CHAPTER 7 AFRICA TRANSPORT INFRASTRUCTURE PLANNING

AFRICA TABLE OF TRANSPORT CONTENTS INFRASTRUCTURE PLANNING AFRICA TRANSPORT INFRASTRUCTURE PLANNING

1. INTRODUCTION 419 2. OVERVIEW OF DEMAND 419

2.1 TOTAL FREIGHT SURFACE FLOWS (SADC COUNTRIES) 419

2.1.1 SOUTH AFRICA CROSS BORDER TRAFFIC (TRANSNET TRANSPORTATION MODEL) 419 2.1.2 SUB-SAHARAN AFRICA TOTAL ROAD AND RAIL FLOWS 421 2.1.3 CRUDE OIL PIPELINE FLOWS 429

2.2 PORTS (ALL MAJOR AFRICAN PORTS) 432

2. OVERVIEW OF CONDITION AND CAPACITY STATUS QUO 434

2.1 RAIL 434 2.2 PORTS 439 2.3 PIPELINES 442

3. OVERVIEW OF REGIONAL CORRIDOR DEVELOPMENT STRATEGIES 444

3.1 KEY ISSUES AND TRENDS HAMPERING DEVELOPMENT 444 3.2 LESSONS LEARNED 445 3.3 OVERVIEW OF SADC CORRIDORS 446 3.3.1 SALIENT ISSUES NEGATIVELY IMPACTING ON CORRIDOR OPERATIONS 454 3.4 CORRIDOR DEVELOPMENTS AND PLANS 455 3.4 FORECASTED REGIONAL DEMAND 457 3.6 STRATEGIC RAIL PROJECTS 458 3.7 FOCUS AREAS 459 3.8 STRATEGIC PORT PROJECTS 470 3.9 MAJOR PORT PROJECTS 471 3.10 STRATEGIC PIPELINE PROJECTS 475 3.11 MAJOR PIPELINE PROJECTS 476

4. TRANSNET STRATEGIES AND DEVELOPMENT PLANS 477

4.1 STRATEGY 477

Please note this Long-Term Framework Plan is not a business or operational plan, and is unconstrained to capital planning and independent to other more detailed Transnet business and operating division (OD) plans. The LTPF is only a planning tool, to guide Transnet and all external and public stakeholders. The LTPF is published annually at www.transnet.net.

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AfDB African Development Bank AICD Africa Infrastructure Country Diagnostic ARTIN African Regional Transport Infrastructure Network AUC African Union Commission bbl/d Billion barrels per day (oil) BBR Beitbridge Bulawayo Railways BR Botswana Railways bcm Billion cubic metres per year CCFB Companhia Dos Caminhos De Ferro Da Beira CDN Railway Systems of Northern Mozambique (Corredor de Desenvolvimento do Norte) Also see CFM-North CEAR Central East African Railways CFB Lobito - Benguela Railways (Caminhos de Ferro de Benguela) CFL Luanda Railways (Caminhos de Ferror de Luanda) CFMa Namibe Railways (Caminhos de Ferror de Namibe) CFM Railways and Ports of Mozambique (Portos e Caminhos de Ferro de Mozambique) CFM-CENTRAL The Beira Railroad CFMK Chemin de Fer Matadi-Kinshasa CFM-NORTH The Nacala Corridor (Also see CDN) CFM-SOUTH The Maputo Railroad CFN Moçãmedes Railways (Caminhos de Ferro Namibe) CPCS CPCS Transcom International Limited CPMZ Companhia Pipeline Moçambique - Zimbabwe DRC The Democratic Republic of the Congo GDP Growth Domestic Product LCA Logistics Capacity Assessment Mscfd Million standard cubic foot per day (measure of gas flow) mtpa Million ton per annum NOCZIM National Oil Company of Zimbabwe NPCA NEPAD Planning and Coordinating Agency NRZ National Railways of Zimbabwe PAP Planned action plan PIDA Programme for Infrastructure Development in Africa RSZ Railway Systems of Zambia SADC Southern African Development Community scf Standard cubic foot (a measure of quantity of gas) SETRAG Societe d’Exploitation du Transgabonais SNCC Societe Nationale des Chemins de Fer du Congo SR Swaziland Railways TAZAMA Tanzania Zambia Mafuta Pipeline TAZARA Tanzania and Zambia Railway Authority Tcf Trillion cubic feet TFR Transnet Freight Rail TMSA Trademark SA UNCTAD United Nations conference on trade and development ZR Zambian Railways

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1. INTRODUCTION

One of the overarching objectives for Transnet as contained in the Shareholder compact is to “Integrate South Africa with the region and the rest of the continent”. In addition economic developments in the Southern African region present enormous opportunities for Transnet, as one of the major players in the national freight system, in the medium- to longer-term. The World Bank’s Africa Pulse report of October 2013 reports that economic activity remains strong in much of sub-Saharan Africa, underpinned by robust domestic demand. The economic outlook for the region seems to be very positive by all accounts. More than a decade of growth has helped to lower poverty, but the twin goals of ending extreme poverty and boosting shared prosperity call for a sharp ramping up of effort. The World Bank projects GDP growth in sub-Saharan Africa reflected to be 4,9 percent in 2013, rising to 5,3 percent in 2014 and 5,5 percent in 2015. In addition countries in SADC such as Mozambique, Zambia, Angola and Tanzania are amongst the fastest growing in the world even though it is from a low base.

Transnet has therefore embarked on a much more focused African strategy. This chapter provides a view on the current infrastructure within the region as well as an overview on freight demand and regional corridor development strategies and plans. Major developments and opportunities concerning rail, port and pipeline infrastructure are highlighted. A very brief view is presented of the Transnet strategies and development plans for Africa.

2. OVERVIEW OF DEMAND

The Regional Freight Demand Model (RFDM) 2015 investigates the economies of 17 countries in sub-Saharan Africa. These countries are namely: Angola, Botswana, Burundi, Congo, Democratic Republic of the Congo (DRC), Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. The objective is to forecast the demand for the aforementioned countries over a 31- year forecast period to support the development of transport infrastructure projects with a good information system. The RFDM methodology can be divided into three components, namely the compilation of a Social Accounting Matrix (SAM) for each of the countries. Secondly, the calculation of the volumes per commodity for the base year takes place, and thirdly the forecasting thereof.

2.1 TOTAL FREIGHT SURFACE FLOWS (SADC COUNTRIES)

2.1.1 SOUTH AFRICA CROSS BORDER TRAFFIC (TRANSNET TRANSPORTATION MODEL)

The TTM (Transnet Transportation Model) is a gravity flow model that produces flows of freight on the rail network, cross-border and through the port system. Inputs to the model are the RFDM (Freight Demand Model) origin- destination pairs, independent views on strategic commodities and network data.

The cross border traffic under review here are total surface flows, irrespective of mode, (road, rail, pipelines and air). Only countries which border South Africa are under consideration.

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2013 - 2044 SA cross border traffic (mtpa)

Country Border Post 2013 EX to 2044 EX to 2013 IM from 2044 IM from Botswana Ramatlhabama 2.61 5.44 0.95 5.55 Lesotho Maseru 3.03 6.82 0.38 0.90 Mozambique Komatipoort 8.63 27.91 0.18 0.73 Namibia Nakop 0.46 0.85 0.46 0.85 Swaziland Mananga 8.44 29.79 8.51 29.84 Zimbabwe Beitbridge 3.25 7.90 2.29 4.53

2013 – 2044 SA cross border traffic (mtpa)

2013 – 2044 SA cross border traffic (mtpa)

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2.1.2 SUB-SAHARAN AFRICA TOTAL ROAD AND RAIL FLOWS

The demand data reflected here refers to total road, rail and pipeline freight surface flows, and no attempt has been made at this stage to establish what market share could be targeted by rail. The data is categorised into three sectors, agriculture, manufacturing and mining, and the entire raw data file can be provided on request.

DOMESTIC FREIGHT TRAFFIC

In 2013 the biggest domestic sector traffic was made up by mining at 357mtpa, with most of the volumes emanating from South Africa. This is expected to grow to 1 127mtpa by 2044. Agricultural domestic traffic was at 327mtpa in 2013 and is projected to grow to 1 100mtpa in 2044. The biggest growth prospects are in manufactured goods, forecasted to grow from 284mtpa in 2013 to 1 110mtpa by 2044. Most of the growth in manufactured goods volumes is seen in South Africa, Angola, DRC, Tanzania, Uganda and Mozambique.

Agriculture Manufacturing Mining

Country 2013 2019 2044 2013 2019 2044 2013 2019 2044 Angola 18 713 276 24 835 964 87 161 273 24 053 687 32 584 586 140 301 524 5 768 111 7 658 607 18 959 538 Botswana 405 391 413 694 1 003 351 6 850 537 7 928 349 18 246 113 9 040 078 9 543 249 28 271 916 Burundi 5 471 270 6 391 000 13 698 039 2 063 999 2 435 678 5 680 745 724 958 814 558 2 332 736 Congo 2 761 734 3 106 446 5 414 262 5 103 367 5 927 462 14 665 868 4 794 012 6 608 048 14 630 860 DRC 28 800 105 44 087 587 143 634 354 13 656 086 22 835 204 112 124 678 4 024 163 5 479 846 31 343 315 Kenya 34 263 426 39 150 089 81 782 057 21 393 295 23 861 766 63 736 112 1 980 513 3 393 678 10 222 463 Lesotho 275 531 367 275 571 498 2 009 867 2 542 066 4 701 993 105 146 126 764 745 933 Malawi 22 372 678 28 227 192 83 792 279 3 670 505 4 686 788 21 202 084 2 925 691 3 343 637 7 647 218 Mozambique 22 308 397 28 624 369 101 318 647 11 225 247 15 451 039 67 902 474 6 138 734 8 552 105 35 824 794 Namibia 713 399 1 070 925 3 317 452 5 200 361 8 421 629 29 388 901 891 881 2 801 699 5 157 479 Rwanda 13 993 872 18 296 699 62 341 684 2 943 072 4 105 361 22 204 082 780 997 1 074 949 3 366 759 South Africa 70 286 989 81 299 181 148 889 095 136 474 163 311 360 483 141 305 565 377 841 895 713 667 820 858 905 235 Swaziland 5 750 037 6 920 092 10 376 100 2 781 967 3 104 278 8 197 063 774 398 845 678 1 683 073 Tanzania 46 759 537 60 669 486 178 197 708 19 989 351 29 819 237 103 200 035 2 398 419 3 295 439 17 706 233 Uganda 33 685 089 53 215 376 102 787 528 11 473 284 23 185 213 59 640 620 1 720 346 3 631 265 12 378 781 Zambia 12 280 558 15 692 691 40 158 248 9 903 976 13 668 333 46 768 293 4 404 048 5 131 368 18 806 419 Zimbabwe 7 977 650 10 795 557 31 809 546 4 913 963 6 931 071 31 755 473 5 230 588 5 943 338 22 667 339 Grand Total 326 818 423 163 1 096 253 283 707 370 799 1 110 199 357 267 446 085 1 127 458 938 623 122 385 918 200 987 464 525

Domestic freight traffic

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Domestic freight traffic per sector: 2013 - 2044

INTRA-REGIONAL IMPORTS AND EXPORTS

INTRA-REGIONAL IMPORTS Manufactured goods imports make up the biggest share of total goods imported. The biggest importer of these goods is South Africa. Total manufactured goods imports are projected to grow from 19mtpa in 2013 to 55mtpa in 2044.

South Africa is the biggest importer of agricultural goods in the region. Intra-regional imports of these goods are projected to steadily grow to 1,2mtpa by 2044. Mining imports are driven by South African and Zambian demand. In 2013 the total intra- regionally traded mining goods were 4,8mtpa and are expected to grow to 11,6mtpa in 2044.

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Agriculture Manufacturing Mining Country 2013 2019 2044 2013 2019 2044 2013 2019 2044 Angola 111 272 126 601 236 183 974 414 1 158 559 2 338 903 31 610 36 568 147 219 Botswana 374 731 397 861 514 274 1 897 076 2 158 163 4 069 254 165 478 189 448 335 032 Burundi 34 573 39 490 69 465 207 142 246 638 560 382 2 864 3 381 8 788 Congo 8 062 9 053 15 078 147 630 178 954 422 305 2 057 2 795 10 136 DRC 74 019 104 127 385 015 1 537 288 1 984 451 6 080 200 71 532 100 660 426 308 Kenya 138 285 169 611 372 575 873 167 1 047 274 2 285 305 100 211 119 670 174 145 Lesotho 218 225 225 119 259 489 756 676 866 278 1 381 988 53 340 62 608 96 378 Malawi 136 079 150 780 511 082 534 900 635 813 1 545 982 44 010 48 421 143 996 Mozambique 155 857 164 220 279 999 1 450 466 1 767 859 4 334 799 45 001 57 092 93 930

Namibia 154 307 168 235 259 848 1 741 235 2 046 810 4 091 118 77 935 93 512 201 911 Rwanda 92 225 116 480 413 232 617 006 805 224 2 890 304 8 455 9 935 31 102 South Africa 597 578 666 692 1 243 477 4 063 062 5 076 680 13 053 954 3 032 266 3 469 246 6 993 792 Swaziland 191 458 197 343 233 751 729 755 830 291 1 498 645 118 077 138 911 199 722 Tanzania 96 616 122 586 392 230 542 176 683 614 1 786 335 11 641 17 661 25 161 Uganda 50 372 62 775 126 330 872 065 839 375 2 081 305 96 358 116 587 226 943 Zambia 41 994 48 377 88 308 1 595 625 1 929 507 4 451 492 909 054 1 212 017 2 066 859 Zimbabwe 439 721 497 742 1 027 544 1 109 944 1 281 775 2 609 726 116 913 151 208 448 499 Grand Total 2 915 372 3 267 089 6 427 879 19 649 628 23 537 267 55 481 997 4 886 804 5 829 719 11 629 922

Intra-regional imports

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Intra regional imports per sector: 2013 - 2044

INTRA-REGIONAL EXPORTS

South Africa is the biggest intra- regional exporter of goods in the region across the agricultural and manufacturing sectors, while Angola dominates the mining sector under the study.

