mmegi

Gloomy P3bn railway line deal hangs in the balance

BR train
BR train

The fog of war surrounding the construction of a railway line between Botswana and South Africa is set to get denser with former Transnet official warning that political will to bring the project to life remains lacking from Pretoria.

Transnet, which is a South African parastatal in custody of all the country’s ports, rail and pipelines, has been heralding the dawn of trade interconnectedness between Botswana and South Africa since 2011.

Delayed by bureaucratic bottlenecks, it is only until this year when Botswana Railways and Transnet went to capital markets seeking funding for the finance of a 113Km railway link, stretching from Mmamabula in Botswana to Lephalale in Limpopo, South Africa.

Former Commercial manager at Transnet, Divyesh Kalan recently poured water on the anticipated trade link. He cited that a disarrayed Transnet lacks the capacity in the foreseeable future to keep their end of the bargain. Kalan revealed this at the ended Africa mining summit in Gaborone.

“Transnet is currently in leadership disarrays and I don’t think there is political will to solve this or to push the execution of the railway line from South Africa’s side,” he said. Kalan further revealed that corruption has been rampant at Transnet, a plague that may impose heavy budgetary constraints on the company limiting its ability to muscle the execution of the railway line.

“There is internal turmoil within Transnet, it will be difficult for a disarrayed institution to be able to deliver on such a gigantic project,” he added. The negative comments about the deal can only but send a sneering sting to recent copper and coal miners who have been eying the railway development with hawk interest due to their heavy investments in local mining industry.

The Mmamabula-Lephalale Rail Link project plans to unlock Botswana’s mineral resources by establishing a railway corridor connecting the country’s mines to South Africa’s ports. South African ports have been identified as a crucial exit for Botswana minerals to reach international markets in the European Union who absorb most precious metals from Botswana.

Hinging on the success of the deal are new mine entrants in the local mining space such as Jindal Africa, operators of the Mmamabula Energy Complex. Jindal were last year named the preferred bidder to build a 300-megawatt coal-fired project which has now been doubled to 600MW by the Ministry of Minerals and Energy.

Jindal, which has access to 2.7 billion tonnes of coal in the country, has shown keen interest in South Africa as an end market for the coal they intend to mine. The railway line between South Africa and Botswana was set to be a success key factor in the operations.

Meanwhile, Kalan further said one of the biggest predicators of the success of recently opened Botswana mines is how they manage their logistics, saying that logistics has the ability to harm mine profits and offset developmental plans.

With complications ensuing on the railway line, Kalan said the two governments must consider letting in the private sector in order to help Transnet to be able to meet their side of the deal.

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