Monrovia — United States Ambassador Michael McCarthy has reiterated that the U.S supports the Government of Liberia's decision to set up a National Railway Authority (NRA) to manage the country's rail network and ensure multiple users of the rail.
The debate over who should own the right to operate the rail running up from the Nimba Mountain in Yekepa down to the Port of Buchanan lingers on even after major parties - Arcelor Mittal and the Government of Liberia have all voiced out their support to a multi-user rail network.
In October last year, President George Weah issued an executive order establishing the NRA which will be responsible to manage the state-owned rail network.
Issuing the decree, President Weah said the government was committed to the development and enhancement of Liberian infrastructure which has been under-utilized in the past, in order to increase exports of minerals and other goods to improve the Liberian economy.
Five months later, the U.S. Embassy issued a statement of support it said was intended to debunk a potentially misleading information purporting to represent the Embassy's position on the rail put forth by those who may favor one company's interests over those of another.
"We issued a statement because we kept hearing from different people and our policy was being misstated. The statement was meant to emphasize the fact that when the president issued his decree in October about establishing the Rail Authority, we believe that opened up a real discussion," Ambassador McCarthy said while speaking about the Embassy's position in this debate during his monthly press roundtable on Tuesday.
"It opened up the whole issue of business in that part of the country. Because the President made the decision, we saw new opportunities for Liberia and new opportunities for American businesses. If we able to get the rail and passenger trains, for instance, that changes the picture. That makes the difference," he added.
The Embassy, in the statement Amb. McCarthy alluded to, pointed out that such a system as outlined in President's Weah's executive order, could lead to significant investments by multiple mining companies in the rail corridor, and to significant economic benefit for the people of Liberia.
The Embassy stated that in response to President Weah's policy decision to open the rail to multiple users, it has been exploring U.S. private and public sector investment options that could directly support the Liberian government's goals of independent, professional rail operatorship as well as broader rail access that could include cargo and passenger service.
"In this new policy environment, any deal that favors one corporate interest at the expense of others is only likely to set back the rail and mining development process rather than move it forward through the parliamentary approval process," the U.S. Embassy said.
Weah's Executive Order- a solution or a problem?
The third party's access to rail and port infrastructures has been one of the sticky issues over the stalled Third Amendment of the Arcelor Mittal Liberia (AML) Mineral Development Agreement (MDA).
While key parties of interest to this deal have voice their support to President Weah's decree, some observers believe that issuing the order without amicably resolving the impasse over the stalled MDA that is still languishing within the corridors of the Capitol Building and the Executive Mansion was not the right thing to do.
It can be recalled that after the House of Representatives initially passed the MDA in March 2022 and forwarded to the Senate for concurrence, the Senate refused to concur and made significant changes to the MDA and called on the House for the setting up of a conference committee to sort out the issues identified by both Houses for final passage.
Some of the Senate's recommendations bordered around disputed area and exploration, rehabilitation of infrastructures, third party's access to rail and port infrastructures, additional revenue consideration and compliance.
Initially the House agreed to work with the Senate, but in an unprecedented move, it held an emergency session on Tuesday, March 29, 2022 and unanimously voted to send the Third MDA back to the Executive for renegotiation.
Some analysts are also questioning why did the President choose to create such important revenue generating agency through an executive order instead of an act of legislature. A lawmaker, citing anonymity said using an executive order to establish such significant agency was premature, adding that it should have been done through a legislation.
"Most of the agencies that were created in the past were done through executive order, something that has been criticized because the decrees were ambiguous. Under Madam Sirleaf [ex-president Ellen Johnson Sirleaf], some of these agencies, along with new ones were established through acts of legislations. We expected President Weah to follow suit, and not revert to the past," the lawmaker said.
The Executive Order
The Executive Order #112 issued Monday, October 17, 2022 established the National Railway Authority (NRA) with responsibility to, amongst other things, manage railway and associated infrastructures owned by the Government of Liberia.
