of 10,000 Shah to its point of processing and export at Ruwais. traffic, mostly minerals moving from the interior 8,000 in Georgia and Azerbaijan More than 20 million tons have been carried in total to ports. The railways by the Etihad Rail Deutsche Bahn (DB), since 2016, both carry transit oil traffic from the Caspian 6,000 when the commercial transport services started. oilfields to terminals on the Black Sea. The other railways carry only limited volumes of freight. Road 4,000 All countries in this report provide relatively high- competition for general freight is very strong in all standard long-distance passenger services between 2,000 the major population centers. Turkish Railway the countries. In Saudi Arabia, the passenger line connecting the city0 of Dammam with Riyadh carries handles substantial commuter traffic in Istanbul and approximately 1.3 million Armenia Azerbaijanper passengers year; Iran, Islamic Georgia Iraq hasIsrael Israel well-used commuter/interurban Saudi Arabia Turkey United Arab services. the freight line connecting King Abdul Aziz Port inRep. Air travel is a major competitor in Emirates both Turkey and Dammam with Riyadh carries approximately 1,520 mm800,000 1,435 mm the Islamic Republic of Iran for the longer-distance twenty-foot equivalent units (TEUs) annually; and services, as is bus-based transport in all countries. the north–south freight service contributes to the Figure 6.2. Railway Traffic in the Middle East, Caucasus and Turkey, 2018–2019 60 50 Traffic units (billiions) 40 30 20 10 0 Armenia Azerbaijan Georgia Iran, Islamic Iraq Israel Saudi Arabia Turkey United Arab Rep. (SAR only) Emirates Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. 64 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Pricing Average freight tariffs on the major networks range from US$0.02 to US$0.04 per net ton-kilometer, The passenger fares shown in figure 6.3 are similar to tariffs on other general-freight railways in systemwide averages over all classes of passengers; comparable countries. The main exception is Georgia, however, they are heavily weighted toward the where higher rates may reflect the difficult terrain. In standard (or economy) class. The price differential Saudi Arabia, the SAR freight transport tariffs on the between standard class and upper class is significant. north–south line are very low, compared even with The average fare in Azerbaijan is very low by world the most efficient railways in the world, in the limits standards; those in Israel and Armenia (where of US$0.007 to US$0.011. For this reason, in spite of fares are heavily influenced by the comparatively good productivity achieved by SAR in the utilization expensive long-distance fares) have an average yield of its assets, the company accumulates financial (revenue per passenger-kilometer) on a purchasing losses. The freight tariffs on the north–south line are power parity (PPP) basis of about US$0.08 to US$0.09 heavily subsidized by the government as a way to per passenger-kilometer. Passenger tariffs for support the country’s budding mining industry, which standard class in all countries except Georgia are is considered one of the nation’s tools to diversify its controlled by the government, and for many railways economy and reduce its heavy reliance on oil exports. the only way to increase the yield will be to alter the Overall, in the region tariffs are constrained by mix of services to reduce the lowest price offerings competition, principally from road and in some cases and encourage passengers to migrate to higher-fare from alternative routes. Tariffs are also influenced services. by the traditional value-based tariff structures, the The Saudi Railways tariffs for passenger traffic are relative cost of carrying different commodities (as the highest in the region, in the range of about reflected in net tons per wagon roundtrip), direction US$0.08. Lacking public service contracts, the rail of travel, and volume. services in Saudi Arabia are not self-financing. Figure 6.3. Average Railway Tariffs in the Middle East, Caucasus and Turkey, 2018 12 US¢ per net ton-kilometer or passenger-kilometer 10 Passenger tariff 8 (US¢/pkm) Passenger tariff (US¢/pkm) (PPP) 6 Freight tariff (US¢/ntkm) 4 Passenger median tariff (US¢/pkm) (PPP) Freight median tariff 2 (US¢/ntkm) 0 Armenia Azerbaijan Georgia Iraq Israel Saudi Arabia Turkey (SAR only) Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). Data not available for the Islamic Republic of Iran or the United Arab Emirates. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 65 Figure 6.4. Railway Traffic Density in the Middle East, Caucasus, and Turkey, 2018–2019 10 Traffic units per route-kilometer (millions) 8 6 4 2 0 Armenia Azerbaijan Georgia Iran, Islamic Iraq Israel Saudi Arabia Turkey United Arab Rep. (SAR only) Emirates Median traffic density Source: See appendix B for country-level source information. Traffic density average network density greater than 3 million traffic units. This is barely enough to fund infrastructure Traffic density is important because railway renewals and replacements unless relatively high infrastructure has relatively high fixed costs and freight rates are charged (as in Georgia). For Saudi low variable costs. As a result, railway profitability is Arabia, rail developments tend to be strategic in normally highly correlated with traffic density. Figure nature rather than solely financially driven. 6.4 shows the traffic densities. The Islamic Republic of Iran has the highest network density, at 6 million Productivity traffic units.5 The railway infrastructure in the UAE achieved in 2019 a density of traffic of 5.7 million Labor and asset productivity (locomotive and traffic units, facilitated by the operation of heavy wagon utilization) present a similar picture to block trains of about 15,000 tons each. network density. Figure 6.5 presents estimated labor productivity for the Middle East, Caucasus, and None of the other railways in the region has an Turkey networks. Figure 6.5. Railway Labor Productivity in the Middle East, Caucasus, and Turkey, 2018 2,500 Traffic units per employee (thousands) 2,000 1,500 1,000 500 0 Armenia Azerbaijan Georgia Iran, Islamic Iraq Israel Saudi Arabia Turkey Rep. (SAR only) Median labor productivity Source: See appendix B for country-level source information. Note: Data not available for the United Arab Emirates. 66 MOBILITY AND TRANSPORT CONNECTIVITY SERIES The Islamic Republic of Iran and Turkey have the their response will inevitably be in terms of passenger highest labor productivity, at nearly 2 million traffic service, and this will also be the case with many units per employee, helped by their substantial businesses in the service sector. Manufacturers will freight traffic. The Islamic Republic of Iran figure is consider the quality of the general freight service, an estimate after adjusting for the estimated staff in either domestically or, more broadly, the handling the subsidiary 2,500 companies, which are the operators of import/export shipments. Manufacturers will be of the passenger and freight services. Israel also has primarily concerned with speed and reliability of Traffic units per employee (thousands) 2,000 considering it is largely a passenger high productivity, service, damage, and cargo security. Shippers of bulk railway; however, Armenia, Azerbaijan and Georgia traffic will also weight cost as an important factor. have quite low 1,500 productivity. Iraq’s productivity is very The indicator adopted for this study is the World low because it is currently carrying very little traffic as Economic Forum (WEF) survey on the quality of it recovers from1,000 war damage. In Saudi Arabia, the SAR railroad infrastructure for 2017 and 2018.6 The quality achieved a good staff productivity as a predominantly of railway service covers a wide range of activities 500 freight transport-oriented company, operating heavy and, because the assessments are done by local block trains (10,000 to 15,000 tons) on long distances businesses, they offer no guarantee of consistency in (more than 1,0000kilometers). Armenia Azerbaijan Georgia Iran, Islamic Iraq scores, the although Israel the order Saudi Arabia of magnitude provides Turkey Rep. (SAR only) a general guide (figure 6.6). Quality of service Median labor productivity To provide some context for these indexes, the Unites It is difficult to find an indicator of quality of service States scores 5.48, Germany 5.5, Japan 6.58, and applicable across all railways. If the public is surveyed, Australia 4.07. Figure 6.6. Indexes of Rail Quality in the Middle East, Caucasus, and Turkey, 2017–2018 7 6 5 Index of rail quality 4 3 2 1 Armenia Azerbaijan Georgia Iran, Islamic Israel Saudi Arabia Turkey Rep. (SAR only) Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. Note: Data not available for Iraq and the United Arab Emirates. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 67 Notes 1. The Jordanian network is isolated from the private Aqaba line and a few tourist trains. The Syrian network has effectively ceased operations. 2. In Armenia, this is the responsibility of the concessionaire, which also receives a payment from the government for operating the passenger service. 3. Data from the World Bank Private Participation in Infrastructure (PPI) Database (https://ppi.worldbank.org/en/ppi). 4. The special purpose vehicle (SPV) is called Railport Terminal Isletmeleri A.S. and is owned by Arkas Holding S.A.’s affiliate Limar Liman ve Gemi Isletmeleri A.S. (66.6 percent) and Duisburger Hafen Aktiengesellschaft (Duisport) (33.3 percent). 5. Traffic units equal the sum of passenger-kilometers and net ton-kilometers. 6. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 69 Chapter 7: Railways in North Africa 70 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction This chapter presents a brief overview of the railways enterprises manage rail infrastructure and provide currently operating in North Africa (Morocco, Algeria both passenger and freight services (map 7.1). and Tunisia in the Maghreb, and Egypt). State-owned Map 7.1. Railways in North Africa Source: Map produced by the World Bank Geospatial Operations Support Team (GOST). