Faithin Omaha eBook Collection

Download or read book Implementation Completion Report (CPL-40460; SCL-4046A) on a Loan in the Amount of US$350 Million to the Federative Republic of Brazil for a Federal Railways Restructuring and Privatization Project written by Jacques Cellier and published by . This book was released on 2003 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: The assessment of outcome is satisfactory, sustainability likely, and institutional development impacts are high. An important lesson is that addressing the redundancy issue upfront, and initiating a well-designed staff retrenchment program, with adequate social safeguards, negotiated with labor unions prior to privatization, can be an effective instrument to minimize the impacts of restructuring, and to reduce opposition to such project. The process of privatization of Brazil's railways could very well have derailed, and many employees could have been brought into poverty without the attention given to the issue by RFFSA management. Moreover, support for a well-designed staff retrenchment program, equitable severance payments, and retraining and outplacement efforts, can substantially increase the credibility of such program, greatly improving the feasibility of the entire privatization project. This was the first Bank investment project which directly helped finance severance payments, where the risks identified at the time of project preparation, did not actually materialize. Other lessons convey the need for an established regulatory framework prior to initiating a privatization program, as in this case, a broader (geographical) restructuring of the public railways would have been needed to allow for more efficient private operations. Regrettably, the Government's decision to proceed with privatization anyway, had mixed results, for the privatization process was completed,