Total manufactured goods are the most traded goods in this regard and are expected to grow from 20mtpa to 55mtpa in 2044. Mining exports from Angola and South Africa drive the growth in this sector. Intra-regional mining exports are forecasted to grow from about 4,9mtpa in 2012 to about 11,6mtpa in 2044.

Agricultural volumes show steady growth, expected to grow from about 3mtpa in 2013 to 6,4mtpa in 2044.

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Agriculture Manufacturing Mining Country 2013 2019 2044 2013 2019 2044 2013 2019 2044 Angola 3 4 12 4 811 5 157 7 045 2 316 043 2 706 798 6 006 861 Botswana 7 591 8 264 16 727 213 770 265 308 476 576 333 944 388 463 787 315 Burundi 862 1 093 3 053 7 524 9 106 36 489 17 23 85 Congo 1 2 3 10 085 13 087 36 205 152 191 496 DRC 926 1 137 3 099 93 109 120 327 359 218 485 745 725 414 934 841 Kenya 57 455 67 288 139 721 1 074 392 1 145 983 3 293 473 60 092 71 810 167 180 Lesotho 1 579 1 669 2 142 84 953 109 416 299 185 24 882 26 556 34 225 Malawi 60 528 72 804 204 912 158 056 203 832 650 973 10 270 15 999 21 582 Mozambique 153 704 170 676 443 441 2 829 790 3 574 306 9 734 419 129 046 140 292 284 053 Namibia 247 889 291 375 601 661 402 847 484 653 1 132 410 379 157 432 330 955 144 Rwanda 35 625 44 372 120 296 130 681 162 050 519 055 1 872 2 361 6 229 South Africa 1 415 485 1 487 626 1 861 175 11 168 158 13 052 611 26 082 338 746 331 882 019 1 461 972 Swaziland 47 446 49 290 57 938 513 894 653 800 1 759 160 45 444 48 341 61 430 Tanzania 110 887 140 781 371 869 669 660 802 067 2 401 907 78 120 99 091 223 959 Uganda 230 582 299 565 977 241 961 905 1 288 485 4 092 881 3 630 4 690 17 492 Zambia 345 765 418 805 1 170 806 840 124 1 046 843 3 092 615 46 100 52 358 115 013 Zimbabwe 199 044 212 339 453 782 485 869 600 235 1 508 048 225 962 232 981 552 044 Grand Total 2 915 372 3 267 089 6 427 879 19 649 628 23 537 267 55 481 997 4 886 804 5 829 719 11 629 922

Intra-regional exports

Intra regional exports per sector: 2013 - 2044

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IMPORTS AND EXPORTS OUTSIDE THE REGION

IMPORTS OUTSIDE THE REGION Manufactured goods make up the biggest percentage of all goods imported into the region. South Africa and Angola import the bulk of these. In total, importing of manufactured goods will grow from 87mtpa in 2013 to 348mtpa in 2044.

South Africa is the main driver of demand for mining imports into the region. Mining imports are projected to grow from about 30mtpa in 2013 to about 90mtpa in 2044, while agricultural imports are expected to grow from about 10mtpa in 2012 to 37mtpa in 2044.

Agriculture Manufacturing Mining Country 2013 2019 2044 2013 2019 2044 2013 2019 2044 Angola 893 108 1 173 919 4 156 235 9 287 700 12 317 042 40 631 391 698 282 859 471 2 824 045 Botswana 186 072 263 655 756 982 2 554 192 3 140 449 7 229 561 124 231 139 858 342 832 Burundi 98 581 111 927 205 076 529 374 595 970 1 200 500 47 722 76 534 175 672 Congo 559 908 638 833 1 258 975 3 239 681 3 943 473 9 979 801 167 028 288 700 791 136 DRC 401 296 563 976 2 258 239 1 435 497 2 291 830 14 820 360 40 866 74 617 421 017 Kenya 1 669 157 2 086 779 4 432 717 9 879 570 11 550 579 29 199 240 1 106 262 1 356 132 4 648 368 Lesotho 150 674 226 333 416 468 746 093 1 073 381 2 995 487 40 599 58 455 383 446 Malawi 325 215 455 665 2 209 783 1 566 379 2 135 007 6 460 853 678 735 777 169 3 039 516 Mozambique 662 908 913 369 4 423 796 5 429 120 7 420 407 40 127 726 81 845 132 611 743 290 Namibia 91 367 190 702 895 744 1 603 869 2 461 867 11 130 921 33 841 47 529 333 160 Rwanda 164 848 213 742 702 251 766 992 1 035 345 4 175 130 113 102 143 574 462 456 South Africa 3 220 894 3 750 034 7 133 494 31 978 597 39 919 801 98 286 955 25 657 336 29 577 820 61 829 738 Swaziland 119 184 143 248 347 741 540 568 643 921 1 814 196 77 224 90 422 252 922 Tanzania 804 744 942 243 3 862 760 7 362 539 11 120 855 36 093 667 431 491 1 042 336 6 728 808 Uganda 301 765 461 500 1 285 862 5 334 520 7 184 832 19 582 270 242 074 416 033 1 339 618 Zambia 62 373 86 498 275 894 2 704 736 3 695 622 13 616 728 948 192 1 330 043 4 515 117 Zimbabwe 408 790 689 458 2 870 702 1 954 993 2 546 470 11 001 375 274 272 416 585 1 368 504 Grand Total 10 120 884 12 911 882 37 492 719 86 914 419 113 076 854 348 346 161 30 763 100 36 827 891 90 199 645

Imports outside the region

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Imports outside the region per country and freight sector: 2013 - 2044

EXPORTS TO OUTSIDE THE REGION Mining, as expected, makes up the biggest portion of the goods exported from the region. In 2013 almost all mining exports emanated from South Africa, but in 2043 the picture changes, even though South Africa will still be dominant, Angola, Botswana and Mozambique are expected to develop to be significant exporters by this time.

Mining exports are expected to grow from 262mtpa in 2013 to 801mtpa in 2044.

Manufacturing and agricultural sector exports are projected to grow from 31mtpa in 2013 to 132mtpa in 2044 and 10mtpa to 38mtpa respectively.

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Agriculture Manufacturing Mining Country 2013 2019 2044 2013 2019 2044 2013 2019 2044 Angola 12 396 14 311 25 666 1 505 822 1 797 155 4 718 027 80 895 382 109 133 724 234 016 867 Botswana 1 917 2 321 6 650 228 201 279 680 546 506 87 927 1 983 118 70 179 882 Burundi 1 441 1 888 5 763 76 809 110 580 492 994 4 075 5 476 18 762 Congo 1 581 2 040 6 887 604 422 821 754 2 980 641 10 200 052 14 107 283 29 295 177 DRC 4 811 7 420 35 395 1 243 657 1 875 975 10 424 112 944 252 1 534 785 14 415 071 Kenya 1 088 183 1 277 683 2 802 420 1 589 651 3 122 242 12 014 642 358 762 433 648 1 209 755 Lesotho 2 114 5 590 27 338 67 874 111 176 730 908 1 047 13 074 197 913 Malawi 433 684 536 439 2 485 553 477 963 660 009 2 745 669 40 127 63 461 242 434 Mozambique 373 853 549 549 4 280 569 1 018 707 2 668 785 17 155 472 4 444 458 7 869 932 78 195 145 Namibia 308 650 538 719 1 470 108 304 909 482 927 2 538 461 710 133 1 145 819 6 005 019 Rwanda 25 493 36 043 149 428 232 259 331 344 1 408 915 2 836 4 553 28 157 South Africa 5 549 811 5 979 550 8 264 943 19 756 820 23 934 722 52 889 403 161 905 822 212 873 568 356 077 262 Swaziland 33 025 57 596 291 974 370 591 572 305 3 048 591 997 176 1 475 310 3 344 529 Tanzania 1 000 215 1 468 937 6 387 950 751 415 1 226 466 5 192 452 215 644 330 470 1 631 145 Uganda 345 780 942 451 9 048 702 930 771 1 994 239 7 495 910 17 647 64 948 626 452 Zambia 569 659 783 455 2 213 341 1 240 791 1 644 909 4 910 578 1 323 221 1 880 242 5 594 591 Zimbabwe 328 475 389 496 1 060 231 408 117 543 521 2 777 730 62 282 69 799 571 937 Grand Total 10 081 086 12 593 488 38 562 917 30 808 778 42 177 787 132 071 013 262 210 844 352 989 210 801 650 100

Exports outside the region

Exports outside the region per country and freight sector: 2013 - 2044

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2.1.3 CRUDE OIL PIPELINE FLOWS

Pipeline transportation is both the route and the vehicle, and it is permanently connected to terminals, which facilitate freight storage. This feature makes it the only mode of transport that does not involve handling costs. Taking cognisance of the fact that pipeline infrastructure is extremely capital intensive and that it has an unprecedented longevity; pipeline transport enjoys the highest level of economies of scale of all modes of transport. Commercial transportation of crude oil and petroleum products by pipeline has been receiving increased attention worldwide and there are a number of planned key developments and projects in Africa as a whole.

DOMESTIC

Congo had the biggest crude domestic movements for 2013 at about 4.2mtpa, followed by Angola at 4,1mtpa. In 2044 Angola volumes are expected to grow to10mtpa. With the recent discoveries of oil reserves within the East Africa region, Kenya and Uganda’s crude domestic movements are expected to grow to about 0.5mtpa and 5mtpa respectively in 2044.

Domestic Crude 2013 - 2044

IMPORTS AND EXPORTS OUTSIDE THE REGION

Regional imports are made up mostly of crude imports with some natural gas. South Africa is the biggest importer of both commodities. Crude imports by SA were about 22mtpa in 2012 and expected to grow to about 64mtpa in 2043. SA is projected to grow the natural gas imports to 1,1mtpa in 2043, from the current 0,35mtpa. Tanzania shows significant growth in crude imports as it is currently not importing any volumes but projected to import 14,5mtpa by 2043.

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Crude imports from outside the region

EXPORTS

The exports of the commodities under study are dominated by crude. The crude exports from the country are expected to grow from about 78mtpa in 2012 to 195mtpa by 2043. Mozambique and Congo show the biggest growth prospects in natural gas, they are expected to grow volumes to 1,3mtpa and 10,2mtpa respectively.

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Crude exports per country from outside the region

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2.2 PORTS (ALL MAJOR AFRICAN PORTS)

The table below provides forecasted growth in TEU numbers and total tonnage volume for selected ports in Africa. It is estimated that the number of TEUs will grow at an average CAGR of 4.2% per annum and the total volumes handled at 5.3% per annum.

African Ports # of TEUs ('000) Total tons ('000) Country Name Port Name 2013 2044 2013 2044 Algeria Algiers 737 1 536 13 616 28 361 Skikda 90 161 25 323 52 743 Bejaia 249 445 20 277 42 234 Angola* Luanda 913 2 105 11 300 32 534 Cabinda 12 35 1 000 2 879 Lobito 42 121 2 368 6 819 Namibe 18 52 961 2 767 Benin Cotonou 348 2 325 6 800 74 486 Cameroon Douala 350 2 007 10 592 96 010 DRC* Matadi 110 878 2 000 27 307 Congo* Pointe-Noire 509 2 543 7 652 58 394 Cote d'Ivoire Abidjan 610 2 466 16 643 137 688 Djibouti Djibouti 795 2 676 7 103 45 879 Egypt Damietta 1 000 2 685 28 900 100 933 Alexandria 1 519 3 618 49 400 172 529 Port Said 3 910 10 788 36 700 128 175 Sokhna 600 1 611 7 400 25 844 Gabon Libreville 162 738 6 500 44 058 Gambia Port of Banjul 13 160 1 755 20 912 Ghana Tema 842 2 591 12 181 46 717 Takoradi 52 127 5 456 16 793 Guinea Conarky 150 374 4 500 55 283 Kenya* Mombasa 894 2 841 22 133 70 333 Liberia Monrovia 86 492 2 271 20 632 Buchanan 0 0 2 662 24 181 Libya Benghazi 156 1 524 2 500 24 390 Morocco Casablanca 825 2 609 22 672 97 361 Jorf-Lasfar 0 0 17 804 76 455 Mohammedia 0 0 11 924 51 206 Tanger-Med 2 600 9 885 30 000 128 831 Mozambique* Maputo 113 917 17 000 100 231 Beira 160 840 1 921 43 689 Nacala 90 471 1 354 30 795 Pemba 8 62 131 1 086 Namibia* Walvis Bay 302 1 436 6 219 46 524 Luderitz 3 14 335 1 594 Nigeria Lagos 1 155 4 695 21 000 85 358 Onne 216 654 27 000 109 746 Senegal Dakar 402 1 653 11 870 71 005 Sierra Leone Freetown 90 631 1 412 16 442 Pepel 0 0 12 100 140 899 Sudan Sudan 447 2 113 10 034 71 381

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Tanzania* Dar es Salaam 553 3 786 12 531 85 777 Tanga 10 48 458 3 132 Mtw ara 15 67 204 1 394 Togo Lome 311 1 872 8 699 83 586 Tunisia Rades 424 1 142 6 296 22 094 Sfax 39 102 5 017 17 605 * countries where crude oil volumes were excluded from bulk figures Africa ports demand: 2013 – 2044

The total demand at the 14 ports that serve the region (excl. South African ports) was estimated at 87 million tons in 2013. This is forecasted to grow to 511 million tons in 2044 at a CAGR of 5.8% per annum. Crude volumes have been excluded from the totals.