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 71 Institutional Structure Railways established in the Maghreb during the acquisition and maintenance is funded by the railway colonial period were built and operated by the private companies, except acquisition of rollingstock used in sector under concessions generally featuring a services operated under a PSO scheme, which is in government profit guarantee scheme. After countries most cases funded by the state. The state provides recovered independence in the 1950s and 1960s, all financial compensation for PSO passenger services rail activities were or had previously been taken over (suburban services) through elaborate contractual by state-owned “railway companies” placed under arrangements in Tunisia and on a lump-sum basis the control of the ministries of transport. Railway in Algeria; ONCF does not operate PSO services at companies—the Moroccan National Railways Office present. Financial compensation for mandatory (ONCF) in Morocco, National Rail Transportation tariff rebates for specific customers is also provided Company (SNTF) in Algeria, and the Tunisian National by the state in Morocco and Tunisia. While ONCF is Railway Company (SNCFT) in Tunisia—are the financially sound, SNCFT and, more particularly, SNTF exclusive rail infrastructure managers and provide are suffering from a very dismal financial situation both passenger and freight services. In Morocco despite the important public contributions they and Tunisia, existing legislation allows operation receive. of specialized services by third-party operators; The Egyptian National Railway (ENR) is a state- however, this opportunity has not yet been explored. owned entity charged with the management of the ONCF and SNCFT are also responsible for network railway transport system in Egypt. ENR is organized development, while in Algeria this activity is handled as a vertically integrated entity and includes by a separate state-owned enterprise, the National management of railway infrastructure, provision Agency for the Planning and Implementation of of the freight and passengers transport, and Railway Investments (ANESRIF), under the control maintenance of rollingstock. The ENR is organized of the Ministry of Public Works. The relationship as an economic public authority and has a slightly between the government of Morocco and ONCF is different relationship with the state compared with outlined by multiyear contrats-plans (plan contracts), the state-owned enterprises. The public financing of ONCF and SNCFT are internally organized in various the economic public authorities in Egypt is limited to business units, including (1) infrastructure, (2) freight, the surplus that goes to the state and contributions (3) intercity passenger, (4) public service obligation or loans offered to these entities in case of financial (PSO) suburban passenger, if any, and (5) heavy losses. The ENR is predominantly a passenger maintenance rollingstock workshops. SNTF has kept transport services entity and is not financially a more traditional organization on a technical and self-sustainable. regional basis, with separate marketing units for ENR prepares an annual preliminary budget and freight and passenger. submits it to the Ministry of Transport (MoT). After In the three Maghreb countries, the state entirely MoT negotiates and approves the draft preliminary funds new infrastructure (network extension and budget, it sends it to the Ministry of Finance, which— major improvements of the existing network). after further negotiations with the aim of increasing Infrastructure maintenance is mostly funded by revenue and decreasing expenditures—sends it the railway companies, with some lump-sum state to parliament for adoption in the form of a law contributions in Algeria and Tunisia. Rollingstock approving the tentative budget of ENR. Annual public 72 MOBILITY AND TRANSPORT CONNECTIVITY SERIES financing is disbursed by the Ministry of Finance gives loans to the ENR. The financial contributions or directly to ENR as lump-sum, in installments based on the governmental loans are allocated for covering the immediate needs of ENR and the cashflow of the equally the operational expenditures and the Ministry of Finance. The government of Egypt also investments. Current Situation Networks addition, exchanges between Algeria and Tunisia are limited to insignificant amounts of freight. At the end of 2019, the operating network in North ONCF uses electric traction on 75 percent of its Africa totaled about 13,000 route-kilometers, out network, as does SNTF on Algiers suburban lines and of which 8,000 kilometers were in the Maghreb on a line carrying iron ore and phosphate rock, along countries, with more than 5,000 kilometers in Egypt with SNCFT on its two suburban networks (Tunis and (see figure 7.1). Sahel). Most of the lines in the three countries are In the Maghreb, Morocco’s infrastructure is entirely equipped—or are presently being equipped—with standard gauge and Algeria has almost entirely modern signaling and telecommunication systems. completed a program of replacing meter-gauge Morocco and Algeria are presently implementing with standard gauge lines. The Tunisian network important rail infrastructure investment programs. is schematically standard gauge north of Tunis In 2018, Morocco commissioned a new 200-kilometer and meter-gauge south of Tunis; however, this high-speed passenger line between Kenitra and configuration does not hinder railway services Tangiers, which also improves capacity of the classical significantly. The three Maghreb networks are network, notably through track doubling on heavily interconnected, but traffic between Morocco and trafficked itineraries. Algeria is modernizing the Algeria has been interrupted since 1994 due to existing network through resorption of track renewal political discord between the two countries. In Figure 7.1. Railway Route-Kilometers in North African Countries, 2018–2019 6,000 5,000 Netowrk length (kilometers) 4,000 3,000 2,000 1,000 0 Algeria Egypt Morocco Tunisia 1,435 millimeters 1,000 millimeters Source: See appendix B for country-level source information. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 73 backlog, track realignment in difficult sections and between the port of Alexandria and the 6th of line doubling and is executing a very ambitious October dry port serving the Cairo area is envisaged program of new lines serving the less-developed to be built by the government, for private operation, part of the country. Tunisia is mainly focusing on by a different entity than the ENR. expanding the Tunis and Sousse suburban networks and on rehabilitating some nonurban sections of the Traffic network. North African railways are predominantly passenger The existing railway network of Egypt connects the railways. In total, they carried nearly 45 billion economy and population centres of the country. Main passenger-kilometers against nearly 6 billion net ton- 6,000 cities are linked by rail as well as ports, industrial, kilometers of freight (see figure 7.2). and mining centres. The government of Egypt has 5,000 ONCF offers intercity passenger services between started an ambitious program for the modernization Netowrk length (kilometers) main Moroccan cities. Services are mostly organized of the existing railway infrastructure, mainly along 4,000 under the desserte cadencée (cyclic schedule) the Alexandria–Cairo–Aswan corridor, which is the scheme, with generally suitable fares and a good backbone of the railway network. The modernization 3,000 quality of service in terms of frequency, commercial includes track renewal works and the installation speed, punctuality and comfort. Consequently, of the signalling systems based on electronic 2,000 competition from buses is quite limited on the routes interlocking and European Train Control System served by rail. High-speed services introduced in (ETCS)1 Level 1. About 1,000 kilometers of track are 1,000 2018 on the Casablanca–Rabat–Tangiers route are a currently under various stages of modernization, a commercial success. In Algeria and Tunisia, shortage vital project for enhancing 0 the currently poor traffic of modern rollingstock and track condition have Algeria safety in Egypt. No major development of the Egypt railway Morocco Tunisia 1,435 millimeters the last in 1,000 decades restricted volume and quality millimeters network seems necessary for the medium-term. A of service of intercity services. Buses and shared few short-distance new lines might be necessary taxis (and air transport in Algeria) have seized an to provide better connectivity with the railway important share of the market traditionally served network for the freight customers. A large project for by rail. In Algeria, 2018 intercity passenger traffic establishing a first dedicated railway freight corridor Figure 7.2. Railway Traffic in North African Countries, 2018–2019 40 35 30 Traffic units (billion) 25 20 15 10 5 0 Algeria Egypt Morocco Tunisia Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. 74 MOBILITY AND TRANSPORT CONNECTIVITY SERIES volume is less than half of 1990 traffic. In Tunisia, industry and often have difficulties to provide intercity traffic was severely affected by disruption adequate quality of service. in SNCFT following the 2011 revolution; 2018 traffic The total traffic in Egypt (passenger and freight) volume amounts to only 50 percent of 2010 traffic. reached in 2019 about 40 billion traffic units; this SNTF and SNCFT operate high-quality suburban traffic exceeds more than three times the combined services respectively in the Algiers region and in traffic of the railways in Algeria, Morocco, and the Tunis and Sousse regions. In the two railway Tunisia. The Egyptian railway is predominantly a companies, suburban services presently account for passenger railway, with passenger traffic accounting about half of the total passenger activity and their for about 97 percent of the physical activity of the development perspectives are excellent. In Tunisia, railway, compared to 56 percent passenger traffic suburban traffic is the only rail activity that continued weight in Morocco and 56 percent in Algeria. to increase after the difficulties encountered by The passenger transport is organized along two SNCFT following the 2011 revolution. types of services using dedicated train sets, for long In the Maghreb, transport of phosphate rock in and short distance. The long-distance passenger the three countries, and iron ore in Algeria, used services connect all major cities of the country, while to be a key rail activity until the early 2000s. It the short-distance services are provided mainly continues to thrive in Morocco (even if development around the Cairo region. The passenger transport perspectives are limited). In Tunisia, political unrest represents the priority of the ENR, while the freight in the phosphate mining area following the 2011 transport is a marginal business that often suffers revolution led to a drastic decline in phosphate from limited availability of locomotives and of production and disturbance in rail transport, which adequate structure of wagon fleet. Presently, the was partly taken over by road transport. In Algeria, main commodities transported by rail include cereals, production of phosphate and iron ore also stagnated, iron ore, coal, petroleum products, and construction and the deficient condition of the rail system serving materials. Egypt holds a high potential for developing the mines led to a decline in rail transport since the the freight transport by rail. A better connectivity 1990s, with traffic also partly taken over by road with the major ports of Egypt (Alexandria, Port Said, transport. On the other segments of the freight Damietta, among other ports) could significantly market, including container traffic, railway companies increase the market share of the rail transport, are subject to fierce competition from the trucking especially for container traffic. Figure 7.3. Average Railway Tariffs in North African Countries, 2018–2019 10 US¢ per net ton-kilometer or passenger-kilometer 8 Passenger tariff (US¢/pkm) Passenger tariff 6 (US¢/pkm) (PPP) Freight tariff (US¢/ntkm) 4 Passenger median tariff (US¢/pkm) (PPP) 2 Freight median tariff (US¢/ntkm) 0 Algeria Egypt Morocco Tunisia Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 75 Pricing In Egypt, in 2019 the average revenue for passenger traffic amounted to LE0.065 Egyptian pounds The passenger fares shown in figure 7.3 are (equivalent to 0.4 US cent) per passenger-kilometer. systemwide averages over all classes of passengers, This very low level of revenue derives principally heavily weighted toward the standard (or economy) from low level of official tariffs approved by the class in all countries. The price differential between government and from important discounts imposed standard class and upper class is significant. The on official tariffs by the government for various average fare in Egypt is very low by world standards. categories of travelers (for example, students, In Morocco, ONCF de facto enjoys wide flexibility to military, retirees). The government allocates annually set Intercity passenger tariffs. In Algeria and Tunisia, lump-sum funds as subsidy for passenger transport. all passenger tariffs applied by SNTF and SNCFT must They are not structured as a real public services be formally approved by the respective Ministry of contract, (performance-based based compensation 10 US¢ per net ton-kilometer or passenger-kilometer Transport, similar to the process for all other public for the provided services) and do not cover the full passenger transportation tariffs. In practice, during deficit of the provided services. 