Bots, Nam map way forward in multibillion railway line project

> Mpho Tebele

Gaborone – Despite concerns raised in some quarters questioning the viability of the Trans-Kalahari-Railway (TKR) Project in the face of depressed coal prices globally, the joint partners in the venture, Botswana and Namibia are pushing ahead with the implementation of the project.

Botswana’s Minister of Minerals, Energy and Water Resources, Kitso Mokaila was in Namibia from December 8-10 at the invitation of his Namibian counterpart, Minister of Economic Planning and Director General, Tom Alweendo.

Mokaila told the media that they discussed the Trans-Kalahari-Railway Project’s current status in terms of progress made thus far and agreed on the best way forward to implement the project taking into account low prices of coal, considering that this project is anchored on coal.

The project will link the Namibian coast with Botswana’s coal fields.

The TKR Bilateral Agreement (BA) was signed in March 2014 in Walvis Bay, Namibia and the following have been subsequently undertaken; signing of the Project Management Office Agreement (PMOA), in September 2014.

The ministry stated that the refurbishment and availing of buildings for Project Management Office operation, in March 2015 and the Project Management Office (PMO) made operational in May 2015 and is soon to be commissioned by the Ministers.

During his visit, Mokaila also met with Minister Oberth Kandjoze of Mines and Energy, during which they discussed issues of mutual cooperation in the field of minerals and power supply.

Commenting on the viability of the railway line project, Botswana economist Bogolo Kenewendo was recently quoted saying that “The construction of TKR is increasingly unlikely with current price levels (of coal) prohibitive, narrowing the window of opportunity”.

However Mokaila was optimistic that the construction of the Trans-Kalahari railway will open an alternative trade route for SADC countries and add to the already congested trade points to the international market.

He said coal is one of the cheapest sources of energy and will continue to be of great importance to daily life activities in many years to come

The other concerns raised are that of major buyer markets such as China and India being under pressure from environmental lobbyists to switch to more environmentally friendly alternatives.

Mokaila said that there are possibilities of the railway line being a multi commodity transit option hence the feasibility of coal will not ring the death knell on the whole project.

Although several media reports stated that the Botswana government may have changed its mind about supporting the project, Robert Kalomo, who is part of the project personnel, shot down such allegations saying the project is more beneficial to Botswana’s coal exports through Namibia.

Kalomo told the media that although the cost of the project was estimated        at US$15 billion in the feasibility            study, it is most likely to cost more than that.

When asked if private investors in Namibia and Botswana have means to raise US$15 billion or more, he said any interested investor will have to do it without any government guarantees.

The pre-feasibility study by Aurecon, handed over to the Botswana government in January this year also revealed that the efficiency of the railway line coal supply chain is expected to be maximized by copper resources in North West identified to boost TKR viability, manganese ore resources in southern Botswana identified to add to the viability of the TKR.

Mineral resources along the TKR corridor in Namibia also have the ability to further improve the viability of the railway line.

Aurecon, the Australian project consultant, has given the resultant capital expenditure costs at a total of US$14.2 billion (P140 billion), comprising US$8.6 billion for electrified rail, and US$1.9 billion for above rail, and US$3.6 billion for the port.

The railway line is expected to unlock the monetisation of Botswana’s coal resources, which are seen as a way to augment the depleting diamond resources that have been the mainstay of the country’s economy.

The TKR route will run parallel to the Trans-Kalahari Highway (TKH) which will facilitate faster and more efficient transportation of goods between the two countries.

The TKR and the TKH form part of the Trans-Kalahari Corridor that was opened in 1998 with an initial investment of US$127 million.

The corridor is entirely paved and traverses 1, 900 km from Walvis Bay in Namibia through Botswana into Johannesburg in South Africa.

Destinations along this corridor, including Francistown, Gaborone, Gobabis, and Windhoek, are within a 2-day transit time.

The construction works involve earthworks, drainage, rails, track works, bridges and tunnels. Work is expected to stretch over the 2014-19 period.

December 2015
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