In 2013 the distribution of imports and exports at these ports were 74% imports and 26% exports. This is set to change significantly with imports’ share declining to 54% and exports’ rising to 46% in 2044. The table below gives an indication of the import/export ratio per major port in the SADC region, excluding South Africa.

Country Port Import/Export ratio

2013 2044 Cabinda 84/16 89/11 Lobito 90/10 85/15 Angola Luanda 86/14 88/12 Namibe 88/12 87/13 Congo Pointe-Noire 88/12 81/19 DRC Matadi 58/42 61/39 Kenya Mombasa 82/18 67/33 Beira 25/75 11/89 Maputo 64/36 40/60 Mozambique Nacala 72/28 60/40 Pemba 71/29 54/46 Luderitz 56/44 54/46 Namibia W alvis Bay 57/43 31/69 Tanzania Dar es Salaam 75/25 69/31

Import /Export ratio per country

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2. OVERVIEW OF CONDITION AND CAPACITY STATUS QUO

The objective of this portion of the chapter is to provide an overview of the current status and capacity of the railways and pipelines within the SADC region, and most of the major container ports in Africa. Most of the information reflected here was extracted from various source documents and are referenced accordingly.

2.1 RAIL

Seven interconnected national railways form an extensive and well-developed regional rail network in Southern Africa, spanning half a dozen countries and extending from the Democratic Republic of Congo all the way to Durban in Southern Africa as indicated in Figure 1. This represents a far higher level of regional rail interconnection than has been achieved elsewhere in Africa, where a few bi-national railways exist but systems are otherwise disconnected.

African Railway Infrastructure Source: www.skyscrapercity.com

Unlike in other parts of Africa, the rail network in Southern Africa is integrated with the use of a uniform Cape gauge, as seen in the figure below.

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Figure 2: Africa and the Sub-Saharan regional railway network Source: www.skyscrapercity.com

Railway gauges within the Sub-Saharan African region predominantly consist of Cape gauge with three countries in east Africa (i.e. Tanzania, Kenya and Uganda) with metre gauge rail systems and one country (i.e. Gabon) with a standard gauge rail system. North and West African railways are individual systems from the coasts to inland, as this is mainly mining areas.

Key factors for selecting a rail gauge are;

• Network connectivity with neighbouring countries • Network interoperability especially for Transnet/PRASA shared infrastructure and branch line private operators • Stand-alone lines - Select the highest specifications for load or speed1

Of the total 55 000km of track in sub-Saharan Africa, 40% of the operating network and 70% of the traffic are captured by Transnet Freight Rail in South Africa. Railways in Southern Africa carry much more freight than in all the other regions of Africa put together. Overall, Southern Africa handles around 74% of sub-Saharan Africa’s freight traffic (including coal and minerals) and more than 80% of the total net tonne-kilometres. Southern Africa also dominates the passenger business, carrying more than 70% of total passenger kilometres, largely because of its extensive commuter passenger services operated by PRASA.2

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The current regional railway systems within the SADC region are operating well below their original design capacity. Furthermore the railway systems have severe capacity constraints because of poor rail infrastructure and rolling stock availability.

The design capacity and current throughput as per country have been updated subsequent to latest available information and completed studies. Transnet’s perspective on the capacity of each system was determined in the Regional Assessment Services for Rail Networks, Ports and Pipelines study (2014/2015) and is listed in the following table. Various colours used to compare Transnet’s perspective to the Design Capacity on the line are as follows:

• Green – Transnet’s perspective greater than Design Capacity • Orange - Transnet’s perspective within 80-100% of Design Capacity • Red - Transnet’s perspective less than 80% of Design Capacity

Lines (km) Network capacity

Design Current Transnet Country Railways Total Operating capacity throughput Perspective (mtpa) (mtpa) (mtpa)

CFB 1 331 1 331 2.5 0.16 6.5 Angola CFL 479 479 2.5 0.26 11 CFMa 907 512 2.5 0.62 6 Botswana BR 888 888 4 2 7 Congo CFCO 797 797 4 3.5 5.5 SNCC 3 669 3 669 2 0.1 1,2 DRC CFMK 400 - - - - Gabon SETRAG 649 649 15 3.7 4 Kenya KCR 2210 2210 - 4.2 8 Malawi CEAR / CDN 820 820 5 0.5 4 CFM-Central 987 314 7 6.5 5 Mozambique CDN 871 611 7 0.2 2,8 CFM-South 1 129 1 129 15 2 19 Namibia TransNamib 2 559 1 683 2 1.8 3 Swaziland SR 365 365 - - 11 TRC 2 707 2 707 3 0.7 4 Tanzania TAZARA 921 921 5 0.22 3 Uganda UCR 1241 1241 - 4.2 2.7 TAZARA 939 939 5 0.22 2.7 Zambia ZRL 163 - 3 0.5 - ZRL 810 810 10 NRZ 3 077 2 759 18 2.5 5.5 Zimbabwe BBR 150 150 11

SADC Rail network design capacity and current throughput

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Poor maintenance over extended periods of time has caused the deterioration of many sections of the track, as reflected in Figure 3, and resulted in a loss of competitiveness and rolling-stock productivity. While such inefficiencies can be tolerated on low-volume feeder lines, and may be the only way some can be viably operated, they are a major handicap when competing against some of the modern roads being constructed along major corridors.

Henceforth the available capacity on the railway systems cannot be exploited without substantial capital investment in rehabilitation and repairs and the procurement and maintenance of sufficient and reliable rolling stock.

The table below reflects the current condition of the various line sections based on the latest source information and studies concluded by TFR.

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The rail condition is defined as follows:

 Good - Properly maintained and/or recently upgraded and  Fair - Requires upgrading or some maintenance  Bad - Line is in a poor condition and/or damaged

Country Railway Track condition assessment Angola Rehabilitated by China up to Luau. Reopened in 2012/13. Good. Link with Lobito – Benguela railway Dilolo in DRC still need to be constructed Luanda railway Rehabilitated by China and in fair to good condition Namibe railway Rehabilitated by China and in fair to good condition Botswana Botswana Railway Rail network generally in a good condition Congo CFCO Rail network generally in bad condition DRC Rail network generally in bad to fair condition SNCC Track between Kolwezi and Dilolo overgrown and not in use CFMK Rail network generally in bad condition Gabon SETRAG Rail network generally in a fair condition Zimbabwe NRZ / BBR Rail network generally in a fair to good condition Kenya KCR Rail network generally in a fair condition Mozambique Beira to Machipanda section of the Beira corridor in poor condition CFM-Central Sena line from Moatize to Beira in good condition since it is being rehabilitated

Section between Ressano Garcia to Maputo generally in good condition CFM-South Section between Maputo and Chicualacuala generally in good condition Section between Goba and Machava in good condition

Nacala to Cuambo in good condition CFM-North Rest of network in poor condition (CDN) Nacala to Nkaya Junction being upgraded. New line being constructed between Moatize and Nkaya Junction Malawi Generally fair to good CEAR / CDN Section from Dona Ana bridge to Luchenza closed since 1985 CEAR concession responsible to upgrade lines Namibia TransNamib Track generally in good condition Swaziland Swazirail Generally in fair condition Tanzania Tanzania Railway Company Generally fair with northern network from Tanga to Arusha not in use Uganda UCR Rail network generally in a fair condition Zambia ZR Sections of track bad, fair to good condition Zambia/ Track in poor condition Tanzania TAZARA Track in Tanzania upgraded to higher axle load whilst track in Zambia still at a lower axle load

SADC Rail network condition summary Source: TradeMark – Revamping the Regional Railway System in Eastern and Southern Africa Region 2012 and SADC RIDMP 2012

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2.2 PORTS

As expected for such a vast continent the port system is extensive and built to serve the needs of the individual continental countries and their natural hinterlands. The port network can be divided into the following:

• Northern African ports which are more Eurocentric and act as transhipment ports for the Mediterranean markets. • West African ports focused on moving cargoes into West Africa and the Sahel nations as well as exports of primarily agricultural exports. • Southern African ports dominated by South Africa but more focused on a variety of imports and mineral exports. • East African ports which are dominated by three ports and have a number of corridors flowing from them.

The high average growth rate in Africa over the last few years has had a marked effect on the utilisation and efficiency of these ports and many are operating on or around their design capacity. This has created the opportunity for new operations in current ports and even the development of new ports on the African coastline, especially in high potential markets such as Nigeria and Mozambique.

Africa container growth is 2% higher than worldwide average. As Africa grows the capacity in ports (current and new) will increase by about 8% while demand will increase by about 6% on average per annum. As Africa goes into more developments the capacity utilisation will decrease over the next few years. This will create a 64%-65% utilisation factor for African ports, not far from the 70% capacity utilisation benchmark, which implies looking at increased developments. There is also a need for hub ports with good water depth in the region.

Worldwide half the number of ships in fleets will be larger than 10 000 TEUs and this will bring about the following:

• Growth in scale of economies • Alliances with other shipping lines • Cascading of replaced medium ships onto smaller trades causing a shake-up in ports needing to hold greater ship sizes • Current volumes of containers in Africa are split as: o North Africa 45% pushed by transhipments in the Mediterranean. o East Africa 12% o West Africa 21% o Southern Africa 22%5

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The following map (Figure 4) indicates the location of the African ports and reflects the ports by size in terms of TEUs handled:

African ports by size Source: African Development Report 2010 – Port Development in Africa

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Below is a summary of some key African container ports, their container terminal capacities, and capacity constraining factors.

Capacity Country Port Container operator Capacity issues (TEU’s) Angola Luanda Sogester/Unicargas 300 000 Containers stored off site Angola Cabinda Port Authority 50 000 Berth depths Angola Lobito Port Authority 40 000 Berth depths Angola Namibe Port Authority 120 000 Berth depths Storage limitations and equipment Congo DRC Matadi Port Authority 100 000 productivity Republic of Pointe-Noire Bolloré 550 000 Store containers off site Congo Gabon Owendo/Libreville Bolloré Africa 150 000 Limited by storage space at port Maputo Port Mozambique Maputo 150 000 Limited by ships depth Development Company Mozambique Beira CFM & Cornelder 100 000 Limited by ship's size and depth Mozambique Nacala Portos de Norte 45 000 Lack of equipment and storage space Mozambique Pemba CFM - North 50 000 Capacity limited by depth at port Namibia Walvis Bay Namport 500 000 Set by type of ships to visit port Namibia Lüderitz Namport 50 000 Limited quay walls and depth at berth Tanzania Port Authority, Tanzania Dar es Salaam 250 000 Need more off-site storage of containers TICS

In terms of bulk ports there are very few ports in sub-Saharan Africa that focus on dry bulk products rather than on general cargo. Thus it tends to be that bulk terminals are relatively small and placed within the general break-bulk cargo and container berths. This is not expected to continue especially in Southern and Eastern Africa due to the need to export large quantities of mineral products, especially to the East.

For this reason it is important that new projects be developed to handle large volumes of mineral exports and especially in the case of Mozambique, Tanzania and possibly Angola new projects be carefully considered similar to existing bulk ports such as Richards Bay and Saldanha. The table below summarises the design capacity and current throughput of the most significant ports in the region in terms of bulk and break bulk.

Design Capacity Current Throughput Country Port (Mtpa) (Mtpa) Mozambique Maputo 12 8 Mozambique Matola 6 6 Mozambique Beira 5 2.8 Mozambique Nacala 1 0.7 Angola Lobito 1.2 1.2 Angola Luanda 2 ± 2 Namibia Walvis Bay 5 5 Tanzania Dar es Salaam 8 7.4 Tanzania Mtwara 0.20 0.09 Madagascar* Toamasina - 0.5 Mauritius* Port Louis - 7.07 Key African Ports – Bulk/Break Bulk capacity and current throughput

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2.3 PIPELINES

With the exclusion of South African pipelines there are only four existing pipelines of significance within the SADC region. The following map indicates the location of the four pipelines, (two relatively short pipelines in Angola with a total length of less than 90km are not shown):

Figure 5: Current pipelines within the SADC Source: www.theodora.com/pipelines

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Based on the Regional Assessment Services for Rail Networks, Ports and Pipelines Study (2015), the specifications and capacity of the existing pipelines are listed below.

