BergerWorld: 3rd Quarter 2008

In an effort to better serve the country's rapidly growing population, Morocco's National Railways Office (ONCF) recently launched a 25-year master plan for the national rail network and retained Louis Berger SAS, in collaboration with Maroc S.A., to manage the plan's preparation. The overall aim of the plan was to increase the competitiveness of the rail sector and improve the nationwide transportation network. The Team first reviewed existing rail operations, costs, demands and constraints; evaluated existing traffic data; and analyzed competing land transport modes. Berger also built a transport model to forecast railway traffic and demand for the 25-year period. Alternate rail development programs were then evaluated. Based on the Team's traffic forecasts, cost estimates and other supporting studies, recommendations on investment prioritizations were prepared. Following a review of the recommended master plan by a steering committee, the Team developed analytic tools that included linking the transport model with a financial model to evaluate the impact of different investment scenarios. ONCF staff was then trained to operate the models and participate with the Team in addressing the steering committee's initial comments. After incorporating the suggested recommendations from the steering committee, a final version of the master plan was developed, consisting of short-, medium- and long-term measures to improve rail operations. The final master plan is expected to be approved by late 2008.

Opened in 1978, the 670-kilometer Trans-Gabon is the country's only railway. Running from Libreville to Franceville, the railway transports three million tons of freight, principally iron ore, timber and uranium, and nearly 200,000 passengers per year. A concession to operate the railway was signed in 2005, and soon after, the concessionaire, SETRAG, launched an extensive investment and maintenance program to increase capacity and improve the railway's efficiency and reliability. In order to secure a 10-year loan for the improvements rather than the six-year loan normally provided by local Gabon banks, SETRAG approached PROPARCO, a subsidiary of the French Development Agency specializing in private-sector financing, for the loan. Louis Berger SAS was then retained by PROPARCO to undertake a technical review of the railway concession and investment program in order to analyze and evaluate the risks in providing a loan to SETRAG. Berger first evaluated a number of prior studies and demand forecasts SETRAG used to develop its current operations and maintenance procedures. The Team then identified potential risks, including capacity limitations and constraints. Finally, Berger provided recommendations to ensure the railway would be operated efficiently, including halting the use of CC10-type locomotives, whose heavy axle loads contribute to the deterioration of existing infrastructure; accelerating SETRAG's slipper renewal program to replace one-third of the rail's existing 20-year-old slippers; and identifying management and accounting procedures to better evaluate and monitor operational profitability and returns on investments.

With more than 33 million residents and an area spanning 2,381,740 square kilometers, Algeria is the second largest country in Africa and the 11th largest in the world. In recent years, Louis Berger SAS has undertaken a number of assignments to improve Algeria's rapidly growing rail and urban transit networks, including selecting the future operator of the first section of the 8.5-kilometer, 10-station Algiers Subway from the center of Algiers to Hai El Badr and preparing tender documents for the implementation of a 320-kilometer high-speed rail connection between El Khemis and Bordj-Bou-Arreridj.

Currently, Louis Berger SAS is managing the works for the new $293 million Redjem Demouche-Mécheria rail line for the Agence Nationale d'Etudes et de Suivi de la Réalisation des Investissements Ferroviaires (ANESRIF), the agency responsible for the construction of new railroads in Algeria. The new 140-kilometer-long line will utilize 160-kilometer-per-hour trains to connect the southern region of Algeria with an existing rail network in the northern part of the country. The Team's duties include reviewing existing studies and conducting additional studies on costs, demand and potential constraints; supervising the earthworks, structures, hydraulics, tracks, signalization and telecommunications designs; monitoring project schedules and costs; supervising construction; and preparing monthly progress reports for ANESRIF.

The Fabled Horn of Africa includes Djibouti, Ethiopia, Eritrea and Somalia. For a number of years, the Berger Group has upgraded the region’s transport network, including extensive infrastructure improvements in Addis Ababa (population 3,146,999), Ethiopia's capital; rehabilitating and upgrading the Berbera Corridor, linking Ethiophia, Somalia, Djibouti and Kenya; improving the corridor between Addis Ababa and the Red Sea, including the ports of Assab, Massawa and Djibouti; rehabilitating more than 600 kilometers of roads in Ethiopia; and reconstructing the 740-kilometer-long Bosaso-Galkayo road in Somalia. Berger has also carried out several assignments to improve the Djibouti-Ethiopian Railway, including evaluating improvements to the existing railway and/or the construction of a new railway from Assab to Addis Ababa and the reorganization of the railway’s financial and accounting activities.

Currently, three transport links connect Djibouti and Ethiopia: the Djibouti-Dobi-Mille-Addis Ababa roadway, the Djibouti-Dewele-Dire Dawa Awash-Addis Ababa roadway and the Chemin de Fer Djibouto-Ethiopien (CDE) railway. Together, the three links form a significant regional corridor. The 780-kilometer-long CDE passes through a number of industrial centers and carries more than 700,000 passengers and 250,000 tons of freight annually. However, CDE has been in decline for many years due in part to its binational ownership and management structure and lack of funds for marketing, maintenance, rehabilitation and new rolling stock. Detailed studies recommended a long-term private concession as the most appropriate solution to ensure the railway’s commercial viability and competitiveness and restore and develop the railway services to meet medium-to long-term demand. In response, the CDE Board of Directors and the governments of Djibouti and Ethiopia proposed to privatize the railway.

Louis Berber SAS, in association with Hifab International and Swederail, was selected by CDE to assist in the privatization of the railway. The Team first evaluated the existing rail conditions, assets, operations, financial performance and opportunities to enhance the railway’s commercial viability. A number of alternatives were the indentified, including closing the railway, selling it, seeking technical assistance to support existing ownership and management and transferring the operation and management to a private firm while leaving the ownership with the two governments. Following the decision to introduce a private operation and management concession, the Team prepared prequalification and tender documents. During the tendering process, the Team evaluated the tenders and assisted in the concession negotiations. Upon selection of the concessionaire, the Team will monitor the implementation of the concession agreement over a three-year period.