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Terms of Reference for Chipata/Mchinji Dry and Liquid Port

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Terms of Reference for Chipata/Mchinji Dry and Liquid Port LOT N° 2: REQUEST N° SPECIFIC TERMS OF REFERENCE FEASIBILITY FOR THE DEVELOPMENT OF AN INTERMODAL DRY PORT IN CHIPATA, ZAMBIA 1. BACKGROUND 1.1 Sugar Reform The sugar industry plays a crucial role in the Zambian economy. The industry provides an important source of income ands employment in rural areas, as well as foreign exchange, thanks to the sale of large proportion of the industry's output to export destinations, including the EU. In Zambia, the sugar sector contributes to 3-4% of the GDP and 6% of the National Export Earnings1. As a low cost producer, the sugar industry has the potential to increase its contribution to Zambia's socio- economic development. The 2006 EU sugar sector reform has involved a reduction of EU sugar prices and has required significant adjustment in ACP countries signatories to the Sugar Protocol, which was providing duty free access for sugar, at a guaranteed price. In the light of the reform, Zambia has initiated a reorientation and restructuring of its sugar industry. An adaptation strategy for the Sugar Industry in Zambia has been developed in 2006. It sets out relevant projects that will consolidate and improve the future competitiveness of the Sugar Industry in Zambia. The main areas of intervention include: • The expansion of sugar production through Outgrower Schemes; • A diversification strategy: particularly based on ethanol production for fuel blending and gel fuel, and encouragement of the co-generation of electricity; • The facilitation of improvements to and cost reductions on sugar trade routes; • The development of a sugar trade policy. On this basis, the European Commission has allocated €562,000 to Zambia as "Accompanying measures 2006 for Sugar Protocol Countries". The Government of Zambia wishes to procure the services of a consultancy firm to carry out a feasibility study to determine the viability of establishing a dry port at Chipata to complement the Chipata-Mchinji railway line and strengthen the Nacala Corridor transport route. This study is funded under the Sugar Accompanying Measures and it is intended that the outputs from it will contribute to the facilitation and cost reduction on sugar trade routes as foreseen in the Accompanying Measures especially in the context of the Nacala Corridor. 1 "Action Plan for the Zambian Sugar Industry" LMC International Ltd, March 2006 1 1.2 Transport infrastructures Zambia is landlocked and shares borders with Malawi, Zimbabwe, Tanzania, Mozambique, Botswana, Namibia, Democratic Republic of Congo and Angola. The colonial Government constructed main roads and railways from north to south, passing through neighbouring countries in order to transport copper to the sea ports in South Africa, Angola and Mozambique. Thus, construction of international links was export oriented as opposed to one of creating Zambia as an economic hub in the region. During the post-independence era Zambia continued to use the same network for its imports and exports. The historical pattern of transport development has influenced the development of the current transport system in the country. Zambia continues to use the road and railway network as the main modes of transport for its imports and exports through neighbouring countries to the ports of Dar es Salaam, Durban and to a lesser extent Walvis Bay and others. Given the country's geographical position, the government has realised that its location can serve as a hub of economic development in the region, as most of its neighbours’ transit through it. The Government acknowledged that transportation plays a key role in the development of a modern industrial society, through multi-modal systems operated through various forms of infrastructure including roads, railways, air, inland waterways and pipelines. As a consequence, the Government has taken steps to reform the transport sector and intends to construct railway links with neighbouring countries in order for Zambia to have other alternative routes to the sea ports. The Chipata-Mchinji railway project was conceived in 1982 as a bilateral project between Zambia and Malawi to connect Zambia via Malawi to the Port of Nacala in Mozambique. The Government of Malawi with the assistance of the Canadian Government completed their portion of the railway line in 1984, whilst the Zambian Government could not complete the construction of the line from the time the project started in 1982 due to lack of funds. As part of the Nacala Corridor being developed by Malawi, Mozambique and Zambia, the Government of Zambia appointed Zambia Railways Limited in April 2006 to construct the missing Zambian part in the railway line. The project involves linking Chipata to the Malawian Railway System at Mchinji for onward connection to the Mozambican railway system and to the Port of Nacala. This corridor provides the shortest route for the eastern part of Zambia to the Middle East and the Far East through the deep-water port at Nacala and is being considered as a indicative export route for sugar producers. To date the following studies and works have been completed or are in progress: 9 Pre-feasibility study for the proposed Chipata Dryport 9 the railway formation which was idle for 25 years was overgrown with trees and grass and this has since been cleared and prepared and drainage structures completed; 9 the Chipata railway station building and a siding have been constructed (1982- 1984), but remain to be rehabilitated. 