The developers of the 1,477-kilometre Trans Kalahari Railway (TKR) are considering transforming the rail line into a multipurpose corridor rather than just a dedicated coal evacuation route.
The low oil prices have dragged down the global commodity industry thus hurting Botswana’s copper and coal industries and resultantly the viability of the $15 billion TKR.
In an interview with BusinessWeek, coordinator of coal development unit, Obakeng Moumakwa affirmed their talks with the Southern African Development Committee (SADC) to transform the railway line.
“Currently, the government has been consulting the SADC infrastructure unit on ways to structure it as a corridor rather than a dedicated line of coal,” said Moumakwa.
He said the changes would provide an opportunity on the railway, as it will broadly cover the freight industry as well as exportation of coal.
“This will mean that there will be more continuous cargo en route to European markets from South Africa, Zambia, DRC, Zimbabwe and Namibia,” he added.
Currently, companies working towards coal mining in Botswana have expressed interest in power generation rather than coal exports due to the lack of a viable evacuation route as well as the depressed international coal prices.
Earlier, economists anticipated that there is a narrow opportunity on the TKR, urging action to be taken urgently before missing out as most economies are moving out of the coal industry, especially China where Botswana intends to export coal to.
Regarding the eastern route, Moumakwa noted that the government is still in talks with Mozambique and Zimbabwe regarding the utlilisation of the route to the Indian Ocean.
“The Memorandum of Understanding (MoU) has been signed, once they agree on the pending issues, the countries will start working on ways to refurbish the old line, which will be an advantage as there will be no massive capital cost outlay,” he said.
The TKR railway line is expected to run from Mmamabula through six coal producing regions in Botswana to Walvis Bay in Namibia. The project which is very large with capital cost in the region of $12 billion to $15 billion, is very marginal in economic and financial terms and it is anticipated to take seven to 10 years to be completed.
Botswana and Namibia signed a MoU on the Trans Kalahari Road in 2010. The following year, a pre-feasibility study for the project was completed and the government decided to proceed with the project. Last year, a bilateral agreement on the project was signed in March.