8 Passenger tariff the recent past, the ministry has been reluctant to The government of Egypt has recently increased (US¢/pkm) approve tariff increases, particularly in Tunisia. This Passenger freight tariffs, but the very low volume tariff of traffic 6 situation has badly affected the financial situation (US¢/pkm) (PPP) does not allow achieving financial sustainability. Freight tariff The of the railway enterprise. For PSO suburban average revenue for freight transport by rail in Egypt (US¢/ntkm) services, 4 the railway companies receive financial in 2019 was about LE0.27 (equivalent to 1.7 Passenger US cents) median compensation from the government, on a lump- per ton-kilometer. tariff (US¢/pkm) (PPP) sum basis 2 for SNTF and under elaborate contractual Freight median tariff (US¢/ntkm) arrangements conducive to efficient operation of Traffic density service 0 and improvement of quality of service by SNCFT. Algeria Egypt Morocco Traffic density is important because railway Tunisia infrastructure has relatively high fixed costs and For freight tariffs, ONCF, SNTF, and SNCFT are low variable costs. As a result, railway profitability is entitled to freely negotiate tariffs with customers. normally highly correlated with traffic density. Figure However, government arbitration might be necessary 7.4 shows the traffic densities for the North African when a state-owned enterprise is also a major railways. Egypt has the highest network density, at customer (for example, the phosphate company in 7.7 million traffic units.2 Tunisia). Figure 7.4. Railway Traffic Density in North African Countries, 2018–2019 Traffic units per route-kilometer (millions) 10 8 6 4 2 0 Algeria Egypt Morocco Tunisia Median traffic density Source: See appendix B for country-level source information. 76 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Network traffic density—along with labor the very low volume of more profitable freight productivity—are high in Morocco, thanks to heavy transport, and the lack of clear relationships of the phosphate traffic and dense intercity passenger ENR with the government concerning the financial traffic; they are both major determining factors in compensation for the passenger services as well as the sound financial situation enjoyed by ONCF. In the financial contribution on the management of the Tunisia, network density traffic fell from 1.8 million infrastructure have nullifed the advantage of Egypt’s traffic units in 2010 to 0.9 million in 2018 (staff excellent traffic density. productivity fell from 770,000 units per employee to 360,000) because of a traffic plunge following Productivity the 2011 revolution. While SNCFT was not far from Labor and asset productivity (locomotive and wagon financial equilibrium in 2010, its financial situation utilization) present a similar picture to network has seriously worsened after 2011. In Algeria, density. Figure 7.5 presents estimated labor traffic density, staff productivity, and rollingstock productivity for the North African railways. productivity are particularly low and serve as the main explanatory factors of SNTF’s dismal financial The ENR steadily reduced its staff during the last two situation. In fact, SNTF presently operates a railway decades (from 84,977 in 1999 to 44,777 in 2019) for whose size and configuration would allow it, with maintaining a good productivity of staff. In 2019, the only limited additional assets, to handle three or four ENR achieved a productivity of about 884,000 traffic- times the present volume of traffic. In 1990, SNTF unit per staff—a strong number for a passenger- was carrying nearly 6 billion traffic units (compared oriented railway with a high density of stations and a to 2.4 billion in 2018) on a smaller network than now. high number of trains operated daily. However, this Increasing traffic is thus the major challenge facing indicator must be assessed in the general context SNTF for the years to come. of the railway transport condition in Egypt. Staff productivity may be considered as high compared The high traffic density in Egypt comes from the with other passenger railways in the world (the dense operation of passenger traffic. ENR operates average staff productivity in the European Union about 84 percent of the traffic realized by the railways was about 696,000 traffic-units per staff in Italian railways on a network a third the length 2019). of Italy’s. However, the very low level of tariffs, Figure 7.5. Railway Labor Productivity in North African Countries, 2018–2019 Traffic units per employee (thousands) 1,000 0 Algeria Egypt Morocco Tunisia Labor productivity Median labor productivity Source: See appendix B for country-level source information. Traffic units per employee (thousands) RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 1,000 77 Quality of service service, damage, and cargo security. Shippers of bulk traffic will also weight cost as an important factor. It is difficult to find an indicator of quality of service The indicator adopted for this study is the World applicable across all 0 railways. If the public is Economic Forum (WEF) survey on the quality of surveyed, their response will inevitably Algeria be in terms of Egypt Morocco Tunisia railroad infrastructure for 2017 and 2018.3 The quality passenger service, and this will also be theLabor case with productivity Median labor productivity of railway service covers a wide range of activities many businesses in the service sector. Manufacturers and, because the assessments are done by local will consider the quality of the general freight service, businesses, they offer no guarantee of consistency in either domestically or, more broadly, the handling the scores, although the order of magnitude provides of import/export shipments. Manufacturers will be a general guide (see figure 7.6). primarily concerned with speed and reliability of Figure 7.6. Indexes of Rail Quality in North African Countries, 2017–2018 7 6 5 Index of rail quality 4 3 2 1 Algeria Egypt Morocco Tunisia Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. 78 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Notes 1. ETCS (European Train Control System) is the core signaling and train control component of ERTMS, (the European Rail Traffic Management System). ETCS uses balises installed along the track which communicate with onboard equipment on the locomotives, continuously calculating a safe maximum speed for each train. The on-board systems that take control and decrease the speed or stop the train if the permissible speed is exceeded by the driver. 2. Traffic units equal the sum of passenger-kilometers and net ton-kilometers. 3. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References WEF (World Economic Forum). 2017. Global Competitiveness Report 2017–2018. Geneva: World Economic Forum. https:// www.weforum.org/reports/the-global-competitiveness-report-2017-2018. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 79 Chapter 8: Railways in Sub-Saharan Africa 80 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Introduction1 In the latter years of the 20th century, the role of rail demand was generally insufficient to make the in Sub-Saharan Africa (SSA) changed considerably. investments profitable. Fifty years ago, many of the railway systems were However, rail infrastructure improvements carrying a high share of their country’s freight encouraging modal shifts generate benefits in terms traffic. Often competing road transport had poor of lower road congestion and maintenance costs, infrastructure or faced restrictive regulations. accidents, pollution, and greenhouse gas emissions Rail customers were established businesses with (GHG). These benefits, which accrue to the public as physical connections to rail, and government policy a whole, typically add 20 percent to 40 percent to the encouraging parastatals to transport by rail. As pure financial benefits captured by a concessionaire. transport was liberalized and roads were improved, Starting in 2005, these economic benefits were rail faced much stronger competition. Railways lost reflected in second-generation concessions that traffic, and many entered a vicious cycle of decline. shifted responsibility for funding infrastructure Although some upgrading has occurred, most SSA investment to government. networks carrying general freight and passengers In recent years, many governments across Africa are still operating to the standards to which they have therefore taken a renewed interest in were originally constructed (see map 8.1). Many rehabilitating and upgrading their railways, or in structures and even some trackwork are now more constructing new ones. They desire to improve their than 100 years old. Many railways have small-scale, logistics efficiency and promote a green mode of undercapitalized networks operating with relatively transport less carbon intensive than road. Major new low axle load, and at low speed. Combined with lines have been constructed to higher standards chronic under-maintenance over a long period of (heavier axle loads and higher speeds), using time, many sections of track have deteriorated, third-party finance. However, good infrastructure, almost to the point of no return. This is a significant though an important prerequisite, is not by itself handicap for railways competing against modern sufficient to create a successful railway. Well- roads, which are increasingly being constructed in maintained infrastructure needs to be combined major corridors. with a commercial business model that provides To encourage the commercialization of the railways competitive levels of service, develops new markets, and reduce the burden on government finances, and responds rapidly to changes in customers’ several countries concessioned their rail systems requirements. from the 1990s on. Some of these concessions The railways in Africa can be divided into four broad