Diameter Length Capacity

No Pipeline Start End (million (inches) (km) m³/year)

1 Tazama Crude Pipeline Dar es Salaam Ndola 8 & 12 1 700 1.3

2 Songas Gas Pipeline Songo – Songo Dar es Salaam 16 210 1 500

Beira – Feruka – Msasa Product Beira Feruka 10 300 3 2 Pipeline Feruka Msasa 8 210

4 Temane – Secunda Gas Pipeline Temane Secunda 26 865 3 800

5 Mtwara – Dar es Salaam Gas Pipeline Mtwara Dar es Salaam 36 500 8 000

Mombasa Nairobi 14 450 7.7

Nairobi Eldoret 14 325 1.93 6 Mombasa – Kisumu Product Pipeline Nairobi Eldoret 08-Jun 325 3.3

Sinendet Kisumu 6 121 0.9

7 West Coast Crude Oil Pipeline Ganga Gas Fields Libreville - 450 14

8 Libreville – Owendo Gas Pipeline Libreville Gamba - - 1 250

Capacity of current pipelines within SADC

MOZAMBIQUE AND ZIMBABWE

 The Beira – Feruka – Msasa petroleum products pipeline runs from the port of Beira in Mozambique to Msasa, which is located near Harare. Ownership of the pipeline is shared by Companhia-do Pipeline Mozambique- Zimbabwe (CPMZ), National Oil Infrastructure Company of Zimbabwe (NOIC) and Lonrho. • It is a 10” pipeline, approximately 300 km long and transports the following refined petroleum products in batches: o Gasoline o Diesel o Ethanol o Kerosene / Jet A1 o Paraffin

TANZANIA AND ZAMBIA

• The Tazama Pipeline is co-owned by the governments of Zambia and Tanzania. It is an 8 – 12” pipeline, approximately 1 700 km long and transports crude oil only.  • It terminates at the Indeni Refinery in Ndola (Zambia), where refined product is stored and distributed throughout Zambia via third party oil marketing companies. • The Tazama Crude Oil Pipeline had a design capacity of 1.3 million m³/year but is 46 years old and known to be in poor condition. • Pipeline leaks and mechanical failures in recent years have disrupted the flow of product to the Indeni Refinery and has not transported more than 1.0 million m³/year.

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MOZAMBIQUE AND SOUTH AFRICA

• The 865km Sasol gas transmission 26” pipeline runs from Mozambique to Secunda, for the transmission of natural gas to its Secunda processing plant. • The length of the pipeline in the South African side is 345km and 520km in Mozambique. • The gas is sourced from the Pande and Temane Gas Fields in Mozambique. • The pipeline is currently operating at or close to its design capacity of 3.8 billion m³/year • During 2010, construction on a new compressor station was completed at Komatipoort on the border of Mozambique and South Africa.

http://www.sunbirdenergy.com.au/southern-african- gas-market.html

TANZANIA

• The Songo Songo to Dar es Salaam Pipeline is owned and operated by the PanAfrican Energy and Songas partnership. • It is a 16” pipeline with a length of 210 km. • It is fully operational and assumed to be in acceptable condition from an integrity perspective and is currently operating at or close to its design capacity of 1.5 billion m³/year. • The Mtwara to Dar es Salaam Gas Pipeline is expected to be completed early 2015. • It is being constructed by the Tanzanian Petroleum Development Corporation. • It is a 36” pipeline with a length of 500km. It has a 24” spur to collect additional gas from Songo Songo Island.

ANGOLA

There are two relatively short gas pipelines (not listed in the map):

LUANDA FEED PIPELINES • A number of pipelines have been constructed to inter-connect a marine terminal (known as Temar), Luanda Refinery and a number of storage depots to the north east of Luanda Centre IBV5 to Luanda Airport Pipeline • A pipeline runs from IBV5, a storage depot near Luanda Refinery, to Luanda Quatro de Fevereiro • International Airport. This pipeline, constructed in 2004, is 30km long, 10” diameter and transports • Jet A1.6

3. OVERVIEW OF REGIONAL CORRIDOR DEVELOPMENT STRATEGIES

3.1 KEY ISSUES AND TRENDS HAMPERING DEVELOPMENT

Some key issues, developments, and trends were identified which may have a direct influence on planning, prioritization, and future sustainability of the various elements of the regional network, particularly with respect to major capital intensive infrastructure projects7:

LACK OF COORDINATION

• Difficult to coordinate large regional transport infrastructure projects due to the over border nature of the types of projects. • Challenging to align priorities, funding, planning and legalities of each country’s involvement.

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MANAGING INTERFACES

• The over border nature of regional corridors can lead to significant design and technology interfaces that must be addressed in the most effective way. • Project planners and decision-makers must carefully appraise the options for addressing such issues.

DUPLICATION OF STUDIES

• A number of studies based on the same project performed by different institutes. • Beneficial to update a study rather than perform a new study.

LACK OF UNDERSTANDING OF THE PPP PROCESS

• It is assumed that most new infrastructure projects will be privately financed despite recent failures, particularly in the rail sector. • In many cases, the role and ongoing participation of the Government, including the provision of guarantees, risk sharing, and necessary performance monitoring or regulation is not fully understood.

DEFINITION OF REGIONAL CORRIDORS

• Disagreements on the definition and purpose of regional corridors.

CONTINUED MODAL SHIFT TO ROAD

• Poor reliability and low traffic density of rail services drives cargo onto roads, preventing shippers from selecting rail as the preferred mode.

INCREASING HAULAGE COSTS

• Road transport prices are higher than necessary due to external influences such as regulatory requirements that cause low vehicle utilisation; empty backhaul; delays at ports, border posts and in-country customs clearance’; and significant trade imbalances on most corridors. • Higher transport prices can double the price of commodities.

3.2 LESSONS LEARNED

The lessons learnt from various studies with regards to developments and operations within the region are summarised below:

• Many of the regional railway systems in Africa are not functioning as they should, in virtually all respects: - poor reliability, high accident and failure rates, and high costs and low volumes. The railways are sometimes operating at a loss and are not financially sustainable. The reasons for this includes the initial loss of volumes and income from road transport deregulation, followed by lack of investment and deferred maintenance, which led to declining reliability and further loss of traffic. Paradoxically, the regional railways will all have to substantially increase their freight volumes in order to become viable. In order to recapture substantial volumes from roads, railways would have to focus on delivering better services to existing rail customers and build new share of the future market. The regional rail systems will also require much improved reliability and investment. • In reviewing trade and transport facilitation, it emerged that borders are a critical factor in time spent and cost of transport. As a result, attention has been turned to integrated or collaborative border management—developing a clearance system that addresses the coordination of all agencies with as many interventions as possible being done in parallel.

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• Though roads in the region generally have excess capacity, lack of maintenance due to insufficient funds slows traffic and leads to higher vehicle repair costs. Roads also suffer most from frequent stops for weighbridges, customs check points, police check points, road taxes, etc. • A further consideration is that economic and social factors in many countries inevitably place a constraint on their ability to implement a wide range of different PPPs. This is especially true of more sophisticated PPPs, such as road build-operate-transfer schemes, which are dependent on minimum traffic levels and widespread road user ability and willingness to pay. In countries with low vehicle populations and thin traffic flows, toll roads are unlikely to be an option for several years. This does not prevent such countries from making use of innovative and less complicated alternatives. • The analysis highlights that there is a strong correlation between the existence of a formal PPP policy and the number of PPP projects. The adoption of a policy is an expression of the seriousness of a government’s intent to pursue PPP options. It sends a strong signal to the private sector that a government is committed to PPP solutions and serves to stimulate investors‟ interest and risk appetite. • The existence of transparent and predictable procedures (e.g. PPP-type procurement rules) is a further factor that contributes positively towards investors‟ risk perceptions. It influences investors‟ pricing of risk, as it provides assurances that projects are well-conceived and have been thoroughly assessed for financial feasibility, and that governments are committed to their implementation. Thus, it enables states to procure at lower costs.

3.3 OVERVIEW OF SADC CORRIDORS

Corridors are paths connecting a number of core origin and destination points within Southern and East Africa and on these connections flow a number of different commodities depending on the underlying economies of the corridor.

The Southern African Development Community (SADC) is a socio-economic organisation that comprises 15 member states. There are 18 major transportation corridors in the SADC region illustrated below.

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Regional Corridors and freight infrastructure

TRANS KALAHARI CORRIDOR

The Trans Kalahari Corridor is connected from the Port of Walvis Bay to Gobabis, via Windhoek and stretches over a distance of 644km, where transhipment facilities are available, and then continues from Lobatse in Botswana by road. A tarred road links the Port of Walvis Bay with Botswana and Gauteng, South Africa and stretches over 1900km. It provides the most direct road route between Gauteng in South Africa and Windhoek and Walvis Bay in Namibia and

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links Botswana with the alternative ports of Durban and Walvis Bay. This corridor was developed as an alternative to the 400km longer Upington route, and provides access to a west coast port for South Africa.

The Trans-Kalahari Corridor (TKC) is complemented by the Maputo Corridor on the east coast of Africa, thus forming a transport corridor over the entire breadth of southern Africa serving as an east-west connector for international and domestic traffic. With the Maputo Corridor, it forms a coast to coast link.

A feasibility study is currently being conducted on a Trans Kalahari Railway connecting Gauteng, Botswana and Namibia by rail to the Port of Walvis Bay. It is based on high global demand and resulting high prices for minerals, particularly Botswana coal, and container and possibly automobile transit from the Gauteng to/from Trans-Atlantic markets.

TRANS CAPRIVI CORRIDOR

This corridor is also known as the Walvis Bay-Ndola-Lubumbashi Development Corridor. The railway line is connected from the Port of Walvis Bay to Grootfontein and stretches over a distance of 626km, where transhipment facilities are available, and then continues in Livingstone, Zambia.

It provides a direct road link between Windhoek and the Port of Walvis Bay to/from the SADC region via Katima Mulilo, linking with the copper belt in Zambia and southern DRC. It also serves as the ‘western gateway’ to SADC for trade with the Atlantic region linking to the North South Corridor.

The Namibian Railway was constructed between 1897 and 1930. The only railway cross border connection is to South Africa on Namibia’s southern border. The feasibility study of a Northern Extension of the Railway from Tsumeb to Oshikango was completed in 1999. There has been discussion on extending it for 5 kilometres into Angola, thus allowing border clearance on the railway which would be a simpler, faster process than that at the road facility. A feasibility study in Angola is currently exploring a connection between the Namibian railway extension and the Angolan line between the port of Namibe and Menongue in the southeast.

TRANS CUNENE CORRIDOR

The Trans Cunene Corridor connects central and southern Angola to northern Namibia and the Port of Walvis Bay. Provides the only operational, all year land transport link between the SADC states and Angola. This corridor has become increasingly important because of the congestion in the Port of Luanda, and the use of Walvis Bay and South African ports as alternatives for international imports.

The railway line is connected from the Port of Walvis Bay to Ondangwa and stretches over a distance of 905km. The construction of the line from Ondangwa to Oshikango was completed at the end of 2011. The Trans Cunene Corridor links Walvis Bay with southern Angola up to Lubango, over a distance of 1 600km, and extends north to Luanda totaling 2 300km in length.

Walvis Bay Port has significant spare capacity to deal with increased Angolan traffic. Namibian rail extension to the border at Oshikango has been completed. A feasibility study is underway for the construction of a connection from the border to the Angolan Namibe railway which is currently not connected to the rest of the Angolan network. A second border transfer point is being developed rapidly at Katwitwi.

TRANS ORANJE CORRIDOR

The Trans-Oranje Corridor (previously known as the Southern Extension) is a tarred road linking the Ports of Walvis Bay and Lüderitz with the Northern Cape Province of South Africa. The corridor is complemented by a railway line from the Port of Lüderitz extending southwards to the Northern Cape Province via Upington towards Port Elizabeth, Cape Town and Johannesburg.

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Construction on the 40km railway line extension between Aus and Lüderitz was completed in 2010, thus providing a rail link from the Port of Lüderitz to the Corridor.

NAMIBE CORRIDOR

The Port of Namibe was developed for the export of iron ore from the Cassinga mines in Angola. There have been numerous initiatives to reopen the mines and repair the rail connection to the mine. There are no other known major mineral deposits that would be served by this corridor. The intent is to eventually link the Namibe rail line to the TransNamib rail network.

The original railway line was opened in 1923 having a length of 756km. In order to transport iron ore from Cassinga region through the Moçâmedes Railways line, the line also had two branch lines, to Jamba (17km) and to Tchamutete (96km) built in the 60’s, linking the respective mines to the main CFM line. The current total route distance is 907km.

Rehabilitation of the Namibe - Menongue section (756km), including the Jamba and Tchamutete branch lines (115km) was completed in 2011.

LOBITO CORRIDOR

Lobito Port serves central Angola and the DRC and Zambian copper belts via the Benguela Railway. The railway was closed in 1975, but has been refurbished and reinstated again up to the Angolan border. The section to the DRC border at Luau has been rebuilt recently with Chinese assistance. The railway line within DRC through to Kolwezi is still not operational and needs extensive rehabilitation.

