The note reviews concessioning of rail operations, as a partnership between the State, and a private operator in which, while maintaining ownership of rail infrastructure, the State transfers railway operations to the concessionaire, under agreed conditions. It examines the scope of the concession, the railway activity regulatory framework, and management of railway infrastructure, and of locomotives and rolling stock, in addition to the concessionaire's staff governing legal regulations, fees, and taxation.
The case study of the concessioning of the Ifrikya railway is based in part on several recent actual case studies on railway concessioning in Sub-Saharan Africa. However, several features of the general context and data have been changed for pedagogical purposes. The Republic of Ifrikya should therefore be considered an entirely fictitious country and the description of conditions there should not in any way be construed as mirroring the situation in any country that has recently entered into a railway concessioning arrangement.
Under a concession system the state grants a franchise the right to finance, build, own, operate, and maintain a public infrastructure for a given period, and to charge users for that service. Concessions are normally stand-alone, single-purpose entities that are expected to finance themselves eventually, if not initially, without recourse to their shareholders. They are independent corporate entities run by a dedicated staff that seeks career advancement within the concession company. Invariably, the successful concession has been created because of a compelling economic need.