The Chief Executive Officer of the Ghana Railway Development Authority (GRDA), Dr. Frederick Appoh, has said passenger rail services alone cannot generate enough revenue to sustain railway operations, stressing that cargo and freight transportation are essential to the long-term sustainability of the sector.
According to him, while passenger services provide significant social and economic benefits, including easing road congestion and improving workforce productivity, they are generally not profitable.
Speaking on TV3’s Hot Issues, Sunday, July 12, he noted that revenue generated from freight operations is key to sustain the sector.
“Passenger service anywhere doesn’t pay. I want to make it clear,” Dr. Appoh stated, explaining that rail transport for commuters should be viewed primarily as a public service rather than a commercial venture.
He noted that passenger rail systems help reduce traffic congestion and enhance mobility, but the low fares charged to commuters are insufficient to cover operational and maintenance costs.
“I am not saying passenger service is not good; it is. It provides a social value and decongestion of our roads and, of course, improves the productivity of our workforce,” he said.
Dr. Appoh argued that Ghana, as a developing country with competing development priorities, must adopt innovative strategies to ensure the sustainability of railway services.
He identified cargo and container transportation as the key revenue streams that can support investments in railway infrastructure and help subsidise passenger operations.
“Cargo or container service, or guaranteed freight volumes, is what pays for the infrastructure. It is what pays for the investment and it is what we can use as an Authority to cross-subsidise the passenger service, which is more about providing convenience than necessarily making profit,” he explained.
The GRDA CEO further pointed out that current passenger fares are too low to meet operational expenses.
“Passengers pay 15 cedis. That will not even pay for fuel, let alone overheads. You have to look at innovative ways to do that,” he added.
Dr. Appoh maintained that integrating strong cargo operations with passenger services will be critical to ensuring the financial sustainability of the country’s railway sector.
