Henry Posner's remarks at TransAfrica21, London, 2003 (cont.)

A PARADOX OF FINANCING: Privatization of Parastatals by Parastatals


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SPEECH DIRECTORY: Background on RDC USA Argentina Guatemala Peru Estonia Malawi / Mozambique Investment Parameters The Case for Privatization in Africa Case Study: Financing the Nacala Corridor Structural Trends in African Privatizations Conclusions Q & A Session	Conclusions As I have said before, I believe that aid programs actually competed with the private sector because they had the effect of freezing out or delaying the underlying economics that ultimately have driven Africa to the point where privatization is taking on momentum. As long as there was aid money, you didn’t have to worry about restructuring because you could always ask the donors for new locomotives. Today privatization or concessioning has become accepted on the continent. The interesting thing about this is that the competition is now between private sector investors, like ourselves, and public sector investors. Now let’s talk about risk; we have heard a lot about risk in this conference. Let’s use an example of risk as relating to how deals get financed.
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		As far as RDC is concerned, “This Is Not Scary.” Pictured is a huayco in Peru. In the Andes there are different names for landslides just like in Alaska there are different names for snow. A huayco is a landslide in which the rocks are bigger than an automobile. This does not scare us.
		We are also not scared by Mother Nature. In Guatemala there is a constant problem with washouts because our railway parallels the Motagua River. You can solve this with engineering and manual labor.
		We are not afraid of hurricanes. You can always take bridges and drag them with a bulldozer half a mile and put them back into position.	Top
		We are not afraid of urban problems. This is our main line going through Guatemala City.
		Although this sometimes scares people who finance railways, we are not afraid of squatters because the trains are bigger than the people.
		I’m afraid of heights but not of insects. These are giant spiders in Malawi.

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