were successful in terms of stabilizing, or even groups: increasing, traffic volumes. Others were less so, with some concessions canceled and returned • Mineral railways: These railways transport to government control, albeit often at a much several million tons of traffic per year, typically higher level of efficiency. One of the hopes for from a mine to a port. They are usually financially concessioning was that concessionaires would self-sustaining, have high-quality infrastructure, themselves fund infrastructure improvements. Yet, and provide efficient service integrated into the few concessionaires had either the finances or the main client’s operations. inclination to make such investments because traffic RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 81 • New railways: These railways carry both high-quality services. They are often in challenging passengers and general freight on newly built financial straits. infrastructure. They provide relatively high- standard services, though many are not financially • Commuter railways: These railways carry self-sustaining—raising questions about passengers in urban areas and typically use maintaining the high-standard service over the existing infrastructure. The exception is the newly longer term. built Gautrain in South Africa. Although the mineral railways are typically efficient • Legacy railways: These railways carry both and financially sustainable, many of the others face a passengers and general freight on historical range of challenges that can be broadly summarized infrastructure. These railways typically have as governance, funding, and traffic volume. deteriorated assets and are unable to provide Map 8.1. Railways in Sub-Saharan Africa Source: Map produced by the World Bank Cartography Unit. 82 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Institutional Arrangements Until the 1980s, nearly all African railway companies Most countries in Central, East, and West Africa have were publicly owned corporations, working with at one time or another moved all or part of the way to varying degrees of financial and management concessioning (see figure 8.1). autonomy. Attempts at commercialization while in Those railways that have not been concessioned public ownership were generally unsuccessful, and or have since returned to government ownership concessions began in the 1990s. Under these, the remain subject to significant political and state remained the owner of some or all the existing governmental influence. Specific arrangements assets, typically infrastructure, and transferred the vary across countries, but the sectoral ministry other assets—generally the rollingstock, along with (normally transport) generally exercises political and the responsibility for operating and maintaining the administrative control, while the country’s Ministry of railway infrastructure—to a concessionaire. Finance normally exercises financial control. Board Figure 8.1. Public vs. Private Sector Participation in Railways Across Sub-Saharan Africa Source: Map produced by the World Bank Cartography Unit. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 83 directors are typically a combination of ministry The concessions also do not always include the entire officials and internal senior management, themselves network, with lightly used branch lines sometimes often appointed by the government. Oversight is excluded. The initial duration of concessions varies nominally assigned to parliament, but in practice from 15 to 30 years, and the concessionaire is free to such control may be limited to an audit of company operate its activity as a business, with freight tariffs accounts presented in its annual report, often generally market determined, and passenger fares disclosed several years in arrears. Although the subject to some form of indexation. Although formal governing regulatory frameworks nominally provide regulatory structures with real teeth are rare in SSA, financial and management autonomy, in practice this if a concessionaire fails to comply with the terms is considerably limited by the many opportunities of the concession, whether by design or by force allowed for intervention by the state. This conflict of circumstances, procedures could be followed to between control and decision functions—and the terminate the concession. These have been applied in frequent review by political authorities of initiatives several cases, with the railway either reverted to the and decisions under consideration by government’s government or transferred to another operator. authorized representatives in the corporation—does The rail concessions in SSA have attracted a limited much to discourage management initiatives and pool of mainly foreign private operators. Private effectiveness. companies are the majority shareholders in all Except for the railways immediately adjacent to concessions to date. In Madagascar, the government South Africa, the networks with no or only partial holds 25 percent of Madarail, while governments concessions have continued to deteriorate over the own 10 percent to 20 percent in Sitarail (Côte d’Ivoire/ past two decades. In some cases, these declines Burkina Faso) and Camrail (Cameroon). This gives could prove terminal. Many railways have been left government representation on the concession to deteriorate for too long and would require major company’s board and ensures the government has investment to permanently reverse the situation. access to adequate information on the concession company’s performance. Local private participation Concessions in concessions has generally been relatively low Of the 32 SSA countries with operating railways, and often fraught with problems during the bidding 18 have opted for a concession arrangement at process. some time since 1992. However, seven countries The concessions have not been without problems. have canceled their concessions, an additional four In many cases, concessions faced difficulty in finding have been reassigned, and two have been badly more than a few bidders, and in several cases, they affected by war and natural disasters.2 The process had insufficient financial resources to finance the of concessioning has often taken three to five years major investments required. Concessionaires were from concept to signed contract, sometimes much generally unenthusiastic about running passenger longer, and a wide range of arrangements on cost- services, which often had regulated tariffs that sharing between the concessionaire and government did not recover service costs. Delays and disputes have been implemented. about the payment of government compensation With little scope on most African networks for for unprofitable services also presented a challenge. on-rail competition, few governments have seriously Further problems arose concerning the level of considered the European model of full vertical concession fees, the length of the concession, and separation. However, some third-party operators the redundancy arrangements for staff no longer carry their own traffic over government lines, such required after network concessioning. In some cases, as in Kenya and Senegal, and a through-freight this led to renegotiation of the concession contract. service operated for some years from South Africa to Many concessions initially relied heavily upon the Tanzania. lending of international financial institutions (IFIs) 84 MOBILITY AND TRANSPORT CONNECTIVITY SERIES or bilateral loans to finance infrastructure. Though lacked funds for infrastructure renewal, creating a these offered below-market borrowing costs, major disappointment for many governments. lengthy loan tenors, and grace periods, they were Few, if any, of the concessions not related to minerals often slow to mobilize. Much of this investment generate significant profits for their operators and addressed backlogs in maintenance and renewal, certainly not enough to fund long-term renewals or without which railways could not function, and thus improvements. Although most concessionaires pay can be characterized as one-off investments to get concession fees into general government revenue, struggling systems back on their feet. none could probably afford to do even this if they Most of the early concession agreements clearly put were properly accruing funds for future renewals. the responsibility of financing track maintenance As a result, a different model has now emerged, in and renewal on private operators. When rosy traffic which governments assume greater responsibility for projections failed to materialize, concessionaires infrastructure funding. Current Situation Networks in Togo and Ghana to more than 23,000 route- kilometers in South Africa (figure 8.2).3 Railway development followed a similar pattern As shown in figure 8.3, most railways in SSA use in almost all SSA countries. Isolated lines headed either Cape gauge (1,067 millimeters or 3 feet, inland from a port to reach a trading center or a 6 inches) or meter gauge. The main network in mine, and over time a few branch lines were built Southern and Central Africa is Cape gauge, which out from the main line. Many of the lines were state- is also used in some Anglophone countries farther owned, but some were constructed as concessions north. Meter gauge is used in most of Francophone or by a mining company as an integral part of its Africa and much of East Africa. While several isolated operation. As a result, although grand master plans railways use standard-gauge (1,435 millimeters) lines, have existed for over a century, most African lines primarily for mineral traffic, Nigeria is developing remain disconnected, linking a port and its immediate a standard-gauge network to serve its new capital regional hinterland. The only significant international of Abuja. Several lines with gauges as narrow as network is centered on South Africa, stretching north 600 millimeters have operated at various times, but to Zimbabwe, Zambia, and the Democratic Republic of most are now derelict. New stand-alone railways Congo, and west to Namibia and Botswana. However, constructed in the last 20 years are largely standard trade between African countries (other than to and gauge, including those in Ethiopia, Kenya, Tanzania, from South Africa) has always been small, due in Guinea, and the Gautrain in South Africa.4 large part to the similarity in the products exported, suggesting such interregional links would have been Almost all networks are single-track, except for only lightly used even if they had existed. sections of the South African network. Much of the South African network is electrified. The only other At the end of 2019, railways were operating in 32 railways with electric power supply in SSA operate countries in SSA (as shown in map 8.1), totaling in the mining region of the Democratic Republic 65,760 route-kilometers, with individual railways of Congo, a short section (currently abandoned) ranging in length from under 100 route-kilometers in Zimbabwe, and the new Djibouti–Addis Ababa RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 85 25,000 Figure 8.2. Railway Network, by Country, in Sub-Saharan Africa 20,000 25,000 Route-kilometers 15,000 20,000 Route-kilometers 10,000 15,000 5,000 10,000 0 5,000 Benin& CFB only) Benin Cameroon Botswana