Legislative or not, the Executive Mansion said the President's order came from the backdrop of the fact that the Government of Liberia owns certain key assets of national importance comprising railways and associated infrastructures, such as the Yekepa Railway that runs from the station at Yekepa in Nimba County through parts of Bong County to the terminus and associated port infrastructure at or in the vicinity of the Port of Buchanan in Grand Bassa County or Buchanan Port.
The decree also came after the Government entered into an agreement with the Government of Guinea for the export of certain Guinean products via Liberia that have been identified and approved by the two governments.
The Liberian government has sealed a Framework Agreement with High Power Explorations (HPX) for the usage of the rail to export of iron ore from Guinea through the Port of Buchanan.
The signed amended and restated Framework Agreement with the HPX confirmed the Liberian government's principles for HPX's non-discriminatory access to Liberian rail and port infrastructure and identifying HPX's requirements for the future evacuation of ore from the Guinean Nimba Iron Ore Project.
Issuing the Executive Order, President Weah indicated that the Government is committed to the development and enhancement of the Liberian Infrastructure Assets in the national interest to permit increased use of these strategic assets by producers in Liberia for export of minerals and other goods for the benefit of the people of Liberia and the sustainable development of the Liberian economy, including especially Nimba, Bong, and Grand Bassa Counties.
However, he also indicated in the Order that the Government is committed to the core principles of open, non-discriminatory access on a multi-user basis to the Liberian Infrastructure Assets for ArcelorMittal Liberia, Ivanhoe and SMFG (or their affiliates) together with any other eligible users, including local companies and mining operators approved as such by the Government ("Eligible Users"), and in accordance with best international industry practice and best technical, safety, social and environmental standards ("Core Principles").
According to the Liberian Leader, the Government will honor its obligations under existing agreements including the MDA, the Implementation Agreement and the Framework Agreement with respect to the use of and access to the Liberian Infrastructure Assets while also making their use available to all eligible users in a manner consistent with the Core Principles.
AML Agrees, but with reservations
Meanwhile, AML says it is not against the decision for a multi-user rail system. Responding to a FrontPage Africa's inquiry, AML said the Third Amendment to the ArcelorMittal Liberia Mineral Development Agreement establishes a 'very' comprehensive non-discriminatory multi-user access regime for the rail and port, with the Government of Liberia as the approving authority and no monetary benefit to ArcelorMittal.
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"In short, the Government of Liberia remains the owner and final authority that determines who else can use this infrastructure," the company said in the statement.
The company stated that its third amendment is about adding international best practices to guide others for multiparty use of rail and port infrastructure and the Government will now have the controls, rights, and triggers that allow new users to come on board.
The company added that a 62-page document contained in the Third Amendment clearly identifies the principles for multiple parties to use this rail infrastructure, beginning as early as 2025, adding that "AML's Phase II project was designed to set up a concentrator facility to upgrade the quality and value of the iron ore in Nimba to make it a premium product that is desired by the steel industry."
Further in the statement, the company said it has invested US$500 million into the rehabilitation of the rail and port facilities and plans to be the majority user of this infrastructure; adding it has now agreed to expand railway capacity to 30 mtpa within the next three years and will allow other users to temporarily use the excess capacity as the company ramps up its mining operations from 5 mtpa DSO to 15 mtpa Concentrate and subsequently to 30 mtpa Concentrate.
AML added when this expansion is completed by 2024, it will be mining and exporting Liberian iron ore with an investment of about US US$3.0 billion, which will directly impact the Liberian economy, saying it is Liberians that the project is hiring, along with all the economic spillovers that communities are benefitting from our investment in Liberia.
"As the leading private sector investor in Liberia and a reliable partner in Liberia's post-conflict development, ArcelorMittal Liberia welcomes and encourages a competitive business environment and interposes no objection to efforts that promote and yield positive results to existing and new investments in the country," AML said.