The Corridor is managed by Benguela Railways (Caminhos de Ferro de Benguela - CFB).The corridor links the Port of Lobito with the border town of Dilolo in the DRC, and stretches further through the DRC via the SNCC system to the copper belt and the southern African railway network. Strategically it is an important corridor for Southern Africa as it has major potential to facilitate the export of bulk commodities from the mineral rich Copper belt of Southern DRC and Northern Zambia. Lobito Port consists of 2 quays with 6 berths, 10.5m deep. Plans are in place for upgrade of the port facilities.

LUANDA CORRIDOR

The Port of Luanda is the main Angolan port, connected by road and rail to the agricultural region of Malange and also the important diamond mining areas to the north east with continuation into DRC.

The Malange Corridor development initiative is led by the Government of Angola and follows the Luanda–Ndalatando– Malange route. The corridor is also being planned to link the mineral-rich areas in Angola with the Port of Luanda (Malange Corridor) and eventually Namibe Port (Namibe Corridor). The Malange initiative will include development of the intermodal infrastructure connections at the Port of Luanda, reorganization of the maritime terminal, modernization of the technical nautical services units, modernization of navigational aids, and development of a dry port in Viana, on the western outskirts of Luanda.

The railway line and road to Malange, the capital of the province of Malange, has been extensively rehabilitated by Chinese firms. The construction of this railway link to the port will most probably motivate transporters to rather use the railways as a means of transport instead of road trucks. Angola’s northwest has rich mineral potential, including copper, silver, bauxite, mercury, lead, granite and mineral water. The Luanda Railways (Caminhos de Ferror de Luanda (CFL) joins Luanda to the Malanje agricultural (sugar) and mining areas in northern central Angola, from its terminal at the Atlantic Port of Luanda, the railway heads halfway inland towards Eastern Angola.

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BAS CONGO CORRIDOR

The Bas Congo Corridor consists of a rail and road corridor connecting the Matadi Port to Kinshasa. The line was refurbished 30 years ago and is still in a reasonable condition. Most of the traffic is currently conveyed by road.

The Matadi–Kinshasa Railway is a railway located in the Bas-Congo Province linking the Port of Matadi to Kinshasa, the capital of Democratic Republic of the Congo and is currently operated and managed by SCTP. The SCTP rail network is not linked by rail to the SNCC rail network.

The line is a single-track line with road access at four points. Similar to the SNCC railway, most transporters choose road transport to that of rail. This is especially true along the Matadi-Kinshasa railway, because the road running parallel to the rail has been upgraded and provides a more reliable service. This rail link is the natural transport mode for timber exports and other bulk traffic that is not time sensitive, including imports of general commodities to the city of Kinshasa

CONGO CORRIDOR

The country's total rail track length is 895km, all Cape Gauge. The Congo Corridor has two railway sections: East-West Section: Pointe Noire – Brazzaville (Mainline) The Congo Ocean Railway (COR; French: Chemin de fer Congo- Océan, CFCO) is regarded as the mainline section and links the Atlantic port of Pointe-Noire with Brazzaville stretching a distance of 510 kilometres. To relieve congestion on this stretch, a 91km realignment was done between Bilinga and Loubomo and added as an alternative detour over this section. North-South Section: Mont Belo – Mbinda Section. The North-South section is also known as the Comilog Line.

In terms of commodities transported, petroleum production, forestry, and agriculture are the main economic activities in the Republic of Congo. Petroleum production supplies a major share of government revenues and exports. Domestic food production does not meet current national demand, and food must be imported in large quantities. The major subsistence crops are cassava, rice, corn, and vegetables. Sugarcane, cocoa, and coffee, raised primarily on plantations, are important export crops, as are peanuts, palm products, and tobacco. Lumber and plywood are also important exports, as are diamonds.

MAPUTO CORRIDOR

The Maputo Corridor is generally seen as the most successful example of the ‘development corridor’ approach in southern Africa, as it has attracted significant investment in both industrial and infrastructure projects, and because of the successful establishment and operation of the Maputo Corridor Logistics Initiative (MCLI) – a private sector sponsored corridor management and investment promotion ‘facilitator’. The core elements of the corridor consist of the road and rail links to South Africa and the ports of Maputo / Matola, supplemented by the links to Swaziland and Zimbabwe. Besides serving the primary Mozambique industrial centre and the capital of Maputo, the corridor has a highly productive hinterland, including the Mpumalanga province in South Africa, and stretching as far as Gauteng and the possibility of future coal exports from Botswana.

The 600km railway service along the Maputo Corridor from Gauteng to the port is mainly operated by TFR, which controls 85% of the length, with the last 80km within Mozambique operated by CFM. The railway is electrified on the South African side, switching to diesel-electric in Mozambique. The upgrading of the Mozambican side was completed during 2009, allowing 60 wagon trains with 20 ton axle loads to be used.

LIMPOPO CORRIDOR

The Limpopo line is a spatial initiative which connects Zimbabwe to Mozambique as a development project between the two countries that ensures them access to the sea. The line runs between South Mozambique to the port of Maputo. At its peak, the Limpopo line handled about 2.1 million tons of transit freight and provided Zimbabwe with a shorter route to the sea.

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The Limpopo Railway line has been concessioned (along with the Goba line and the marshalling yards at Maputo Port) to Consortia 2000. The rehabilitation of the road network running parallel to this railway line. A further road linkage between the Maputo Development Corridor and the Xai Xai Pafuri route. The current proposal is that the existing route from Moamba to Sabie to Macia be rehabilitated and/or upgraded.

GOBA CORRIDOR

The Goba corridor links Swaziland to Mozambique and is considered as an import and export route via the port of Maputo. The Goba line is around 226km long and links the Matsapa industrial park and Maputo. It has capacity for trains with a maximum of 50 trucks travelling at speeds of between 50 and 60km per hour. According to Swaziland Railway Company, the Goba line is in good condition both on the Swazi and Mozambican sides, as a result of recent repairs. Swaziland Railways has spent over 125 million Euros in the refurbishment of the Mpaka-Goba railway corridor.

Originally the Goba line had been used to carry sugar produced in Swaziland to the port of Maputo, with volumes of between 200 000 and 240 000 tons per annum, as well as to import most of the goods the country needs.

On SR side the line was upgraded in 2004 from Matsapha to Siweni. The upgrade was the replacement of wooden sleepers by concrete sleepers and the continuous welding of the rail. It also involved strengthening of culverts and re- profiling the used rail and where necessary the formation was strengthened.

NORTH SOUTH CORRIDOR

The North South Corridor Links SADC countries as the prime regional trade route, providing connections to all the regional corridors and ports allowing for flexibility and competition. Extends from DRC and Tanzania in the north, through Zambia and alternative routes through Zimbabwe and Botswana, to Gauteng and the Port of Durban.

The North South Corridor serves as the main trade route for the SADC region, connecting the main economic centres, regional ports and linking all the regional development and transport corridors. The North South corridor carries virtually all the regional trade between the southern African countries, and also provides access to alternative routes and ports for international trade for the land locked countries.

The definition of the NS corridor has been limited to the following, from Durban to Gauteng in the south extending to Kolwezi in the north:

• The road from Durban to Gauteng to Beit Bridge to Harare to Chirundu to Lusaka to Ndola to Kasumbulesa to Lubumbashi to Kolwezi. • The alternative road route from Gauteng to Botswana (Martins Drift or Pioneer Gate) to Kazungula to Victoria Falls to Lusaka. • The alternative road from Beit Bridge to Bulawayo to Victoria Falls to Victoria Falls • The road from Durban to Gauteng to Beit Bridge to Bulawayo to Victoria Falls to Victoria Falls • The rail route from Durban to Gauteng to Beit Bridge to Bulawayo, to Victoria Falls to Lusaka to Kapiri Mposhi to Sakania to Lubumbashi to Kolwezi. • The alternative rail route from Gauteng through Botswana to Bulawayo • The road route from Beit Bridge to Harare to Tete in Mozambique to Blantyre in Malawi

BEIRA CORRIDOR

The Beira Corridor Authority was established as a state owned entity to implement the project, supported by the Nordic funding agencies, with a 10 year budget of US$450 million. A private sector business promotion group was also set up in 1985, the Beira Corridor Group (BCG), based in Harare, with similar structure and objectives to those of the later Maputo Corridor Logistics Initiative. This was a successful structure for the reconstruction and revitalization of the Beira Corridor (only the Zimbabwe leg), and has been partly repeated for the Maputo Corridor, but not elsewhere. The authority was closed at the completion of the Nordic assistance project in 1996, and the BCG carried on under a different name for some years, but eventually closed due to the deteriorating economic situation in Zimbabwe and lack of support.

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The port of Beira serves as the main port for Malawi’s international trade, but the railway link (originally damaged by flood) remains closed despite the recent reopening of the Sena line to Moatize, and there seems to be no agreed program or plan for reopening this strategic link (originally damage by flood). Transport between the port of Beira and Malawi is by road via Tete, at a much higher cost than could be achieved with the shorter rail route.

The main operational constraint to increase trade and transport volumes along the corridor has been the limited depth of the port due to siltation and lack of maintenance dredging. This has given the port a poor reputation despite its major advantage of having a large captive hinterland and being about 400km closer by road to the copper belt than any other port.

NACALA CORRIDOR

The Nacala Corridor transport system was initially established to serve the northern Mozambique agricultural sector with a railway link from Lichinga, through Cuamba and Nampula to the port of Mozambique.

In an effort to improve the transport infrastructure, the governments of Mozambique and Malawi decided to concession both railway systems and the port of Nacala to a private sector operator, with the expectation that this would motivate the financing of the reconstruction of the 77km Cuamba to Entre Lagos link and the Lichinga line.

The Port of Nacala is located in a protected bay close to deep water, served by road and rail in northern Mozambique – Cuamba and Lichinga, with a rail connection to Malawi, extending to Chipata in Zambia.

Looking at the current demand for rail cargo, there is more transport of imported and processed goods from the Port of Nacala to the inland, while transport of goods for export from the inland (domestic resource and inland countries) is relatively less, with a proportional comparison of roughly 75% to 25%. There is a future demand for coal transport from Tete Province via the port of Nacala that would require a rail line extension between Moatize and the rail network in Malawi.

TAZARA CORRIDOR

The TAZARA Corridor comprises the following infrastructure:

• The Port of Dar es Salaam • The TAZARA rail line from the port to Kapiri Mposhi in Zambia where it joins Railway Services of Zambia, the concession, south to Lusaka and northwest to the Copper Belt and to the Democratic Republic of the Congo (DRC) where it connects to the Congolese Railway, SNCC • The TANZAM road that follows much the same route as the TAZARA rail, and the road that runs from Mbeya into Malawi at Songwe, along the lakeshore from Karonga to Chiweta and inland to Lilongwe • The TAZAMA oil pipeline, which runs from the Port of Dar es Salaam to the Indeni Refinery at Ndola, Zambia • The road from Kasama to the Port of Mpulungu on Lake Tanganyika, providing for the transport of goods from Zambia to Rwanda, Burundi, and the eastern part of the DRC.

It is supported by the border posts at Kasumulu/Songwe, Tunduma/Nakonde, and Kasumbulesa/DRC; the Malawi Cargo Centres which operates dry port facilities at Dar es Salaam Port and Mbeya; Zamcargo which consolidates imports and exports for Zambia at Dar es Salaam Port; and Malawi Lake Services - originally envisioned as part of the corridor in Malawi, but which has not played a significant role to-date, despite investments and its concession. Malawi Lake Services is now undergoing a second attempt at a concession.

TAZARA rail is 1860km to Kapiri Mposhi where it meets Railway Services of Zambia. Capacity is 5 million tons, but it currently handles about 12% of that due to lack of locomotive and wagon availability. The TAZARA railway is jointly owned and managed by the Governments of Tanzania and Zambia. The 1860km railway line from Dar es Salaam to Kapiri Mposhi in Zambia was funded and built by the People’s Republic of China (PRC) in the period 1970 to 1976. The total cost of the initial construction, funded via an interest-free loan, was US$ 500 million.

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CENTRAL CORRIDOR

The Central Corridor is based on a rail link between Tanzania and Zambia and is also served by an oil pipeline between the two countries and the main road connection from Tanzania to South Africa through Zambia and Botswana. Mineral development served by the corridor in Tanzania is restricted to smaller gold deposits and the coal areas proposed to be linked to the Mtwara Corridor.

The Government of Tanzania has focused on developing the Central Development Corridor (CDC, or Central Corridor), which is planned to cover the geographical area between Dar es Salaam Port in Tanzania and Lake Kivu in Rwanda. The objective is to create an economic growth region, which will stimulate increased cross-border and international trade and investment especially in physical infrastructure, tourism, mining, agriculture, and manufacturing. This will link the road and the 1000 mm railway systems of central and northern Tanzania with the port of Dar es Salaam, also serving the Lakes Tanganyika, and Victoria by road and rail, Rwanda, Burundi, eastern DRC and Uganda, by road and lake ferry.

The Central Corridor railway system operates within Tanzania as the Tanzania Railways Limited, (TRL) and the concession operator is Rites from India. The railway assets are controlled by RAHCO, which is a state owned company. The system consists of about 2600km of 1000 mm gauge track, generally light 30kg/m rail with 15t axle loads.