9 mobilisation and movement to site of 80lb (pounds) rails to cover the full length of the track length has been nearly completed; 2 9 earth and drainage works; 9 ballast has been laid with a balance now on order; 9 concrete sleepers have been delivered and a small balance remains (on order); 9 Approximately four kilometres of the track remain to be laid; 9 railway crossing on the Chipata – Mwami road still need to be constructed; 9 laying of the remainder of the track will continue as the remaining ballast, concrete sleepers and track is delivered; and 9 completion of the project set for the end of the third quarter of 2008. Further technical details are in Annex 1 to this Terms of Reference. 2. DESCRIPTION OF THE ASSIGNMENT 2.1 Global Objective The overall objective of this study is to contribute to optimising the flow of goods, to and from Zambia through the Nacala Corridor and thus to contribute to the facilitation and cost reduction on sugar trade routes as foreseen in the Sugar Accompanying Measures. 2.2 Specific Objectives This feasibility study is integrated with studies and works to be carried out on the Great East Road under 9th and 10th EDF infrastructure programmes. The specific objectives of the study are: i) to evaluate the feasibility of constructing a dry port and access road for the Chipata/Mchinji Railway Project which would cater for a variety of cargoes (such as cotton, sugar, tobacco and possibly mining and other products), to be transported through the Nacala Corridor; ii) to verify that the legal, institutional and operational status of the railway and port systems between Chipata and Nacala will permit the free and sustained flow of goods through the system to meet demand; iii) to develop preliminary plans and cost estimates for the dry port and an associated business plan for the entity. 2.3 Expected Services, including suggested methodology The team will work closely with the Ministry of Communications and Transport (MCT) through the Director of Planning and Information. He will provide the Consultants with all information relevant to this study, including previous consultancy studies on the Chipata Dry Port, trade flow information, transport infrastructure information, rail concession system information, cadastral and other survey information and designs for the Chipata-Mchinji railway, Chipata station and the proposed dry port, and so on. The team will specifically: 3 1. anticipate, justify and quantify the types of cargo to be handled by the proposed Chipata Dry Port; a. Road - the recent historical, present and 10-year projected outbound and inbound road cargo volumes passing through Chipata; b. Rail – the historical and present volume of Zambian, Malawian and Mozambique outbound and inbound cargo using the Central and Eastern African Railway (CEAR) system through Malawi and Mozambique, by type; c. Cargo - projected daily tonnage of cargo likely to use the Chipata Dry Port, by type of cargo and modal source (outbound d from road, to road and rail; inbound from road and rail to road), giving specific assumptions made; 2. determine the space requirements at Chipata Dry Port site necessary to handle the peak daily cargo storage needs of different categories of cargo (containers, covered storage, fuel tanks, etc); 3. determine the rail, road and other infrastructural and space linkages between the Dry Port and the Chipata Station, indicating whether these are being, or are anticipated to be, funded by Government or others; 4. determine the equipment needed immediately to handle cargo movements through Chipata Dry Port; 5. identify and specify the expected additional equipment needed for the dry port, and the timing of such needs, to meet projected growth over the next 10 years; 6. prepare an outline layout design for the Chipata Dry Port indicating storage, parking, logistical and queuing options; 7. determine the operating cost for the Dry Port; 8. prepare a cost, construction time estimate and financing programme for delivery of a functioning Dry Port, broken down by implementing party; 9. state the lead times necessary to meet the infrastructural and other elements of the dry port establishment (date of arrival of the railway from Mchinji, construction times for access roads, power etc); 10. determine the routing and financial opportunity cost factors for Zambian cargo routing through Chipata to/from Nacala Port over Beira and Durban; 11. determine the tonne/km price differential for the road and rail transport systems to/from Nacala and what impact may this have on the modal split of cargo transport; 12.
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