Republic of Congo Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea Ethiopia - Djibouti eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mozambique Mauritania Mozambique Nigeria Namibia Nigeria Senegal - Mali Sierra Leone SudanSouth Africa Sudan Tanzania (TRC) Togo TAZARA Togo Zambia Uganda Zambia Zimbabwe Malawi (CEAR only)Madagascar 0 Angola (CFL & CFB only) Botswana Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Gabon Ghana Guinea Kenya Liberia Mauritania Namibia Senegal - Mali Sierra Leone South Africa Tanzania (TRC) TAZARA Uganda Zimbabwe Madagascar Angola (CFL Source: See appendix B for country-level source information.. Figure 8.3. Railway Network by Region and Gauge in Sub-Saharan Africa 40 Route-kilometers (thousands) 40 30 Route-kilometers (thousands) 30 20 20 10 10 0 Southern Africa East Africa Central Africa West Africa Standard gauge Cape gauge Meter gauge 0 B for country-level source information. Source: See appendix Southern Africa East Africa Central Africa West Africa Standard gauge Cape gauge Meter gauge railway. Most railways have considerable sections Signaling on many networks still relies on manual of track that require repair or replacement. Some systems. On most lines, the low train density means countries have major sections not in use and will using mechanical signals or train orders is quite require rehabilitation before any operations can adequate from a capacity viewpoint, which often recommence. Even where services are operational, leads to significant safety problems as a result of poor track conditions forces speed restrictions human error. Even where power signaling has been over long sections, resulting in a loss of railway installed, it is often not operational due to lack of competitiveness and rollingstock productivity. electricity and dilapidated cable networks. Telephone 86 MOBILITY AND TRANSPORT CONNECTIVITY SERIES exchanges in many companies are similarly obsolete, hundred thousand tons and almost no passengers, with limited capacity and spare parts virtually to South Africa, with 215 million tons and 285 million impossible to find. passengers in 2018 (figure 8.4). In summary, most general-purpose SSA railways face Specialized mineral lines in West and Southern Africa major infrastructure challenges, primarily associated carry more than half the freight (as measured by with (1) aging track (insufficient ballast, rail wear— net ton-kilometers). South Africa has by far the most especially on curves—deteriorating earthworks, and heavily used network, with its specialist Transnet coal formation); (2) civil works (most structures are in poor and ore export lines. Southern Africa as a whole also condition); and (3) signaling and telecommunications dominates general rail freight, handling more than (obsolete equipment and lack of spare parts). The 80 percent of the freight traffic on the nonmineral cost of rehabilitating such lines is large compared lines. It also dominates the passenger business, to the existing traffic volumes and revenues. How to with more than 70 percent of passenger-kilometers, rehabilitate the lines on a sustainable basis is the key largely because of its heavy commuter passenger issue faced by most SSA railways. business. An increasing number of SSA cities also operate (or have operated) commuter services; Traffic however, except for in Dakar, these are generally one or two peak-hour services a short way out along the In total, the SSA railways carried 300 million tons (181 main line. billion net ton-kilometers) of freight and 305 million passengers (12 billion passenger-kilometers) in their Most SSA railways are small by world standards, with last reported year. These railways range in traffic the busier railways carrying only 1 billion traffic units from the small West African railways carrying a few per year. In contrast, Transnet in South Africa carries Figure 8.4. Railway Traffic in Sub-Saharan Africa 16 14 12 Traffic units (billions) 10 8 6 4 2 0 Angola (CFL & CFB only) Benin Botswana Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mauritania Mozambique Namibia Nigeria Senegal - Mali Sierra Leone Sudan Tanzania (TRC) TAZARA Togo Uganda Zambia Zimbabwe Madagascar Passenger-kilometers Net ton-kilometers Source: See appendix B for country-level source information. Note: South Africa is not shown in the graph because its scale would dwarf all the other railways. South Africa had 6,788 million passenger-kilometers and 152,410 ton-kilometers. 18 eter 16 RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 87 this volume of traffic every three days. In overall with export crops. Imported flows are mostly terms, most SSA railways carry volumes similar to manufactured products, such as cement, petroleum a moderately busy branch line on other railways. products, and general freight. On some systems, In some cases, this is due to lack of demand, but much of the general freight is containerized (higher- in others it is caused by shortages of rollingstock, value cash crops are increasingly traveling in this particularly locomotives. way), particularly when the trip involves crossing a Most railways in SSA carry far more freight than country border before the port. Unlike for passenger passengers—freight averages more than 90 percent services, having significant imbalances between of total traffic units. Almost all railways in SSA carry traffic in the two directions is common. Even where some passenger traffic; only Eswatini and, from 1998 tonnage is approximately balanced, the differences in until recently, Uganda operate freight-only railways. the commodity mix, with many requiring specialized However, the nonurban passenger business is wagons, means trains are rarely fully loaded in both steadily diminishing in importance, and several of the directions. In some cases, this natural imbalance railways that retain a reasonable passenger business in traffic is accentuated for rail as road vehicles only do so because competing road networks either delivering imports tend to backload freight at do not exist or are in very poor condition. The only marginal cost, leaving rail to transport the remaining significant cross-border passenger flows are on the freight without a compensating return load. Sitarail, Transrail, and TAZARA networks. Since 2005, most SSA countries have experienced While the average freight haul on SSA networks is steady economic growth, with corresponding relatively long compared to network size, it is not increases in trade and per capita gross domestic especially so in terms of competing with road. Some product (GDP). However, despite the generally railways carry predominantly end-to-end traffic; favorable economic background, only a few railways Tanzania Railways Corporation (TRC), TAZARA, and have experienced a growth in traffic. These include Transrail (when it was operating) all haul freight several railways with large volumes of mineral an average distance of 1,000 kilometers. Some traffic—South Africa, Eswatini, Mozambique, and smaller railways, such as the network in Uganda or Gabon—and only mixed-traffic railways, Sitarail and Central East African Railways (CEAR), act as feeders Ethiopia–Djibouti Railway. When available, 2019 data to other systems that subsequently on-carry the for Kenya and Ethiopia are also expected to show traffic a further few hundred kilometers. These increases. Long-distance passenger traffic has mostly systems have a good chance of competing for stagnated or declined, apart from the services on the general freight traffic, even as the road network is new Kenyan and Ethiopian lines. Previously almost improved, as long as satisfactory service levels can be unknown outside South Africa and Senegal, suburban achieved. However, the shorter systems that require passenger traffic has emerged across SSA. transshipment to road at railheads will generally find This growth or decline of traffic has often had little they need to be innovative, efficient, and customer to do with changes in the underlying demand. War friendly to compete effectively, even for bulk traffics. or natural disaster has often had a major impact. Freight traffic on SSA railways is dominated by bulk On some railways, the volume carried is constrained and semibulk commodities, principally to and from by insufficient rollingstock, particularly locomotives. ports. The actual traffics carried reflect the economic Many smaller SSA railways have a low locomotive structure of the regions served by the railway. availability. When this is addressed, either through Mining products are important in several countries new or secondhand locomotives being obtained, (for example, Gabon, Guinea, Liberia, Mauritania, or through locomotive rehabilitation, traffic Mozambique, Sierra Leone, and South Africa). Timber often increases accordingly. The increase in road is important throughout West Africa, together competition is also a key factor. 88 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Pricing 16 on other general-freight railways in comparable countries. Tariffs are generally constrained by Almost all14passenger services face strong competition, either from road or from alternative competition from buses and shared taxis in both rail routes (particularly in West Africa, the Great price and12 service frequency. Few corridors remain in Lakes region, Malawi, and Zambia) and are also Traffic units (billions) which rail10passenger services are the only effective influenced by the traditional value-based tariff means of transport. Bus fares are typically about structures, length of haul, the relative cost of carrying 8 30 percent to 50 percent higher than the economy different commodities (as reflected in net tons per rail fares, which 6 typically range from US$0.01 to wagon roundtrip), direction of travel, and volume. US$0.03 per passenger-kilometer, as shown in However, in spite of most rail rates being well below 4 figure 8.5. However, on most routes, buses are comparable road rates, especially for traffics such as faster (sometimes 2 twice as fast), with generally a containers, rail typically only carries 20 percent to 50 much higher service frequency. Many competing percent of the traffic in a corridor, and some of the 0 bus services suffer from the same problems as rail: smaller state-owned railways have a much smaller Angola (CFL & CFB only) Benin Botswana Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mauritania Mozambique Namibia Nigeria Senegal - Mali Sierra Leone Sudan Tanzania (TRC) TAZARA Togo Uganda Zambia Zimbabwe Madagascar often unreliable departures, delays, breakdowns en share. route, and overcrowding. Although rail is generally Line-haul tariffs are only part of the price equation perceived as safer and, on some routes, allows the for freight traffic. Much is often made of the carriage of large quantities of produce and baggage, inherent lower cost of rail as compared to road. bus typically claims the lion’s share of the market. This is certainly true where minerals must be Average freight tariffs typically5 range from US$0.03 Passenger-kilometers Net ton-kilometers transported from a rail-connected mine to a rail- to US$0.06 per net ton-kilometer, similar to tariffs connected port. But the advantage is less clear-cut Figure 8.5. Railway Average Tariffs in Sub-Saharan Africa 18 US¢ per net ton-kilometer or passenger-kilometer 16 14 12 10 8 6 4 2 0 Angola (CFL & CFB… Benin Botswana Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mauritania Mozambique Namibia Nigeria Senegal - Mali Sierra Leone South Africa Sudan Tanzania (TRC) TAZARA Togo Uganda Zambia Zimbabwe Madagascar Passenger tariff (US¢/pkm) Freight tariff (US¢/ntkm) Passenger tariff (US¢/pkm) (PPP) Passenger median tariff (US¢/pkm) (PPP) Freight median tariff (US¢/ntkm) Source: See appendix B for country-level source information. Note: ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; US¢ = US cent (1/100 of US$1). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 89 for medium-distance general freight, which is also high fixed costs and low variable costs. For railway often transported by road to and from the railheads. infrastructure, the proportion of fixed costs will Haulage between the railway and the ultimate origin “differ by lines and traffic levels but rarely is and destination can often cost up to the equivalent of estimated at less than 70 percent” (World Bank 2017) 200 to 300 kilometers of line-haul transport, negating and is often closer to 100 percent for low-density any advantage rail may have in pure line-haul tariffs. lines. As a result, railway profitability is normally New sidings are sometimes constructed, but these highly correlated with traffic density. Railways with need a minimum traffic volume to be economical high dedicated minerals flows thus tend to be more for a railway. Traffic that needs to be transshipped profitable and financially sustainable. at a central depot before dispatching by rail is thus Traffic volumes on general-purpose SSA railways more vulnerable to road competition, and even bulk are low, and network densities (expressed as traffic traffics are not immune if distances are not too great. units6 per route-kilometer) are correspondingly In many countries collection and distribution chains low. The highest average network traffic densities for many commodities are being streamlined, often outside South Africa and Eswatini are in Mauritania involving the elimination of upcountry depots and (12 million traffic units), Gabon (6.5 million traffic distribution centers, and marketing channels have units), and Mozambique (5.2 million, largely driven become more diversified. Railways have often been by the Nacala traffic). Cameroon (1.3 million) is the slow to respond, steadily losing market share, and only other railway to be over 1 million, although this again emphasizes the need for SSA railways both Kenya and Ethiopia should have easily reached to actively develop efficient multimodal services this density by 2019.7 Many other railways average specifically designed for customer needs. under 500,000 (figure 8.6). By comparison, in Europe most systems average 2 million to 5 million, with Network density densities below 1 million found only in Albania and Network density is important because railways, Montenegro. SSA railways are therefore mostly especially railway infrastructure, have relatively lightly used by world standards. Figure 8.6. Railway Traffic Density in Sub-Saharan Africa 14 Traffic units per route-km (millions) 12 10 8 6 4 2 0 Angola (CFL & CFB only) Benin Botswana Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mauritania Mozambique Namibia Nigeria Senegal - Mali Sierra Leone South Africa Sudan Tanzania (TRC) TAZARA Togo Uganda Zambia Zimbabwe Madagascar Passenger-kilometers per kilometer Net ton-kilometers per kilometer Median traffic density Source: See appendix B for country-level source information. 7,000 ds) 6,000 90 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Many networks struggle to generate enough funds characteristics of the concessions has been the sharp from their own resources to maintain and renew improvement in these indicators, partly because of their infrastructure as required. It is possible to growth in traffic, but mostly due to major reductions operate 14railways without external financial support at in the workforces and the disposal of life-expired these densities, but not forever—and generally only rollingstock. Traffic units per route-km (millions) 12 with a low level of service. For low-value traffic items, Almost all railway companies have streamlined their 10 necessarily a problem, but for passenger this is not work forces over the past 20 to 25 years. This was services and for higher-value freight subject to road often the prelude to concessioning; however, in 8 competition, it presents a very difficult task. If a some cases has also been part of a general policy to 6 government wants a reasonable level of service at improve efficiency. Despite this, labor productivity such densities, it would need to provide ongoing on most SSA systems is relatively low by world 4 financial support. standards, with few railways achieving over 500,000 2 traffic units per staff per annum (see figure 8.7). Productivity 0 Rollingstock productivity is similarly low, with the root cause generally being low availability caused Angola (CFL & CFB only) Benin Botswana Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mauritania Mozambique Namibia Nigeria Senegal - Mali Sierra Leone South Africa Sudan Tanzania (TRC) TAZARA Togo Uganda Zambia Zimbabwe Both labor and asset productivity (locomotive and Madagascar by lack of spare parts. The low labor productivity wagon utilization) are low in many SSA networks often reflects the continuing use of labor-intensive compared to railways elsewhere, due to the poor methods with relatively little outsourcing. But for condition of the infrastructure and rollingstock many systems with very low productivity, it is the and low traffic levels. One of the most visible consequence of traffic steadily declining without Passenger-kilometers per kilometer Net ton-kilometers per kilometer Median traffic density Figure 8.7. Railway Labor Productivity in Sub-Saharan Africa 7,000 Traffic units per employee (thousands) 6,000 5,000 4,000 3,000 2,000 1,000 0 Angola (CFL & CFB only) Benin Botswana Cameroon Republic of Congo Cote d'Ivoire/BF DRC (NCC only) Eritrea eSwatini Ethiopia - Djibouti Gabon Ghana Guinea Kenya Liberia Malawi (CEAR only) Mauritania Mozambique Namibia Nigeria Senegal - Mali Sierra Leone South Africa Sudan Tanzania (TRC) TAZARA Togo Uganda Zambia Zimbabwe Madagascar Labor Productivity Median labor productivity Source: See appendix B for country-level source information. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 91 any adjustment to staff levels. With low wages, the concession in Gabon, is backed by mineral traffic direct financial impact is not always fatal. But a large and makes a healthy profit that finances two-thirds body of staff who are semi-employed has a corrosive of an annual investment program of more than €40 effect on morale and is a strong disincentive for million (approximately US$45.4 million). those who wish to improve efficiency. It is also a Passenger services generally do not contribute powerful factor in limiting the general pay level of significantly to the cost of maintaining infrastructure rail workers. Unless salary levels are competitive, or to covering corporate overheads. Many passenger railways find it hard to recruit and retain technically services struggle to cover their marginal costs (train competent employees or to introduce the crew, rollingstock maintenance, fuel and/or traction technology required to improve service levels, for electricity, and passenger handling costs). Passenger which a better-paid and more skilled workforce is tariffs on many railways are essentially administered, essential. often within a framework that only includes a subset Labor and asset productivity improved steadily in of total costs. Many of the more poorly performing most concessions, typically doubling as a result of systems in SSA would be unable to cover above-rail the large workforce reductions either prior or at the working expenses on a systemwide level even if they time of concessioning, the scrapping of obsolete had the freedom to set their own tariffs. rollingstock, and, in most cases, the increased traffic Freight services normally cover their avoidable volumes. Where concessions have been canceled, operating costs. Some earn enough to also cover and the railways reverted to public ownership, rollingstock capital costs and even infrastructure these productivity improvements have largely been costs. This is a function of, on the revenue side, the maintained. tariff rate and the average wagon loading and, on Safety is also an important aspect of operational the cost side, factors such as train size, commercial performance. Rail travel is still safer than road travel, speed, and rollingstock utilization and availability. but its record in SSA is much worse than comparable General freight can typically earn enough to make railways elsewhere. This is caused by a combination operating services worthwhile, but only in some of obsolete track infrastructure, poorly maintained cases can it fund replacement rollingstock and very rollingstock, and lack of operational discipline. rarely can it earn enough to finance infrastructure However, as with productivity, safety has generally renewal. improved following concessioning. Quality of service Profitability It is difficult to find an indicator of quality of Most state-owned railways in SSA just about break service applicable across all railways. If the public even on a cash basis, after receipt of government is surveyed, their response will inevitably be in support. But often this is only because a significant terms of passenger service, and this will also be the amount of maintenance has been deferred. When case with many businesses in the service sector. the maintenance backlog becomes too great, it is Manufacturers will consider the quality of the typically addressed using a loan with the expenditure general freight service, either domestically or, more treated as investment. The two companies that have broadly, the handling of import/export shipments. been concessioned the longest, Sitarail and Camrail, Manufacturers will be primarily concerned with make modest cash surpluses, but in recent years the speed and reliability of service, damage, and cargo substantial depreciation allowances have generated security. Shippers of bulk traffic will also weight cost overall losses. By contrast, SETRAG, another rail as an important factor. 92 MOBILITY AND TRANSPORT CONNECTIVITY SERIES The indicator adopted for this study is the World the scores, although the order of magnitude provides Economic Forum (WEF) survey on the quality of a general guide (see figure 8.8). railroad infrastructure for 2017 and 2018.8 The quality To provide some context for these indexes, the of railway service covers a wide range of activities Unites States scores 5.48, Germany 5.5, Japan 6.58, and, because the assessments are done by local and Australia 4.07.  businesses, they offer no guarantee of consistency in Figure 8.8. Railways Indexes of Rail Quality in Sub-Saharan Africa, 2017–2018 7 6 5 Index of rail quality 4 3 2 1 0 Angola Benin Botswana Burkina Faso Cameroon Republic of Congo Cote d'Ivoire Democratic Republic of Congo Eritrea eSwatini Ethiopia Gabon Ghana Guinea Kenya Liberia Malawi Mali Mauritania Mozambique Namibia Nigeria Senegal Sierra Leone South Africa Tanzania Togo Uganda Zambia Zimbabwe Madagascar Quality of railroads (1 to 7 best) Median quality of railroad score Source: WEF 2017. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 93 Notes 1. This chapter is an abridged version of Lawrence and Bullock (2020). 2. A detailed review of the concessions operating in 2005 is given in Bullock (2005) and Pozzo di Borgo (2006). 3. All figure graphs in this chapter, with the exception of figure 8.8, include data for TAZARA, a railway jointly owned by Tanzania and Zambia. The data for Tanzania represents the Tanzania Railway Corporation and Brazzaville for Congo. 4. Interoperability has not been a significant issue because few places have two gauges in the same location. This could become more of an issue as new standard-gauge lines are constructed. 5. Other than the special case of the Democratic Republic of Congo. 6. The traffic units carried by a railway equal the sum of the passenger-kilometers and net ton-kilometers. Although it has some limitations as an indicator, for example, a first-class passenger-kilometer in a train à grande vitesse (TGV) is treated identically with a passenger-kilometer in a crowded suburban train; it is a widely used, simple standard measure. 7. Data are mostly from 2018. 8. The Quality of Railroad Infrastructure indicator is one of the components of the Global Competitiveness Index published annually by the World Economic Forum (WEF). It represents an assessment of the quality of the railroad system in a given country based on data from the WEF Executive Opinion Survey, a long-running and extensive survey tapping the opinions of more than 14,000 business leaders in 144 countries. The score for railroad infrastructure quality is based on only one question. The respondents are asked to rate the railroads in their country of operation on a scale from 1 (underdeveloped) to 7 (extensive and efficient by international standards). The individual responses are aggregated to produce a country score. References Bullock, Richard. 2005. “Results of Railway Privatization in Africa.” Transport Papers Series TP-8. World Bank, Washington, DC. https://openknowledge.worldbank.org/handle/10986/17415. Lawrence, Martha, and Richard Bullock. 2020. “Modern Railway Services in Africa: Building Traffic—Building Value.” World Bank, Washington, DC. https://openknowledge.worldbank.org/handle/10986/34576. Pozzo di Borgo, Pierre. 2006. “Review of Selected Railway Concessions in Sub-Saharan Africa.” World Bank, Washington, D.C. https://www.ssatp.org/sites/ssatp/files/publications/WorldBank-WorkingPapers/ESW-RailwayConcessions.pdf. World Bank. 2017. Railway Reform: Toolkit for Improving Rail Sector Performance. 2nd edition. Washington, DC: World Bank. http://hdl.handle.net/10986/30734. RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 95 Appendices 96 MOBILITY AND TRANSPORT CONNECTIVITY SERIES RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 97 Appendix A: Developing Country Railway Database Quality of railroad Length of railway in route-kilometers (operational) Length of Freight Freight traffic Combined infrastructure electrified Number of Number Volume of traffic, Number of Passenger Passenger rail Passenger rail Freight rail density Passenger density Traffic (1=worst, 7=best) LPI rating 1676 1435 1067 1000/760 Total railway Number of Number of passenger of freight freight, in tons in ntkm passengers traffic, in pkm fare, in US¢/ fare, in US¢/ rate, in US¢/ (million density (million units/staff Score with ranking Score with Country Data Year (route-km) locomotives multiple units cars wagons (thousands) (millions) (thousands) (millions) pkm pkm (PPP) ntkm tonnes) (millions) traffic units) Staff (thousands) in () ranking in () LATIN AMERICA Argentina 2018 11,473 1,486 — 4,897 17,856 0 345 — — 15,649 18,835 9,140 3,101 775 2.31 4.6 2.8 0.51 0.04 0.56 7,061 1,404 2.12 (83) 2.89 (61) Argentina (suburban) 2018 805 26 — 120 951 257 142 1,130 803 — — — 424,183 9,132 2.51 5.0 — — 9.60 — — — — — Bolivia 2018 — — — 3,087 3,087 0 49 8 15 2,223 3,349 1,887 117 26 1.91 5.1 4.1 0.61 0.01 0.62 1,083 1,766 — 2.36 (131) Brazil (non-urban) 2018 6,208 — — 21,739 27,947 — 3,630 0 95 113,394 240,571 153,791 1,405 494 2.33 3.6 3.4 14.58 0.66 15.24 22,124 6,974 2.02 (88) 2.99 (56) Brazil (suburban) 2018 698 — — 170 868 654 45 2,492 43 — 329,678 253,709 901,662 18,033 1.64 2.5 — — — — 12,355 1,460 — — Chile 2018 2,200 — 40 940 3,180 1,693 81 59 — 2,387 10,600 1,558 47,635 1,006 6.93 9.1 8.0 0.49 0.32 0.81 2,018 1,270 2.47 (74) 3.32 (34) Colombia 2018 — 246 — — 246 0 107 — — 4,212 47,556 12,792 658 33 — — — 52.00 0.13 52.13 — — 1.53 (96) 2.94 (58) Costa Rica 2018 — — 120 — 120 0 — — — — 190 15 3,187 48 1.94 3.0 — 0.13 0.40 0.53 53 1,189 — — Mexico 2018 — 17,360 — — 17,360 — 1,274 60 38 32,286 128,043 87,959 57,756 1,600 5.20 9.7 3.6 5.07 0.09 5.16 15,650 5,723 2.84 (65) 3.05 (51) Panama 2018 — 76 — — 76 0 — 0 — — 7,000 534 65 5 30.00 60.0 — 7.03 0.07 7.09 200 2,695 4.46 (24) — Peru 2018 — 1,907 — — 1,907 0 111 38 138 2,242 5,748 1,160 2,992 150 9.74 17.1 — 0.61 0.08 0.69 — — 2.03 (87) 2.69 (83) Uruguay 2018 — 1,903 — — 1,903 0 3 7 6 624 519 79 247 9 5.53 6.5 7.0 0.04 0.005 0.05 568 155 1.25 (100) 2.69 (85) Venezuela 2018 — 41 — — 41 — — — — — — 21 12,000 246 — — — — 6.00 — — — — — Commonwealth of Independent States (CIS) Belarus 2018 5,479 — — — 5,479 1,228 768 288 1,431 44,633 157,164 52,574 79,857 6,215 2.80 9.0 2.6 9.60 1.13 10.73 61,665 953 — 2.57 (103) Kazakhstan 2018 16,061 — — — 16,061 4,238 1,755 70 2,412 132,154 282,941 219,927 22,994 19,110 1.61 4.3 1.1 13.69 1.19 14.88 106,534 2,244 4.14 (32) 2.81 (71) Kyrgyzstan 2018 424 — — — 424 0 26 na 339 1,851 7,256 949 326 35 0.01 1.9 — 2.24 0.08 2.32 4,300 229 2.45 (76) 2.55 (108) Moldova 2018 1,149 — — — 1,149 0 82 — 322 4,975 4,794 970 1,387 77 0.65 1.7 4.7 0.84 0.07 0.91 6,343 165 2.74 (71) 2.46 (116) Mongolia 2018 1,810 — — — 1,810 0 127 — 276 6,585 25,763 15,315 2,572 994 0.63 1.7 1.3 8.46 0.55 9.01 10,808 1,509 2.80 (69) 2.37 (130) Russia 2018 85,626 — — — 85,626 43,851 18,432 4,109 17,898 1,170,409 1,415,344 2,596,880 1,157,213 129,365 3.941 9.8 0.8 30.33 1.51 31.84 554,935 4,913 4.55 (23) 2.76 (75) Tajikistan 2018 620 — — — 620 0 42 — 424 2,165 5,438 224 545 33 — — — 0.36 0.05 0.41 4,533 57 3.74 (41) 2.34 (134) Turkmenistan 2018 3,551 — — — 3,551 0 199 — 425 10,056 23,697 12,630 5,263 2,289 0.26 — 2.2 3.56 0.64 4.20 18,701 798 — 2.41 (126) Ukraine 2018 21,626 — — — 21,626 10,268 3,593 1,335 4,323 201,432 322,342 186,344 151,163 28,615 1.16 4.2 1.3 8.62 1.32 9.94 216,682 992 3.94 (37) 2.83 (66) Uzbekistan 2018 4,718 — — — 4,718 1,774 271 18 780 26,991 94,790 22,942 22,623 4,329 1.03 5.5 2.4 4.86 0.92 5.78 55,102 495 — 2.58 (99) SOUTH ASIA Bangladesh 2018 1,110 — — 1,846 2,956 0 272 0 1,630 5,299 4,550 1,237 90,057 12,994 0.80 2.2 2.8 0.42 4.40 4.81 40,275 353 2.94 (60) 2.58 (100) India 2018 62,891 — — 4,524 67,415 34,319 — — — — 1,221,480 738,523 8,439,000 1,157,174 0.64 2.2 2.4 10.95 17.16 28.12 1,227,000 1,545 4.36 (28) — Pakistan 2018 7,479 — — 312 7,791 0 — — — — — 8,080 55,000 24,904 0.87 3.1 1.9 1.04 3.20 4.23 72,708 454 3.33 (52) — Sri Lanka 2018 1,465 — — — 1,465 0 84 149 825 787 1,840 120 137,520 7,710 0.47 1.4 — 0.08 5.26 5.34 14,885 526 3.2 (55) 2.6 (94) SOUTH EAST ASIA Cambodia — — — 612 612 — — — — — — — — — 2.40 6.5 — — — — — — — — Indonesia 2018 — — 5,042 — 5,042 471 435 966 1,809 6,981 45,236 15,091 423,846 28,180 2.07 5.8 2.9 2.99 5.59 8.58 28,922 1,496 4.23 (30) 3.15 (46) Malaysia 2018 — — — 1,677 1,677 615 89 73 160 2,804 9,454 1,635 39,538 2,317 3.67 8.7 1.9 0.97 1.38 2.36 5,700 693 5.02 (14) 3.22 (41) Myanmar 2018 — — — 6,110 6,110 0 307 114 750 3,449 1,624 639 46,000 3,894 1.08 3.8 2.0 0.10 0.64 0.74 20,000 227 1.79 (96)* 2.3 (137) Thailand 2019 — — — 4,508 4,508 0 220 226 1,298 4,617 10,590 2,716 36,582 5,980 2.29 5.6 — 0.60 1.33 1.93 26,000 334 2.64 (72)* — Vietnam 2018 — — — 2,347 2,347 0 267 0 1,008 4,370 5,664 3,990 8,687 3,542 3.14 9.0 1.3 1.70 1.51 3.21 24,459 308 2.96 (59) 3.27 (39) MIDDLE EAST AND CAUCASUS Armenia 2018 694 — — — 694 127 — 40 1,398 — 2,880 732 400 60 3.10 8.9 4.4 1.05 0.09 1.14 3,000 264 2.85 (64) 2.61 (92) Azerbaijan 2018 2,133 — — — 2,133 1,169 137 18 211 13,590 13,954 4,492 2,833 468 0.59 2.1 2.1 2.11 0.22 2.33 19,760 251 4.69 (20) na Georgia 2018 1,443 — — — 1,443 1,443 170 25 40 10,095 10,005 2,571 2,851 634 1.70 4.6 5.6 1.78 0.44 2.22 12,659 253 3.84 (39) 2.44 (119) Iraq 2018 — 2,272 — — 2,272 0 42 56 41 700 425 195 457 164 2.08 4.5 2.2 0.09 0.07 0.16 4,238 85 — — 98 MOBILITY AND TRANSPORT CONNECTIVITY SERIES RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 99 Quality of railroad Length of railway in route-kilometers (operational) Length of Freight Freight traffic Combined infrastructure electrified Number of Number Volume of traffic, Number of Passenger Passenger rail Passenger rail Freight rail density Passenger density Traffic (1=worst, 7=best) LPI rating 1676 1435 1067 1000/760 Total railway Number of Number of passenger of freight freight, in tons in ntkm passengers traffic, in pkm fare, in US¢/ fare, in US¢/ rate, in US¢/ (million density (million units/staff Score with ranking Score with Country Data Year (route-km) locomotives multiple units cars wagons (thousands) (millions) (thousands) (millions) pkm pkm (PPP) ntkm tonnes) (millions) traffic units) Staff (thousands) in () ranking in () Iran 2018 — 6,153 — — 6,153 0 928 na 2,093 0 50,321 34,859 28,594 15,239 — — — 5.67 2.48 8.14 25,209 1,987 3.71 (42) 2.85 (64) Israel 2018 — 1,384 — — 1,384 0 213 110 651 869 8,404 1,235 67,696 3,032 8.10 6.9 4.4 0.89 2.19 3.08 3,786 1,127 3.76 (40) 3.31 (37) Saudi Arabia (SAR only) 2018 — 2,939 — — 2,939 10 61 10 62 2,042 — 9,781 300 135 8.30 18.0 1.0 3.33 0.05 3.37 1,600 6,198 — — Turkey 2018 — 12,740 — — 12,740 5,467 552 203 684 15,645 28,734 12,773 100,568 5,560 1.71 4.3 1.6 1.00 0.44 1.44 18,316 1,001 3.03 (57) 3.15 (47) UAE 2019 — 261 — — 261 0 7 0 0 240 6,710 1,488 0 0 — — — 5.70 0.00 5.70 — — — — SUB SAHARAN AFRICA Angola (CFL & CFB only) 2018 — — 2692.5 — 2,693 0 — — — — 159 103 2,557 452 0.967 1.942 4.321 0.04 0.17 0.21 2295 242 — 2.05 (159) Benin 2019 — — — 438 438 0 — — — — 150 66 0 0 — — — 0.15 0.00 0.15 — — 1.43 (99) 2.75 (76) Botswana 2018 — — 886 — 886 0 34 — — 1,164 1,549 578 232 41 3.743 7.563 5.188 0.65 0.05 0.70 650 953 3.28 (54) — Cameroon 2018 — — — 983 983 0 36 0 103 1,012 1,404 785 691 218 2.862 6.802 7.747 0.80 0.22 1.02 1588 631 2.29(78) 2.6 (95) Republic of Congo 2018 — — 795 — 795 0 — — — — — — — — — — — — — — — — — 2.49 (115) Cote d’Ivoire/Burkino Faso (Sitarail) 2018 — — — 1260 1,260 0 — — — — 937 861 123 991 0.585 1.342 7.152 0.68 0.79 1.47 1514 1,223 — 3.08 (50) Dem. Rep. Congo (NCC only) 2017 — — 3641 — 3,641 858 53 0 216 1,122 415 194 — — — — 15.504 0.05 — — 7193 — 1.87 (92) 2.43 (120) Eritrea 2019 — — — 115 115 0 — — — — — — — — — — — — — — — — — 2.09 (155) eSwatini 2018 — — 301 — 301 0 6 — 3 535 7,613 1,751 0 0 — — 1.237 5.82 — — 327 5,354 — — Ethiopia - Djibouti 2018 — 756 — — 756 756 41 0 30 440 886 572 129 98 1.376 3.996 5.253 0.76 0.13 0.89 2703 248 2.92 (61) — Gabon 2019 — 648 — — 648 0 34 0 30 536 7,137 4,050 322 171 9.198 16.408 2.737 6.25 0.26 6.51 1220 3,460 2.8 (64) 2.16 (150) Ghana 2018 — — 66 — 66 