The fast track to growth

Windhoek ‑ Southern African’s road networks are increasingly becoming congested and thus unable to cope with the rising volumes of cargo being moved across borders.
The state of the road network is such that it might not be able to sufficiently haul increased cargo tonnages as Southern Africa steps up efforts to increase intra-regional trade.
While it is generally cheaper and sometimes faster to haul cargo by road, increased use of road transport ‑ especially for heavy loads ‑ results in costly wear and tear to both infrastructure and vehicles.
To counteract this, trade analysts say Southern Africa should revitalise its rail networks, a mode of transport through which bulk cargo – like minerals, fuel, chemicals, cement, grain and coal among others – can be moved.
A paper prepared by Mark Pearson and Bo Giersing of TradeMark Southern Africa (TMSA) says Southern and East Africa need to bring their rail infrastructure into sustainable operation to boost intra-regional trade.
TMSA is funded by the UK government’s Department for International Development and provides research support to SADC, Comesa and the East African Community.
The three blocs are in the process of establishing a tripartite free trade area (T-FTA).
The TradeMark researchers say East and Southern Africa’s rail network, with the exception of South Africa, is not operating sustainably.
Some of reasons for the collapse of rail systems across Southern Africa are related to poor management and under-investment, though the rise in the importance of road transport also played a role in the lack of attention given to moving people and cargo on tracks.
Technological advances, which now enable trucks to carry heavier loads, have resulted in railways losing business to the roads sector.
But, say the analysts, the roads sector is reaching a stage where it is increasingly difficult to meet the demands of trade.
Pearson and Giersing foresee a future model for seamless cross-border general freight railway operations in the region, which are similar to that for road networks.
For this to happen, however, more investment in infrastructure development is needed.
This will allow for erecting equipment and instituting operations on the basis of track-free access, similar to road tolls.
Rail transport, which is often scheduled, can minimise delays at border posts as goods are cleared at commercial end-stations, the analysts say.
To upgrade a railway line, including new sleepers and rails to a 20-tonne axle load, for example, costs in the region of US$400 000 to US$500 000 per kilometre.
The cost of a new 1 067mm gauge track – along with new formation and structures – is approximately US$1 million to US$1.5m per km, and up to US$2.5m/km for heavy haul high-speed railway lines.
In addition to these substantial costs, railway operators would also need to attract more than twice the amount of cargo they are currently handling if they are to operate viably.
Existing railway systems require minimum freight volumes of around two million tonnes per annum to be financially viable while for new railways, traffic volumes should be around 10 million tonnes and more than 20 million tonnes yearly for high-speed heavy haul lines.
Pearson and Giersing say that virtually all the region’s railway networks are operating well below their original design capacities.
“They are suffering from severe capital constraints due to poor track condition and poor locomotive and wagon availability, with many stabled.
“The railway systems will, therefore, be unable to handle more traffic without substantial investment in the repair and upgrading of track and equipment, as well as the provision of working capital,” Pearson and Giersing said.
In addition to upgrading the existing lines, there are plans for new rail lines, which have been gathering dust for decades.
“Revitalisation of East and Southern Africa railway system is not an option ‑ it is essential if the region is to reach the levels of economic growth needed to trade its way out of poverty and into sustainable growth and income generation.
“It is clear that the volumes of freight that will need to be moved will increase significantly in the short- to medium-term, which will place additional strain on the region’s transport system. No single mode of transport will be able to meet the region’s requirements,” the analysts say.
They also suggest that the region co-operate and operate its rail as a single system “much in the same way that the regional road network operates as single regional network with harmonise axle loads and transit systems”.
“The current practice of having to change locomotives and sometimes wagons at the border should be addressed if the railways are to be able to offer an alternative transport service to road transport,” they contend.
The researchers add that while there are significant challenges to bringing railways to a level at which they are able to provide an efficient, competitive and reliable service, these issues are not insurmountable.
“The railways are currently not viable but they have not deteriorated to such an extent that they cannot be turned into viable sustainable businesses that play a vital role in the economic recovery of the region.”
 

August 2013
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