LAPSSET CORRIDOR

A master plan for the LAPSSET project (Lamu Port, Southern Sudan, and Ethiopia Multimodal Transport Corridor) was developed that would include oil exports from Uganda (up to an estimated 7mtpa) and iron ore exports from Mt Kodo in the DRC. The latter would also include a dedicated rail link to accommodate the large volumes (up to 50mtpa).

A new container terminal at Lamu is included to serve southern Sudan, Ethiopia, and increased demand from the northern corridor, supplementing the Mombasa port. The MoUs for the proposed railway and pipeline were signed between the Government of Kenya and Ethiopia and South Sudan. The construction of 3 new container berths with access facilities was launched in September 2012.

Currently there are no major port operations at the port of Lamu in the Northern part of Kenya. With the growing volumes and congestion in Mombasa, Lamu Port could create an alternative entry point, especially for southern Sudan and Ethiopia.

NORTHERN CORRIDOR

This Northern Corridor serves trade among Kenya, Uganda, Rwanda, and Burundi and with the port of Mombasa. It links to routes to DRC, Southern Sudan, and Ethiopia. It is road and rail from Mombasa to Kampala and the rest is road only.

The total length of the Uganda Railway network is 1 241km. The length of the railway line from Mombasa to Kampala is 1 330km, operated by Rift Valley Railway (RVR). Three ICDs at Nairobi, Kisumu and Eldoret are underutilized because of the limited cargo on the railway. The northern corridor rail system operates within Kenya and Uganda as a narrow gauge (1000mm) system, compatible with the Tanzania Railway Limited (TRL) system on the central corridor in Tanzania. The line extends from the port of Mombasa to Nairobi, and further to Malaba, connecting to the Ugandan rail system serving Kampala and on to Kasese close to the DRC border.

The design of a new standard gauge railway is being considered and the transaction for advisory services has already been put out to tender by Kenya Railways Corporation. The project will rely on private sector investment, and be developed.

The proposed new railway will have to follow a new alignment, and it will not be an upgrade of the existing railway, which will be required to continue operations during the construction phase. It is therefore likely that there will be competition between the new and the old system.

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MTWARA CORRIDOR

The Port of Mtwara is located in a natural bay in southern Tanzania, about 50km north of the Mozambique border. It extends westwards via mostly unpaved roads to Tunduru, Songea, by ferry through Lake Malawi and road to Mzuzu. There is a possible extension to eastern Zambia.

The Mtwara Corridor is located in the northern most part of Mozambique and the southernmost part of Tanzania, linked to the sea port of Mtwara, located in Tanzania, and extending east towards Malawi and north and south of the Rovuma River, which serves as the border between Mozambique and Tanzania. The region has rich agricultural and mining potential, but has been relatively isolated for many years because it is remote from the main regional economic centres with poorly developed transport infrastructure.

There is presently no rail system serving the Mtwara Corridor. A narrow gauge system served the agricultural sector many years ago, but was unsuccessful and was uplifted. There have been some major and ambitious proposed upgrades to the roads, bridges, ferry services and a minerals based railway over a distance of more than 800km to the west of Mtwara port, near Lake Malawi centred on the coal fields in the Mchuchuma-Kateweka area, and iron ore deposits at Liganga. Unless justified by the SDI proposed anchor projects, the construction of an Mtwara Corridor railway, and associated port development, cannot be economically viable. It is generally considered that a new railway service needs to have a minimum of the order of 5 to 10 mtpa to be viable – depending on the tariffs and the value of the goods transported.

3.3.1 SALIENT ISSUES NEGATIVELY IMPACTING ON CORRIDOR OPERATIONS

Reflected in the Regional Infrastructure Development Master Plan (Status Quo):

RAILWAYS

Poor reliability, high accident and failure rates Theft of operating equipment Poor locomotive and wagon availability High operating costs and low freight volumes, thus not financially sustainable Road transport competition Gauge and method of locomotive propulsion not standardised Lack of continuity and interregional connectivity Lack of maintenance and investment Damage as result of conflict Operate below ‘design capacities’ due to poor track condition

ROAD NETWORKS

High transport costs Lack of – and high cost of maintenance Poor road conditions Missing links between key origins and destinations Occasional congestion between major nodes Delays at cities where by-passes have not yet been built Capacity and safety constraints due to lack of climbing lanes Delays at border posts High accident rates (road safety)

PORTS

Poor maintenance and lack of funding Most currently operate close to capacity

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Poor modal interface management Poor materials handling capabilities, equipment and related infrastructure Trade and transport facilitation delays Poor location and layout hampers expansion opportunities; Poor access Insufficient berths Depth constraint Congestion Poor condition

AVIATION TRANSPORT SECTOR

Inadequate runways and terminals Deficient navigation and traffic control equipment Skills and capacity constraints Lack of maintenance Need for modernisation

3.4 CORRIDOR DEVELOPMENTS AND PLANS

The list provides the various development plans across corridors relevant to Transnet, and indicates possible opportunities for investment.

CORRIDOR DEVELOPMENT STRATEGIES AND PLANS

NORTH-SOUTH • Establishment of a one stop border post at Beit Bridge • Upgrading of the road between Beit Bridge, Harare and Chirundu • Upgrading of the Plumtree to Mutare road – funded by DBSA • Construction of the Kazungula Bridge across the Zambezi – Botswana, Zambia • Establishment of a railway Joint Operating Centre at Bulawayo for the North-South Corridor • Recapitalisation of NRZ, study funded by DBSA – likely phased corridor approach • Recapitalisation of Zambia Railways, €120 million infrastructure Eurobond, including US$51 million signalling contract • Upgrading and repair of the Serenje Nakonde road in Zambia (Dar es Salaam corridor) • Development of a new one stop border post and road between Zambia and DRC to relieve congestion at Kasumbulesa • Revival of SNCC railway in the DRC, US$280 million World Bank funding

MAPUTO • Expansion of Matola terminal to > 25mtpa, coal, magnetite, iron ore – Grindrod/Vitol. • Upgrading of Ressano Garcia Maputo railway – doubling, electrification • Expansion of Maputo port terminals – Grindrod/DPW • Construction and upgrading of the rail link from Davel to Phuzumoya in Swaziland – R13,6 billion (excluding rolling stock). This will also create an alternative route between South Africa and Maputo via the Goba line

BOTSWANA COAL EXPORTS • Increased coal exports through the existing rail network via Mahikeng, to stimulate mining development in Botswana • Proposed construction of a Botswana to Lephalale rail link, connecting to an extension of the heavy haul coal export line to the Waterberg • Proposed development of the Trans-Kalahari railway to a new port at Walvis Bay for coal exports from Botswana. This is a long- term project that will require major take or pay supply contracts

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• Possible routing of Botswana’s northern coal exports through Zimbabwe to Matola/Techobanine • Port developments at Techobanine considered for export of Botswana coal.

BEIRA • Upgrading of the Beira Machipanda railway, being studied by MRGP, implemented by CFM, to be coordinated with NRZ to Harare • Further upgrading of the Sena railway to Moatize from 6mtpa to 12mtpa and later to 18mtpa – CFM • Reopening of the railway link from Sena/Mutare to Limbe/ Blantyre • Development of a new coal terminal at Beira port (CFM/ESSAR) – severely delayed. • Development of a deep sea bulk terminal at Savane, 30km north of Beira – ESSAR has rights. • Expansion of Beira port terminal (CFM/Cornelder) • Construction of a new coal export railway from Moatize 500km to a new port at Macuse – tender won by Ital – Thai, capex increased from US$3,5 billion to US$5 billion

NACALA • Construction of a new coal terminal at Nacala to handle cape size vessels – Vale • Expansion of Nacala port terminals – study by JICA • Rehabilitation of Cuambo to Lichinga railway – CFM • Development of an industrial complex at Liwonde in Malawi

DAR ES SALAAM • Revival of the TAZARA railway – funding not yet secured • Redevelopment of berths 1 to 7 in Dar es Salaam port – TPA/ TMEA/DBSA • Construction of new container terminal at berths 13 and 14 at Dar es Salaam port – TPA • Development of inland freight terminals at Kisarawe and Isaka • Construction of a new port at Bagamoyo linked to IDZ – TPA with Chinese funding • Recapitalisation of TRL railway on the central corridor, US$300 million WB funding and US$137 million government funding – TRL/WB, process commenced • Revival of lake Victoria marine services to Uganda, linked to TRL

LOBITO • Upgrading of Kolwezi to Dilolo railway in the DRC, being studied funded by MRGP • Construction of the North West Rail from Chingola to Solwezi and finally to Luau in Angola, • being developed in phases by NW railway and Grindrod. Detailed feasibility study being undertaken, subject to customer commitments • Upgrading of Lobito port

MTWARA • Development of Mtwara port serves the offshore gas development in Tanzania and Mozambique. • Construction of a new 800km railway to connect Mtwara port to coal and ore deposits in the Songea region – remains speculative

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3.4 FORECASTED REGIONAL DEMAND

A brief overview is provided of the current and long term forecasted traffic over the corridors. The overview focuses primarily on the railway demand within the SADC region and is inclusive of cross-border traffic from South Africa (i.e. South African, Domestic and Export volumes are excluded).

2013 2019

2044

Figure 7: Regional Demand

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3.6 STRATEGIC RAIL PROJECTS

In 2014/2015, Transnet conducted a study on the Regional Assessment Services for Rail Networks, Ports and Pipelines which highlights key developments within the SADC region. Based on the information from the study, a list of strategic rail projects that present opportunity for Transnet to invest is listed below. The projects reflected are currently in concept and feasibility stage so as to highlight larger investments required.

Strategic Rail Projects

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3.7 FOCUS AREAS

The following section details key projects that present possible opportunities and highlights potential threats to Transnet.

Country Major Developments and Opportunities

Key Project: Botswana (BR) to Lephalale (Ellisras) New Railway Line Companies: Transnet Freight Rail & Botswana Rail Participating countries: South Africa & Botswana Corridors: North South Corridor Railway Investment: US$ 263 million(TFR has allocated approx. R40 billion for the construction) Project Location Transnet Freight Rail recently announced that a heavy‐haul coal rail link between Botswana and South Africa will be constructed to link up with the existing Coal line. Objective The construction of this line which will link into existing coal heavy‐haul railway line is aimed at transporting coal from Botswana into South Africa to be consumed by state‐electricity generator Eskom, or exported via the seaborne market.

Botswana expects to export approximately 130 million tons of coal per annum when the necessary rail infrastructure is completed.

The Botswana Chamber of Mines (BCM) is working closely with the government and industry to develop solutions for the export of coal from three hubs: Walvis Bay in Namibia, Richards Bay in South Africa and Mozambique’s Ponta Techobanine. The plan is to eventually export 50 million tons through Walvis Bay, another 50 million tons to Ponta Techobanine and 30 million tons through Richards Bay. Description Transnet is planning to develop the Richards Bay Coal Terminal to support the expected volumes from Botswana and the Waterberg coalfields in South Africa. The anticipated railway line will be designed to carry 40‐80 million Botswana tonnes per year. Notes:  Transnet Freight Rail recently announced that a 105km heavy‐haul coal rail link between Botswana and South Africa as part of a R300 billion infrastructure investment program initiated by TFR  Emphasizing the timeline, TFR CEO Siyabonga Gama said that construction of the rail link would commence next year: “We are finalising feasibility studies [and we] will start constructing the rail link in 2015, immediately after the completion of feasibility studies”  The line will be designed to carry 40‐80 million tons per year. “We are planning to develop the Richards Bay Coal Terminal to support the expected [volumes] from Botswana and the Waterberg coalfield in South Africa” Opportunities  Possible opportunity to attract addition volumes from Botswana for internal consumption and exports via the eastern ports of South Africa.  Additional volume achieved from the link line will promote the feasibility for the development of the Waterberg Heavy Haul Line.  Supply of Rolling stock and infrastructure to support the related services. Threats  Trans-Kalahari and Techobanine development projects pose a threat, as this will attract traffic towards the ports of Walvis Bay and/or Techobanine.

http://www.worldcoal.com/handling/15042014/Coal_rail_projects_in_Botswana_727

3.8 Strategic port projects

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Key Project: Techobanine Heavy Haul Railway Companies / Contact: Ministries of Transport: Botswana, Mozambique and Zimbabwe Participating countries: Mozambique, South Africa, Botswana, Zimbabwe, Swaziland Corridors: Maputo Corridor Railway Investment: US$ 7–11 billion

Project Location : The anticipated railway line will stretch from the coalfields in Botswana to the newly constructed port of Techobanine in Southern Mozambique passing through the Eastern Botswana, Zimbabwe and Mozambique.

Objective New rail line to serve as coal export route through Zimbabwe, Botswana and Mozambique. The new railway line will be on a different rail gauge (i.e. standard gauge) from the existing narrow gauge rail networks in the Region. The aim is to develop a modern, high speed, heavy haul railway system.

Description The “Ponta Techobanine Project” is a project to be developed in the three countries and it consists of onshore deep sea port designed to cater for various types of cargoes and heavy haul railway line linking Botswana, Mozambique and Zimbabwe.

