Zambia lures locals into mining sector

 

Windhoek – Botswana and Namibia will invite bids for construction of a 1 500km rail line linking coal fields in eastern Botswana to Walvis Bay Port. It will be called the Trans-Kalahari Rail Line and the call for bids is expected to be made before the end of this year.

A bilateral agreement on the Trans-Kalahari Rail project between Botswana and Namibia “will be signed soon” and expressions of interests inviting private investors to bid for the construction of the rail line would thereafter be issued.

Gaborone and Windhoek want work on the rail line to start in 2014, said Andries Hungamo, the Permanent Secretary at Namibia’s National Planning Commission (NPC) told The Southern Times this past week. The rail line, which has been on the drawing board for decades, is key to unlocking Botswana’s coal potential. It is also vital to linking not only landlocked Botswana to Namibia’s deep water port at Walvis Bay, but Zimbabwe as well.

The project was initially thought to cost around US$11 billion but Hungamo said that there has not been any study conducted to determine actual costing. “There was no figure before and there is no figure now,” Hungamo said. “But this is a big project and it will definitely take some time. The magnitude of this project is such that you don’t expect it to run like a bullet. “As the two parties involved, we are doing the best we can to ensure that this initiative comes to fruition.”

Botswana and Namibia have agreed in principle that the rail line will be constructed on a design-build-own-operate-transfer (DBOOT) basis. This means whoever wins the construction tender will finance the entire project and the two governments will repay this investment over an agreed period. Hungamo said that the NPC hopes that the selection of bidders is conducted this year and construction starts in 2014.

“We are optimistic that the selection of bidders is completed before the end of the year and construction commences next year,” Hungamo said. Plans for the Trans-Kalahari Rail Line dovetail with Namibia Ports Authority’s planned expansion of its existing harbour at Walvis Bay and another R30 billion port project, known as North Port, which is targeted at servicing landlocked SADC  countries.

Hungamo said the NPC expects Botswana and Namibia to sign a bilateral agreement on the Trans-Kalahari Rail project in the coming months. “The bilateral agreement will set out obligations on the two parties and once it has been signed, a fresh expression of interest inviting the private sector to bid to do the development of the rail line would be issued,” Hungamo said.

The bilateral between Botswana and Namibia was initially planned to be signed in April this year but that fell away. Hungamo said that the two countries “are still committed to the project” adding that delays to the Trans-Kalahari Rail line are due to changes which have been made on the scoping study.

“We have had to incorporate construction of an inland bulk terminal storage for coal from Botswana in an area earmarked for heavy industry behind Dune 7.  The coal has to be stored there before it is conveyed to the port for shipment,” Hungamo explained.

The rail line is expected to open up the Trans-Kalahari as a viable trading corridor while offering an alternative to road as a transportation route.

As volumes of cargo rise, there have been concerns that the roads – which were not originally designed for loads – would deteriorate rapidly. The costs of repairing and maintaining roads add fiscal pressure to both Namibia and Botswana. More importantly, the Trans-Kalahari Rail Line will be important to the SADC region’s economic integration agenda.

September 2013
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