An ambitious multi-billion dollar railway project is to connect landlocked Botswana and its rich Karoo Basin coal fields, to Walvis Bay on the Namibian coast. The two countries signed in 2015 a Memorandum of Understanding (MoU), which covers aspects of the rail network that will run along the Trans-Kalahari Corridor (TKC). The new Trans-Kalahari Railway gathers momentum as governments in Southern Africa seek to improve regional infrastructure and trade.
After many years of experiencing operating losses, which had led to a decrease in share capital, the Botswana Railways Board approved a holistic, in house drawn, Turnaround Strategy with the goal to transform the organization by refocusing it to improve its performance and profitability through a total re-engineering process. The Turnaround Strategy envisaged an investment spanning over a five year period to fund major renewal and recapitalization programs.
The Turnaround Strategy that was drawn has the primary aims of reorganizing and rearranging Botswana Railways’ structures and internal business processes through seven strategy pillars, among which Internal Business Re-organization, New Business Model, Asset Renewal and Recapitalization allow the organization to focus on its core business of transporting bulk commodities and soliciting shareholder’s assistance on funding for the rehabilitation and renewal of the company’s assets.
The work itself is expected to be conducted by private companies; Robert Kalomo, a central person for the project on the Namibian side, explained that “we have not yet selected the companies that will implement the project”. The cost, originally estimated at USD 15 billion, is also likely to rise, and private investors would have to raise the amount without any government guarantees, Kalomo added. As of yet, no major financial institution has shown interest in the project but the World Bank and the African Development Bank (AfDB) have been identified as possible suitors.
The railway line would follow the TKC past Gobabis through to Omitara where it turns west to Okahandja, and onwards to Walvis Bay. In Botswana, the line shall start at the Mmamabula coal fields connecting to the existing railway to Rasesa where it turns west passing north of Molepolole and east of Letlhakeng, joining the Molepolole-Kang road and through to the Mamuno border post. Alternative routes also exist to South Africa‘s Richards Bay and Mozambique‘s Beira port.
Demand for Botswanan coal, largely from China and India, is hoped to boost and contribute to economic growth in the landlocked nation; once completed it is estimated that 90m tonnes will pass along the railway each year. Demand for coal is expected to peak around 2020 and Botswana is aiming to export 10% of the world’s total coal production, competing against Colombia, Australia, Russia and South Africa.
A second project for coal exports regards the Botswana – South Africa rail link. Transnet Freight Rail (TFR) CEO, Siyabonga Gama, recently announced that a 105 km heavy-haul coal rail link between Botswana and South Africa will commence construction in 2016, since the pre-feasibility study for the link is completed, as part of a R300 billion (USD 19 billion) infrastructure investment programme initiated by TFR.
Transnet Freight Rail has allocated approximately R40 billion (USD 2.5 billion) for the construction of this line, which will link into existing coal heavy-haul railway lines and is aimed at transporting coal from Botswana to South Africa.
by Elena Ilie
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