Mokaila, Molefhi to sign sea route deal
Mbongeni Mguni | Tuesday March 18, 2014 11:33
Yesterday, officials from both ministries said Nonofo Molefhi and Kitso Mokaila were scheduled to leave Gaborone today (Tuesday) to sign the key agreement, which will provide Botswana mineral and commodities’ exporters with a sea route.
While the bilateral agreement was due to be inked last April, Namibian ministers asked for a last minute postponement citing technicalities. Another signing ceremony was also postponed from last month with official reasons unclear from both parties.
Tomorrow’s bilateral agreement will build on the Memorandum of Understanding signed in 2010 and will focus the two countries’ cooperation on the 1,500 kilometre project.
“The ministers will sign on Wednesday morning and return the same day,” a minerals ministry official said without elaborating.
“A press release will soon be issued to that effect.”
It is expected that the bilateral agreement will enable the two governments to appoint transaction advisers for the multi-billion Pula project. The advisers will provide guidance on the private sector’s role and also help in establishing a project office and developing a jointly owned company. However, the transaction advisers’ biggest role will be to guide the selection of a private sector partner to take on the infrastructure development.
While the private sector is expected to lead the project, Botswana and Namibia will facilitate land acquisitions and service issues in addition to providing support infrastructure such as terminals, customs and immigration facilities.
While the idea of a railway spanning the Kalahari dates back to the 19th century, it has received the highest attention in the last decade due to increased demand for coal, congestion along traditional routes and private sector interest in funding such a project.
Since the MoU four years ago, Botswana and Namibia have decided on the railway line’s route, the gauge type of rail to be used, the development of specialised terminal facilities at either end of the TKR and expansion of deep water port facilities in Namibia.
The governments have also agreed on the jointly owned company, which is expected to take the form of a Special Purpose Vehicle grouping the interests of Botswana Railways, TransNamib and Namport.
“This will assure the investors of a one-stop shop and a single regulatory body for this bilateral railway and port infrastructure,” Molefhi told investors at a conference last year.
“We have further agreed that time has come, and as governments we must reduce our discussions into a more formal bilateral agreement for the development of railway line and coal port.
“We believe this will assure the private sector of the seriousness of the two governments to work with you to deliver this project.”
Botswana and Namibia have also principally agreed to consider the selective method of procurement for the project so that interested consortiums may start engaging with governments’ representatives.
Since the MoU, Botswana has also established a coal and rail development unit in the ministry of minerals, energy and water resources to spearhead the country’s interest in the project.
The two countries expect the railway and port to be fully functional by 2019, providing an export sea route to major minerals producers in eastern Botswana.
South African minerals producers are also reportedly keen to extend the line into that country, to ease congestion on existing railways there.