Abstract
Economic regulation is about providing rules and systems for business practices within a market. The railway industries in Africa has evolved from being mere public sector means of transport for promoting trade and economic development, to economic business sectors of multiple players including both public and private sectors offering products and services in a competitive. environment. With the Southern African Development Community (SADC) being recognized as the regional economic community leading in terms the volume of trade compared to Western Africa, whose trade volumes are less than half of that of SADC, a look into the efficacy of regional railway transportation to trade and economic development was necessitated. For the SADC region, the main artery for trade transportation is the North South Corridor and statistics have shown that the corridor mainly uses road transportation for more than 90% of the trade volumes. The state of poor competitiveness of the North South Railway Corridor (NSC) has been attributed to backlog on maintenance over extended periods of time which has caused deterioration of railway track and compromised rolling-stock productivity. Whilst road trucks transport provides efficient and effective corridor service on ever expanding road infrastructure, the railways have lagged behind as they service national and not regional corridor services but operate using bilateral interchange agreements.
The SADC (1996,pg.6) defines a regional transport corridor as a major regional transportation route where a significant fraction of member states and non-member states’ regional and international imports and exports are carried by various transport modes; the progress as a regional priority”. The study thus aimed to develop a regional railway corridor economic regulatory framework that will makes railways competitive and a sustainable contributor to SADC economic development via trade. The study reviewed theories on economic regulation as they apply to economies and business and also undertook literature review on the practice of economic regulation in the railway sector of both the best performing railways in the world and the railways in Africa. This was coupled with an appreciation of the economic pillars used for comparing economic competitiveness economic market and regions with a view of how they relate with the railway industry and regional corridor. Purposely selected stakeholders where sampled and engaged to determine how variables identified from economic regulation theories and the literature reviewed on railway economic regulation may be employed for enhancing reginal railway corridor economic competitiveness. The Study has proposed a regional railway corridor economic regulatory framework that makes railways competitive and a sustainable contributor to SADC economic development via trade. The proposed Framework is constituted of four interdependent regional railway regulation levels: LEVEL 1: Single Rail Corridor Market (Inter-governmental agreement); LEVEL 2: Independent Corridor Economic Regulatory Body (Ensuring mutual & equitable benefits for all corridor stakeholders); LEVEL 3: Specialized Service Support Corridor stakeholders (Individuals, institutions, associations); and LEVEL 4: Direct Railway Corridor Players (Infrastructure managers operators, customers). The proposed Regional Railway Corridor Economic Regulatory Framework recognizes the sovereignty of corridor constituting member states, it appreciates the plausibility of practical differences in conditions of member states political, economic, social, technological, environmental and legal factors which influence national decisions and practice of economic regulation of different sectors. It also appreciates that the sovereign member states railways systems willing to work are part of regional rail corridor networks which serve as business and economic drivers through trade facilitation.