Notes  It is a green field railway line to function as coal export route from coal fields of Botswana to Mozambique.  The main purpose is to develop a high speed, heavy haul system to unlock the gateway to the Eastern markets.  Zimbabwe, Swaziland and Botswana, as landlocked countries, will benefit significantly from the extended inter-regional railway system that will link them to the deep-water port at Ponta Mozambique Techobanine.  Railway line is needed to make deep sea port feasible

Status  Countries are in the process of formalizing institutional arrangements.  The three countries are in the process of recruiting a consultant to carry out a pre-feasibility. Other Steps Funding Plan & Detailed Design Phase, Construction and Implementation Phase, Project Operational Phase  The three countries have agreed to finance the Pre-feasibility study at a cost of US$1.8 million, equally shared amongst them  For the project to be viable it will need to handle a minimum of 43 million tonnes of cargo per year.

Opportunities Investment opportunities in:  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats  Development of this project will induce competition of traffic from the Botswana region, particularly the coal fields.

http://www.ridmp-gis.org/ http://www.highbeam.com/doc/1G1-383012166.html http://www.clubofmozambique.com/solutions1/sectionnews.php

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Key Project: Trans Kalahari Railway Company: TransNamib and Botswana Railways Participating Countries: Botswana, Namibia Corridors: Trans-Kalahari Corridor Railway Investment: US$ 10 billion

Project Location The corridor stretches from Gauteng, South Africa, through Botswana to Walvis Bay, Western Namibia

Objective New rail line to provide new coal export route, and but can also be used as a shorter route for container freight to Gauteng

Description  Construction of a new railway line to link up to rail line in Namibia. Known as the Trans-Kalahari Railway, the 1500km. The proposed Trans-Kalahari Railway Line Project will link Botswana’s Mmamabula coalfields with the Walvis Bay Port in Namibia.

Notes  Prefeasibility Study for the Trans-Kalahari Railway line was completed in July, 2011 Namibia  The signing of the bilateral agreement between Namibia and Botswana for the construction of the Trans-Kalahari Railway Line Project took place on the 20 March 2014 near Walvis Bay Bird Island  The corridor can alternatively provide a West Coast port for Gauteng

Status The feasibility study feasibility on the construction of a railway to connect Botswana to a port in Namibia was completed. Invitations for Expression of Interest from potential Transaction Advisors and Contractors issued. The construction of the line is planned on a PPP basis and developers of coalfields in Botswana and South Africa among others are expected to bid.

Opportunities Investment opportunities in:  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats  Development of this project will induce competition of traffic from the Botswana region, particularly the coal fields.

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Key Project: Railway Systems Zambia (RSZ) Restructuring Company: RSZ / Zambia Railways Limited (ZRL) Project Sponsor: Government of Zambia Participating Countries Zambia Corridors: TAZARA and North South Corridor Railway Investment: US$ 120 million

Project Location From Zambian Copper Belt to South-western Tanzania

Objective

To improve the efficiency and effectiveness of the ZRL operations via restructuring of the concession and to ensure investment takes place into the railway infrastructure

Description In 2013, the Zambian government allocated US$ 120 million to kick start the NATIONAL RAIL REHABILITATION PROGRAMME notably for the acquisition of rolling stock and infrastructure.

The country has 848 kilometers of line and a capacity of 6 Mtpa. In 2003, it had achieved 2 Mtpa but by mid-2012 as a result of poor performance by the private operator, this had dropped to only 600 000 metric tons. The speed Zambia dropped from 70 km/h to 15 km/h. Of the 37 locomotives, only 24 are operational.

ZRL requires approximately 13 new locomotives over the next five years, a total of 2 600 wagons are required as well as 665 000 sleepers (180 000 are in stock)

Opportunities Investment opportunities in:  Funding upgrades on existing infrastructure  Funding construction of new link lines  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

This project will stimulate additional volumes from landlocked regions. Improving the efficiency on the network will stimulate road to rail migration and development of mining activities. Development of this project will create additional capacity and improve efficiency of the North South Corridor to facilitate additional volumes from the Copper Belt region.

Threats Possibility that volumes will be routed via the TAZARA railway to the port of Dar es Salaam instead of South Africa.

Africa Project Access (Aug 2014)

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Key Project: National Railways of Zimbabwe (NRZ) Revival Companies: National Railways of Zimbabwe Project Sponsors: Government of Zimbabwe, DBSA Participating countries: Zimbabwe Corridors: North-South Corridor, Beria Corridor, Maputo Corridor Railway Investment: Over US$ 200 million

Project Location South western Zimbabwe towards central Zimbabwe at Harare. Harare towards Beira, Mozambique. Harare towards Zambia.

Objectives Recapitalization and revival of NRZ Improving competitiveness of the rail service, increase in modal share

Description Investment in infrastructure, and rolling stock repair and acquisition

Notes  The main objectives of the project is the revival of the Zimbabwean railway services in order to increase the capacity of the NRZ system  DBSA has earmarked US$ 200 million pending appraisal

Status (2013) Zimbabwe  The Zimbabwe government says it is negotiating a build, operate, transfer (BOT) deal with an unidentified South African company to rehabilitate the rail network at an estimated cost of US$ 340 million  The work will involve track relaying, refurbishing signalling equipment and the purchase of new locomotives  The government is keen to attract private investment in National Railways of Zimbabwe (NRZ) which has large debts and is in a very rundown condition following years of political turmoil and international sanctions. The initiative follows the government's failed attempt to borrow around US$ 400 million to help recapitalise NRZ.

Opportunities Investment opportunities in:  Funding upgrades on existing infrastructure  Funding construction of new link lines  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats Possibility that volumes will be routed to Mozambique (i.e. port of Beira and Maputo) instead of South Africa.

http://www.ridmp-gis.org/ http://www.railjournal.com/index.php/africa/zimbabwe-negotiates-bot-deal-to-rehabilitate-railway-network

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Key Project: Chingola-Solwezi Railway Extension Companies: Northwest Rail Company Ltd. & Grindrod Participating Countries: Zambia Corridors: Lobito-Benguela Corridor Railway Investment: Phase 1 - US$ 489 million Phase 2 - Est. US$ 500 million Project Location The project is located in the North western part of Zambia and will stretch from Chingola to the Zambian-Angola border near Limbe with the intent of linking to the Lobito Corridor eventually. Objective The objective is to build, operate and maintain a new 590km cape gauge railway from Chingola in the heart of the old Zambian Copperbelt to the Angolan border in order to serve the mines in the region and eventually create a link to the coast via the Lobito Corridor for export and imports. Description The railway is to be built in two phases – Phase I extending from Chingola to the Kansanshi, Lumwana and Kalumbila mines (290 km of track), and Phase II to connect with the Benguela line on the Zambian-Angola border near Jimbe. Phase I is intended to service existing ore and finished copper traffic, and Phase II is intended to open up a direct corridor to Lobito which would allow landlocked Zambia to import oil directly from Angola, and to stimulate further mining activity in the Western Copperbelt region. Phase II is also intended to open up a direct corridor to Lobito which would allow landlocked Zambia to import oil directly from Angola. Notes  Freight service provider Grindrod’s wholly owned subsidiary Grindrod Mauritius and Zambian firm Northwest Rail Company (NWR) have signed an agreement to build, operate and maintain a new 590km Cape gauge railway from Chingola to the Angola border.  The intention of the project is to provide a trade link between Zambia to Angola via an extension from Chingola. Zambia  The Government of Angola and the GRZ have committed to realizing this Project as agreed in the Lobito development corridor agreements and bilateral transport agreements currently under negotiations.  Development of this railway will provide a shorter route alternative from the port of Lobito to the Zambian copper belt via a recently upgraded Lobito corridor.  The current route is through the Democratic Republic of Congo and is not fully operational due to dilapidated sections in the DRC between Dilolo and Kolwezi. Status Construction is subject to the conclusion of the phase I bankability feasibility study.

Opportunities Volumes are to be routed via South Africa in the short to medium term until the link to Angola is established.

Opportunities for Transnet is to:  Secure volumes originating on the links and in the Copper belt region by investing in various development projects and improving operations along the North South Corridor and/or;  Invest in development and operation of link line to Angola and/or;  Operating of train services along the Lobito corridor in the long term

Threats Copper volumes and related traffic can potentially flow through Angola. http://www.railway-technology.com/news/newsgrindrod-northwest-rail-to-develop-new-590km-cape-gauge-railway- 4172082 http://www.grindrod.co.za/News/101/Grindrod-and-Northwest-Rail-Company-partner-to-develop-the-Copper- Railway-in-Zambia The 2nd German-African Infrastructure Forum (Nov 2014)

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Key Project: Kolwezi – Dilolo Rehabilitation Companies: SNCC Participating Countries: DRC, Angola and Zambia Corridors: Lobito-Benguela Corridor

Project Location DRC (Kolwezi to Dilolo) and Benguela/Lobito Corridor

Objective Reinstate the Benguela corridor and create an access route from the mineral rich DRC to the port of Lobito.

Description Railway line rehabilitation. The rolling stock, the ancillary facilities including workshops, operating plant and equipment as well as telecommunication system would have to be replaced, refurbished and modernized. Institutional support would be vital to ensure satisfactory implementation and adequate management of the railway DRC system

Status The current status is in construction.

Opportunities Investment opportunities in:  Funding upgrades on existing infrastructure  Funding construction of new link lines  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats Possibility that volumes will be routed via the Benguela/Lobito corridor to the port of Lobito instead of South Africa.

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Key Project: Improving the TAZARA rail system Company: Zambia Railways Limited (ZRL) Participating countries: Tanzania Corridors: TAZARA Corridor Railway Investment: Over USD 500 million

Objectives Shift of freight from road to rail. The track has a good specification, but needs repair in sections – financing needed for equipment repair and working capital, with new management and a realistic business plan

Notes  Shippers on the Dar es Salaam Corridor would benefit from a stronger rail alternative to the roads.  TAZARA Nseluka – Mpulungu port. The railway lines involves linking Mpulungu Port to TAZARA line at Nseluka to facilitate the imports and exports from the Great Lakes region to the sea ports on the Indian ocean

Zambia Status  TAZARA hauls 0.5 mtpa. 1.2 mtpa is needed to break even.  Investment in rolling stock and locomotives is needed.  There is an MOU between the Chinese and Zambia/Tanzania, but no agreement yet.

Opportunities Investment opportunities in:  Funding upgrades on existing infrastructure  Funding construction of new link lines  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats Possibility that volumes will be routed via the TAZARA corridor to the port of Dar es Salaam instead of South Africa. http://www.ridmp-gis.org/

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Key Project: Trans Caprivi/ Western Zambia Railways_(Kolwezi (DRC), through Slowezi (Zambia)- Mongu-Sesheke-Katima Mulilo (Zambia)) Companies: TransNamib/ Zambia Railways Limited (ZRL) Participating countries: Zambia, Namibia Corridors: Trans Caprivi Corridor Railway Investment: Estimated at US$ 100 million

Project Location Kolwezi, DRC to Slowezi, Zambia to Mongu, Zambia to Sesheke, Zambia to Katima Mulilo, Namibia.

Objective Construction of new rail route for exports to Walvis bay and creates an alternative access route for the landlocked Copperbelt region to the seaborne market

Description The Trans-Caprivi Corridor links Zambia, the southern Democratic Republic of Congo and Zimbabwe to the Port of Walvis Bay.

Notes  In 2014, the Zambian authorities took over the 170 kilometre abandoned Namibia Livingstone-Namibia Border Rail Line in southern Zambia with the intention of connecting southern Zambia to Walvis Bay port.  This will provide a valuable route that links the copper belt to the Atlantic.

Status Concept Phase

Opportunities Investment opportunities in:  Feasibility studies  Funding construction of new link lines  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats Possibility that volumes originating in the copper belt region will be hauled via the Trans- Caprivi corridor to Walvis Bay instead of South Africa.

Africa Project Access (Aug 2014) http://www.ridmp-gis.org/

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Key Project: Lions Den - Kafue Rail Link Company: NRZ / Zambia Railways Limited (ZRL) Participating countries: Zambia, Zimbabwe Corridors: Beira Corridor Railway Investment: Over US$ 500 million

Project Location Lion's Den, Central Zimbabwe to Kafue, South Zambia Objectives To provide a more direct and shorter railway link between the sea ports in Mozambique and Zambia and countries to its north, through Zimbabwe.

The new line will link Zambia’s Railway to Zimbabwe and provide access to the port of Beira in Mozambique. Description This project envisages construction of a new railway line to link Lions Den in Zimbabwe and Kafue in Zambia in order to provide a shorter transit route for traffic to and from Zambia through Zimbabwe from and to Mozambican sea ports and an alternative route for traffic from and to seaports in South Africa to and from Zambia and countries in the north of Zambia. The railway line from Harare towards Zambia currently terminates at Lions Den and will need to be extended to join the Livingstone-Lusaka railway line at the nearest point i.e. Kafue. Notes Project would need to overcome significant regional political resistance. Severe topographical constraints

Expected results:  It is expected that the link can initiate new industrial growth with regional significance in Mozambique, Zambia, DRC and Zimbabwe.  Provide for significant employment and economic uplift in the communities along the corridor.  Facilitate development in mining and unlock investment opportunities along the corridor especially Zambia in agriculture and tourism.  Reduced transport costs due to a shorter route and elimination of transhipment in Harare and Lions Den. (i.e. from road to rail and vice-versa).  Freight will be diverted from road to rail thereby resulting in reduced road damage and maintenance costs.  Elimination of circuitous route through Bulawayo and Victoria Falls leading to less transportation costs.

