SA escalates regional rail wars

TSHIRELETSO MOTLOGELWA
Staff Writer | Friday January 27, 2012 00:00

 

In a media statement to mark the groundbreaking ceremony of the $2 billion project a week ago, South African logistics parastatal, Transnet, revealed advanced plans to build a line from Lothair in Mpumalanga inside the country and Sidvokodvo Junction in Swaziland, stretching outwards to the coast to Richard's Bay inside South Africa.

The 146km project is viewed by industry observers as SA's reaction to a threat by regional countries' initiatives to circumvent SA's overloaded railway infrastructure.

The project is expected to bring an extra 15 million tonnes of capacity and provide logistical infrastructure for the coal industry. 'This new line will create additional capacity of 15 million tonnes, which will predominantly be general freight volumes from the existing coal export line,' Transnet said.

This project is seen as an unfriendly response to specific projects some countries in the region are planning to undertake to open more links around the regional economic power.

Late last year, media reports indicated that South Africa had moved to put pressure on Mozambique to block the Ponta Techobanine Inter-Regional Heavy Haul Railway, a major project that would link Botswana's coal fields and Zimbabwe to the Mozambican coast and lucrative markets in China and India.

The project is estimated to take 10 years to construct and involves a 1,100km rail link from the eastern part of Botswana through Zimbabwe, reaching and including a proposed deep seaport at Techobanine in Mozambique.

The South African government and their local counterparts denied the allegations at the time.

However, in this edition, Professor Roman Grynberg of BIDPA argues that the South African project can be seen within the context of regional competition for the logistics business.

'Dominating the rail links in southern African has been one of the pillars of South Africa's relative economic power,' Grynberg says. 'Until just a decade ago, almost everything coming into Africa south of the Congo River came in through Durban or Cape Town.

'Botswana's dependence on SA rail networks has endured for over a century, but the narrow Cape gauge railroad built by Cecil Rhodes in 1897 from Mafeking to Bulawayo that transits through Botswana is no longer fit for the purpose.

'To many in Botswana, this looks like a power play to undercut rail initiatives being developed to build railway networks to either Namibia or Mozambique. However, unless the Richards Bay Coal Terminal is also expanded beyond its current 91 million tonne capacity, it could not alone accommodate Botswana's planned coal exports of 70-90 million tones.'

Looking to unlock the value in its 212 billion tons of coal reserves, Botswana has in recent years signed transport infrastructure agreements to link its coal reserves to the Namibian coast in the west and Mozambique in the east.

The landlocked country seeks to reduce its dependence on the diamond industry as its major diamond mines approach the end of their life-of-mine in the coming few decades.

The rapidly developing Asian economies of India and China provide a lucrative market for Botswana's coal reserves as their energy needs expand. Experts say in its current state, the South African transport and logistics industry, including ports, is inadequate to provide the needed capacity for the SADC region.

In their 2010 market analysis titled Market Analysis - The South African Transport and Logistics Industry, Shaun Scott and Henry Carelse, directors of Worldwide Integrated Logistics, stated that South Africa's freight and logistics network remained a weak link in the regional system.

'Whether the cause be regulatory, as in the case of high axel load limits, or through poor management, the result is that Transnet, and particularly Spoornet is a weak link in the overall delivery of transport and logistics services in southern Africa,' the pointed out.

'The Road vs Rail debate has raged since the early 90s. Spoornet's infrastructure investment shortfalls have also been well documented recently'

In a move seen as expressing their frustrations with this state of affairs, regional countries seem to be moving towards developing their independence from the SA network.

On the other hand, South Africa seems intent on offering competition any such efforts with its advanced plans to improve its system and maintain its dominant position.