0 — — — — 708 45 77 1 4.483 11.155 9.478 0.68 0.01 0.69 1247 36 — — Guinea 2018 — 239 — 144 383 0 5 0 22 0 14,123 — — — — — — — — — — — — 2.2 (145) Kenya 2018 — 472 — 2778 3,250 0 — — — — 1,777 556 1,394 480 6.020 14.332 2.634 0.17 0.15 0.32 2200 471 3.15 (56) 2.81 (68) Liberia 2019 — 241 — — 241 0 — — — — 4,595 — 0 — — — — — — — 37 — 2.76 (65) 2.23 (143) Madagascar 2018 — — — 712.31 712 0 17 0 0 205 92 29 51 4 1.510 4.931 12.434 0.04 0.01 0.05 658 51 1.91 (90) 2.39 (128) Malawi (CEAR only) 2017 — — 733 — 733 0 12 0 0 798 350 72 214 30 3.000 8.275 5.200 0.10 0.04 0.14 341 299 2.07 (85) — Mauritania 2014 — 728 — — 728 0 — — — — 13,000 8,775 — — — — — 12.05 — — — — 2.22 (80) 2.33 (135) Mozambique 2018 — — 2878 — 2,878 0 — — — — 23,712 14,227 6,599 2,631 0.041 0.112 1.143 4.94 0.91 5.86 5192 3,247 2.46 (75) — Namibia 2019 — — 2687 — 2,687 0 — — — — 1,551 664 — it — — 4.904 0.25 — — 1179 — 3.34 (51) — Nigeria 2018 — 227 3505 — 3,732 0 — — — — 329 — 3,020 — — — — — — — — — 1.5 (97) 2.53 (11) Senegal - Mali (Dakar - Bamako) 2017 — — — 1288 1,288 0 9 0 0 386 45 44 1,896 46 — — — 0.03 0.04 0.07 1212 74 2.19 (82) 2.25 (141) Sierra Leone 2019 — — 200 — 200 0 — — — — 57 9 0 0 — — — 0.04 0.00 0.04 — — — 2.08 (156) South Africa 2018 — 80 23139 — 23,219 9864 — — — — 266,310 152,410 271,531 6,788 2.293 4.542 2.078 6.56 0.29 6.86 26312 6,050 3.55 (47) 3.38 (33) Sudan 2019 — — 2500 — 2,500 0 109 4 60 3,414 450 345 — — — — — — — — 6678 — — 2.45 (118) Tanzania (TRC) 2019 — — — 2707 2,707 0 51 0 134 967 154 143 271 204 2.171 6.412 4.114 0.05 0.08 0.13 3000 116 2.81 (68) — TAZARA 2019 — — 1860 — 1,860 0 — 0 144 2,324 176 278 3,046 177 2.240 6.652 4.400 0.15 0.10 0.25 2754 165 2.81 (68) — Togo 2019 — — — 82 82 0 — — — — — — 0 0 — — — — — — — — — — Uganda 2017 — — — 314 314 0 — — — — 197 39 530 5 2.769 8.189 9.129 0.13 0.02 0.14 540 83 1.56 (95) 2.58 (102) Zambia 2018 — — 1248 — 1,248 0 40 0 65 1,811 871 358 282 102 1.485 3.503 6.300 0.29 0.08 0.37 976 471 2.39 (77) 2.53 (111) Zimbabwe 2018 — — 2583 — 2,583 0 158 0 295 7,150 3,433 1,078 459 98 — 2.138 6.071 0.42 0.04 0.46 4781 246 2.05 (86) 2.12 (152) NORTH AFRICA Algeria 2019/ — 3856 — 164 4,020 468 88 268 — 10,213 3,900 908 34,600 1,454 2.14 6.4 2.0 0.23 0.36 0.59 15300 154 3.42 (49) 2.45 (117) 2018 Egypt 2019 — 5,153 — — 5,153 0 528 0 2,541 5,102 5,000 1,200 263,106 38,378 0.39 1.7 1.6 0.23 7.45 7.68 44,777 884 3.34 (50) 2.82 (67) Morocco 2019/ — 2295 — — 2,295 1473 132 0 651 4,600 24,800 3,118 38,300 4,803 3.69 8.1 5.2 1.36 2.09 3.45 7338 1,079 3.90 (38) 2.54 (109) 2018 Tunisia 2018 — 471 — 1306 1,777 90 138 60 115 3,515 3,100 535 40,000 1,109 1.67 5.7 2.2 0.30 0.62 0.93 4600 357 2.83 (67) 2.57 (105) Source: All data collected from various public sources for each country (see appendix B), such as annual railway or regulator reports and/or national statistical a nnuals; most data are for 2018. Note: Figures in blue are World Bank estimates. ntkm = net ton-kilometer; pkm = passenger-km; PPP = purchasing power parity; route-km = route-kilometer; US¢ = US cent (1/100 of US$1); — = data not available. 100 MOBILITY AND TRANSPORT CONNECTIVITY SERIES Appendix B: List of Main Data Sources COUNTRY MAIN DATA SOURCE LATIN AMERICA Argentina Comisión Nacional de Regulación del Transporte and Ministerio de Transporte. 2018. “Informe Estadístico - Año 2018.” Argentina. https://www.argentina.gob.ar/sites/default/files/ cargas_2018_1.pdf. Bolivia INE (El Instituto Nacional de Estadística). 2018. “Anuario Estadístico 2018.” Bolivia. https://www. ine.gob.bo/index.php/publicaciones/anuario-estadistico-2018/. Ferroviaria Oriental. 2018. “Memoria Anual 2018.” Bolivia. https://www.fo.com.bo/ AcercaDeNosotros/Publicaciones/01.%20Memoria%20Anual/Memoria%20-%20FO%202018. pdf. Brazil Revista Ferroviária. 2018. “Anuário RF 2018-2019.” Editora Ferroviária Ltda. Brazil. http://www. revistaferroviaria.com.br/. Chile Grupo EFE. 2018. “Memoria Anual 2018.” Chile. https://www.efe.cl/wp-content/ uploads/2020/02/Memoria-Anual-2018.pdf. Metro Valparaíso. 2019. “XXV 2019 Memoria Anual.” Chile. https://www.efe.cl/wp-content/ uploads/2020/06/Memoria_MV_2019_web_FINAL.pdf. Colombia Ministerio de Transporte. 2018. “Transporte En Cifras - Estadísticas 2018.” Colombia. https:// www.mintransporte.gov.co/documentos/15/estadisticas/. Costa Rica INCOFER (Instituto costarricense de ferrocarriles). 2018. “Incofer Informe de Estadisticas Operativas 2018.” Costa Rica. http://www.incofer.go.cr/estadisticas/index.htm. Mexico Agencia Reguladora del Transporte Ferroviario. 2018. “Anuario Estadístico Ferroviario 2018.” Mexico. https://www.gob.mx/artf/acciones-y-programas/anuario-estadistico-ferroviario-2018. Panama Georgia Tech Panama. 2019. “Georgia Tech Portal de Logistica En Panama.” https://www. infologisticapanama.com/index-1.5.0.html. Peru Ministerio de Transportes y Comunicaciones. n.d. “Anuario Estadístico 2018.” Peru. https:// www.scribd.com/document/458124156/Anuario-Estadistico-2018-Mct. Uruguay AFE (Administracion de Ferrocarriles del Estado). 2015. “Memoria Año 2015.” Uruguay. https:// www.afe.com.uy/wp-content/uploads/MEMORIA-2015.pdf. Association Friends of Latin American Railways. n.d. “News Uruguay.” Accessed November 24, 2021. https://www.ferrolatino.ch/en/news/uruguay. Venezuela IFE (Instituto de Ferrocarriles del Estado). n.d. “Carriles Del Estado.” Accessed November 24, 2021. http://www.ife.gob.ve/Sistema_ferroviario. CIS COUNTRIES Belarus Kazakhstan For all CIS countries data taken from: Kyrgyz Republic OSJD (Organisation for Co-Operation Between Railways). 2018. “OSJD Bulletin of Statistical Data on Railway Transport for 2018.” Warsaw, Poland. https://en.osjd.org/api/media/ Moldova resources/c/68/121/462. Mongolia For Turkmenistan, additional information is taken from: Tajikistan CAREC (Central Asia Regional Economic Cooperation Program). 2021. “Railway Sector Turkmenistan Assessment for Turkmenistan—March 2021.” https://www.carecprogram.org/uploads/CAREC- Ukraine CRA-TKM_8th_WEB.pdf. Uzbekistan RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 101 COUNTRY MAIN DATA SOURCE SOUTH ASIA Bangladesh BBS (Bangladesh Bureau of Statistics). 2019. “Statistical Yearbook Bangladesh 2018- 2019.” Dhaka. http://www.bbs.gov.bd/site/page/29855dc1-f2b4-4dc0-9073-f692361112da/ Statistical-Yearbook. India Indian Railways. 2019. “Indian Railways Year Book 2018-19.” Delhi, India: Government of India, Ministry of Railways. https://indianrailways.gov.in/railwayboard/uploads/directorate/stat_ econ/Year_Book/Year%20Book%202018-19-English.pdf. Pakistan Ministry of Railways. 2019. “Pakistan Railways Yearbook 2017-2018.” Government of Pakistan. https://pakrail.gov.pk/images/yearbook/yearbook2017_18.pdf. Sri Lanka Sri Lanka Railways. n.d. “Performance Report 2018.” Ministry of Transport, Sri Lanka. https:// www.parliament.lk/uploads/documents/paperspresented/performance-report-department-of- srilanka-railway-2018.pdf. SOUTHEAST ASIA Cambodia Royal Railways. n.d. “Royal Railways (Cambodia).” Accessed November 24, 2021. http://royal- railway.com/?page=front&lg=en. Indonesia KAI (PT Kereta Api). 2018. “Laporan Tahunan Annual Report 2018.” Indonesia. https://www.kai. id/static/annual-report/annual_report_2018.pdf. Malaysia Ministry of Transport. 2018. “Malaysian Transport Statistics 2018.” Malaysia. https://www.mot. gov.my/en/Statistik%20Tahunan%20Pengangkutan/Transport%20Statistics%20Malaysia%20 2018.pdf. KTMB (Keretapi Tanah Melayu Berhad). 2018. “Audited Financial Statement 2018.” Malaysia. http://intranet4.ktmb.com.my/ktmb/uploads/files/Finance%20Statement/KTMB_Signed_ AFS_2018.pdf. Myanmar Statistics provided by Myanmar Railways. Thailand State Railway of Thailand. 2019. “Annual Report 2019.” Thailand. https://www.railway.co.th/ RailwayMiddleFile/PlanIMG/117/132263842142801929_SRT_2019.pdf. Vietnam OSJD (Organisation for Co-Operation Between Railways). 2018. “OSJD Bulletin of Statistical Data on Railway Transport for 2018.” Warsaw, Poland. https://en.osjd.org/api/media/ resources/c/68/121/462. MIDDLE EAST AND CAUCASUS Armenia Statistical Committee of the Republic of Armenia. 2019. “Statistical Yearbook of Armenia 2019: Transport and Communication.” Armenia. https://armstat.am/file/doc/99516803.pdf. Azerbaijan OSJD (Organisation for Co-Operation Between Railways). 2018. “OSJD Bulletin of Statistical Data on Railway Transport for 2018.” Warsaw, Poland. https://en.osjd.org/api/media/ resources/c/68/121/462. Georgia Georgian Railway. 2018. “Annual Report 2018.” Georgia. http://cdn2.grmedia.com.ge/app/ uploads/2019/05/annual_2018.pdf. Iran, Islamic Rep. OSJD (Organisation for Co-Operation Between Railways). 2018. “OSJD Bulletin of Statistical Data on Railway Transport for 2018.” Warsaw, Poland. https://en.osjd.org/api/media/ resources/c/68/121/462. Iraq Statistics provided by Iraq Railways. Israel Central Bureau of Statistics. 2019. “Transport Statistics Quarterly - Number 4, 2019.” Israel. https://www.cbs.gov.il/en/publications/pages/2019/transport-statistics-quarterly- number-4,-2019.aspx. 102 MOBILITY AND TRANSPORT CONNECTIVITY SERIES COUNTRY MAIN DATA SOURCE Turkey Turkish State Railways. 2018. “Annual Statistics 2018.” Turkey: Ministry of Transport and Infrastructure. https://www.tcddtasimacilik.gov.tr/uploads/images/Strateji/TCDD-T-2018- istatistik-yilligi.pdf. Saudi Arabia Ministry of Transportation. 2021. “National Transport Logistic Strategy (NTLS) 2030.” Saudi Arabia. United Arab Emirates Etihad Rail. 2019. “Annual Report—2019.” United Arab Emirates. SUB- SAHARAN AFRICA For all data sources for Sub-Saharan Africa countries, refer to: Lawrence, Martha, and Richard Bullock. 2020. “Modern Railway Services in Africa: Building Traffic—Building Value.” World Bank, Washington, DC. https://openknowledge.worldbank.org/handle/10986/34576. NORTH AFRICA Algeria ONS (National Statistics Office). 2017. Statistical Yearbook of Algeria, N° 35. “Chapter XIV: Transport.” Algeria: ONS. https://www.ons.dz/IMG/pdf/transports_2017.pdf. Statistics provided by Société Nationale des Transports Ferroviaires (SNTF). Egypt Statistics provided by Egyptian National Railways (ENR). Morocco ONCF (Office National des Chemins de Fer). 2020. “Rapport Financier 2019.” Morocco: ONCF. https://www.oncf.ma/fr/content/download/59782/1375531/file/ONCF%20Rapport%20 Financier%202019.pdf. Tunisia Statistics provided by Société Nationale des Chemins de Fer Tunisiens (SNCFT). RAILWAYS IN DEVELOPING COUNTRIES: A GLOBAL REVIEW 103 Photo Credits Cover Page: Tanzania – that Mbeya guy (https://commons.wikimedia.org/wiki/File:Train_Tazara-8137.jpg) https:// creativecommons.org/licenses/by-sa/4.0/legalcode Page 3: Egypt – © Arturo Ardila Gomex/World Bank. Further permission required for reuse. Page 13: Mexico – Flickr/ World Bank. Page 25: Uzbekistan - © Mansur Bustoni/World Bank. Further permission required for reuse. Page 37: India - © Helena Goetsch/World Bank. Further permission required for reuse. Page 47: Philippines - Manila LRT – picture by David Stanley (Flickr) – commercial use allowed. Page: 57: Turkey - © Martha Lawrence/World Bank. Further permission required for reuse. Page 69: Egypt - © Arturo Ardila Gomex/World Bank. Further permission required for reuse. Page 79: Ethiopia - © Hatem Chahbani/World Bank. Further permission required for reuse. Page 95: Azerbaijan –Photo by S. Shankar (Flickr) - commercial use allowed.