Status Only Prefeasibility Study and Prelim Design was done to date, DBSA were going to appoint consultants, but status is unknown The project will require fresh prefeasibility studies

Opportunities Investment opportunities in:  Funding construction of new link lines  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats Possibility that volumes originating in the copper belt region will be to the port of Beira instead of South Africa.

http://www.ridmp-gis.org/ http://www.comesaria.org/site/en/opportunities_details

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Key Project: Mombasa - Malaba Railway Construction to standard gauge Companies: Government of Kenya and Uganda Participating Countries: Kenya, Rwanda and Uganda Corridors: Central Corridor Railway Investment: US$ 3.8 billion

Project Location Kenya, Uganda and Rwanda

Objective The purpose of the project is to link landlocked countries of Uganda and Rwanda with the port of Mombasa.

Description This will be achieved through the construction of the standard gauge railway (SGR) connecting Mombasa to Malaba (with a branch line to Kisumu) onward to Kampala, Kigali (with a branch line to Kasese) and Juba (with a branch line to Pakwach).The objective is to provide a reliable, efficient railway network leading to reduced cost of transportation and logistics that can lead to sustained rapid industrialisation and economic growth of the East African region.

Status The project is to be completed in two phases: Kenya Phase 1 (Mombasa to Nairobi) This phase is currently in development stages. The engineering procurement and construction (EPC) contractor identified. Construction has begun in October 2014.

Phase 2 (Nairobi – Malaba/Kisumu) Feasibility study and preliminary designs are in progress

Funding The government of Kenya currently incorporates in the countries annual budgets the railway development fund (RDF) to be serviced by a 1.5% levy on the cost of all imports. The main funding is expected from loans for EXIM Bank of China under government-to-government arrangements.

Opportunities Investment opportunities in:  Provision of rolling stock  Provision of Infrastructure and maintenance facilities  Provide training to operational personnel  Operating of train services

Threats n/a

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3.8 STRATEGIC PORT PROJECTS

There is a substantial difference between the current capacity of many ports in Africa and the demand especially over the longer term for import and export needs. For this reason there are a number of projects throughout Africa to develop new ports or substantially increase the capacity of the current ports.

Below is a list of strategic port projects in various key developing economies of Africa, in the container and dry bulk markets.

Strategic Port Projects

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3.9 MAJOR PORT PROJECTS

Latest information regarding various key projects in the region are reflected in the following list, which indicates possible opportunity for Transnet to be involved in port projects within Africa in the medium to long term.

Country Major development and opportunity

General Some recent infrastructure improvements made by foreign investors include a third berth in Dakar built by DP World, a third quay in Lomé for both Bolloré and TIL/MSC (part of which is now owned by China Merchants), and facilities in Cotonou (Benin) and Pointe-Noire for Bolloré. CATRAM, 2013

Angola A new port the Port of Caio, situated 9km north of Cabinda. The development will be completed in three phases. The first phase of this project includes new port premises, a large storage area for equipment of circa 100ha that includes industrial storage and offices for logistics. Scope of phase 1:  Commercial quay wall length: 775m  Rig facility quay length: 360m  Ship repair facility (200m x 200m)  Breakwater  Access channel: 150m wide; -13,5m CD  http://www.worldwideprocurementservices.com,2014

Sogester (APM Terminals) recently acquired the concession for the general cargo terminal. It is anticipated that they will increase the efficiency at the port by implementing the following measures:  Supply new cranes and cargo handling equipment  Refurbish quay walls and fenders  Improve customs controls to reduce dwell time of cargo in the terminal.

These interventions should be sufficient to meet the demand in the medium term. Depending on the growth of demand, deepening of the terminals can also be considered. The current status of the refurbishment of the Sacomar terminal is unknown. The terminal requires some structural rehabilitation as well as new mechanical equipment to become fully operational. Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

Congo The government of the Republic of Congo announced that China Road and Bridge Corporation (CRBC) has been awarded a contract to develop new general cargo and bulk terminals at Pointe Noire. A liquid bulk terminal will also be constructed 2 alongside other oil industry infrastructure. CRBC’s plans incorporate 31 berths spread over a 9km site, plus an associated business park, warehouses, a dedicated power plant and oil refinery. The Deepwater berths will be able to serve vessels of up to 300 000DWT.

Funding for the venture has been provided by the Chinese government and Chinese, mainly state-owned, banks, although details of project finance have not been released. Road and rail links will also be developed to connect the port to the rest of the country and neighbouring states. Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

Côte d’Ivoire In Abidjan port expansion plans include increasing capacity to 1m to 1,5m TEUpa. In early 2013, a US$933 million contract was signed between the Abidjan Port Authority and China Harbour Engineering Company Limited. The project involves waterway and basin dredging, construction of a container terminal and a Ro-Ro terminal, and waterway breakwater reconstruction

Dredging Today, 2013

APMT is investing US$40 million into the container terminal so that vessels of 8 000 TEU may be catered for in Abidjan Sea-web, 2013

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Country Major development and opportunity

Cameroon The Mbalam iron-ore project progressed with the signing of a convention between the Minister of Mines, Industries and Technological Development and the Australian firm Sundance Resources through its local partner Cam Iron. This will allow the developers to start securing the US$8,7 billion needed for construction work which will include a 510km rail line for the transportation of iron ore from the Mbarga Mine to the Cameroon coast, with a 70km rail spur line connecting to the Congo. A deepwater iron-ore export terminal will be built at Lolabe, in Kribi, with the capacity to handle Chinamax iron- ore bulk carriers.

Cameroon Tribune, 2012

DRC ICTSI and Simobile are developing a river port in Matadi, the company will construct and operate a river port, which will include a container terminal, along the river bank of the Congo River. Investment for the first five years will amount to approximately US$100 million. The facility will be constructed in two phases. The first one consists of two berths with a total length of 350 metres, the terminal will be able to handle 120 000 TEUs. Expansion of terminal capacity and berth length will be doubled under Phase 2.

businessmirror.com.ph, 2014

Ghana An agreement between the Ghana Ports and Harbours Authority and China Harbour Engineering Company was signed for work to begin on the first phase of the US$150 million Takoradi Port Infrastructure Development Project. The three-year project includes the demolition and reconstruction of port office buildings, the expansion and reconstruction of access roads, land reclamation and the development of water and electricity facilities

Cayman Net News, 2012

Kenya The US$25,5 billion Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) plan that by 2030 envisages a port, multimodal oil pipeline, fibre optic cable, road and rail infrastructure network to service the Lapsset corridor. During August 2014, it was announced that a US$478.9 million contract was concluded for the construction of the first three berths with the China Communication Construction Company. The construction of the port is due to start in September 2014.27 A lands claim delayed the start of construction, but after a settlement has been reached in December 2014, construction is expected to start early in 2015.

The current utilisation of the Mombasa port is expected to exceed the capacity of the terminal of 970 000 TEU’s. The demand is expected to rise to approximately 1.2 million TEU’s in 2015 which will exceed the current capacity, hence there is a need for the current upgrading and creation of new berths to the west.

Bagamoyo is located approximately in the middle between Mombasa and Dar es Salaam. A recent announcement from the Tanzanian government indicated that construction will start in 2015 and the first phase be completed by 2017. This will attract some of the cargo currently going through the Mombasa port.

Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

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Country Major development and opportunity

Mozambique Grindrod’s coal and magnetite terminal in Maputo (TCM) currently has an export throughput capacity of 6 million tons. Upon completion of phase 4, the capacity will increase to 20 million tons of coal and 10 million tons of magnetite. Phase 4 will require excavation and land reclamation, the construction of two new berths, a stockyard and railway infrastructure.

Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

Essar Ports is in the process of seeking approval for plans to invest up to US$25 million in a joint venture to develop a coal terminal at Beira Port, Mozambique. The ‘New Coal Terminal Beira’ project (NCTB) would be a joint effort shared between Essar Ports and CFM.

Port Technology, 2014

A greenfields project is the deep-water port project of Techobanine, this port will have capacity to handle 100mtpa of cargo it will constitute a strategic reserve of fuel and perfect infrastructure for the export of minerals from countries such as South Africa, Botswana and Zimbabwe among others. The Mozambican Prime Minister Alberto Vaquina announced that the government has already awarded the concession for the construction of a deep water port at Techobanine, in Mozambique’s southernmost district of Matutuine. The name of the company involved was not revealed but it was stated that the work could be concluded by 2015. The project will cost US$ 7 billion which the governments of Mozambique and Botswana are to raise. The port will have the capacity to handle 100 million tonnes of cargo per year.

coastweek.com, 2013

The rail and port projects in the central region of the country including the Moatize-Macuze line and the deep- water port of Macuze, to facilitate the handling of different products coming from the central region such as coal produced in Tete province. The Moatize-Macuze line will handle 25mtpa of products.

coastweek.com, 2013

Two port projects will take place in the northern region of Cabo Delgado, the development and expansion of the Pemba port and the rehabilitation of the Mocimboa da Praia port to handle all cargos and logistics in the exploration of natural gas extracted from the Rovuma basin.

coastweek.com, 2013

Namibia Namport has awarded a contract for the construction of a new container terminal to replace the existing container terminal. These berths will revert to general cargo. The berths along the existing terminals are to be deepened and extended. This would allow for more bulk and general cargo berths in the medium term. Namport in the meantime as a priority has awarded a contract for the construction of two tanker berths together with a new entrance channel to serve the new tanker berths in the location of the proposed new port. This would support the construction of the Trans-Kalahari railway that could transport up to 100mtpa of coal from neighbouring Botswana. It could accommodate a possible Namibian crude oil industry, coal exports from Dordabis, as well as iron ore from the Namibia-focused Deep Yellow's Shiyela iron-ore project.

Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

Proposed development of a new rail corridor linking the Northern Cape with import and export infrastructure to a major new deep-water port on the South Western coast at Luderitz in Namibia.

backafrica.com, 2011

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Country Major development and opportunity

Nigeria To handle the expected growth in container traffic for the largest economy in Africa, plans are in progress to develop four major ports in Nigerian waters, namely:  Lekki with ITCSI and CMA/CGM  Badagry with APM Terminals  Onne with APM Terminals  Ibom in the East still in concept phase up to 2,1m TEUpa, and 20mtpa of dry bulk cargoes

12th Intermodal Conference Africa, 2014

Sierra Leone A memorandum of understanding (MOU) between the Ministry of Mines and Mineral Resources and China Kingho Energy Group Co. Ltd. was signed in May 2013. The MOU includes US$6 billion of investments for the construction of a railway from Tonkolili to Sulima and a deep-water quay port for transportation of products, among others

Awareness Times, 2013

Tanzania In June 2013, US$211 million was allocated for the next 12 months to deepen the existing berths and to upgrade equipment. Over the next 5 years a further US$1.5 billion is needed to increase capacity by a further 80%. This work is only now going out to tender and might be further delayed as a result of lender concerns. TPA is presently asking for expression of interest for BOT bids for the construction of an additional container terminal to the south of the KOJ terminal.

An agreement with the Government of China to build a US$10 billion – US$11 billion new port at the historical port city of Bagamoyo (northwest of Dar es Salaam) was announced in 2013. A recent announcement was made regarding the construction of the Bagamoyo port (developed by China Merchants Holdings International) due to start construction in January 2015. The new port will be the biggest in Africa, handling approximately 20 million TEUs a year once completed in 2017. The project will include the building of a 34km road joining Bagamoyo to Mlandizi and 65km of railway connecting Bagamoyo to the Tanzania–Zambia Railway (TAZARA) and the Central Railway. Phase 1 of the project involves the quay, container yards, cargo terminals and dredging of the basin and approach areas (due for completion by 2017). The special economic zone will be fully developed by 2024.

http://sabahionline.com/, 2013

Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

A tender was issued in May 2014 by the Tanzanian Port Authority for the Design, Build, and finance for construction for four additional berths and multipurpose terminals at the Mtwara port. Mtwara Port is undergoing major expansion to cope with expansive demand estimated at 25mtpa of cargo in the next 20 years. The first phase of the port improvement has started with construction of four berths and expansion of the supply base for oil and gas exploration activities.

http://allafrica.com/,2012

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3.10 STRATEGIC PIPELINE PROJECTS

The list below provides Transnet with an overall view of Pipeline projects in various stages within the region. As illustrated in the figure below, majority of the projects lie within Mozambique, Tanzania and in Kenya.

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3.11 MAJOR PIPELINE PROJECTS

Latest information regarding various key projects in the region are reflected in the following list, which indicates possible opportunity for Transnet to be involved in pipeline projects within Africa in the medium to long term.

Country Major development and opportunity

Mozambique A feasibility study is currently underway for a proposed 2 600km gas pipeline, which if approved could run from Cabo Delgado to Maputo and possibly to regional markets further south, such as Richards Bay, South Africa. http://www.engineeringnews.co.za/article/feasibility-study-under-way-for-5-billion-moz-based-gas-pipeline-2013-09-20

There is a drive to increase the current capacity of the Beira-Feruka-Harare Pipeline to meet short term demand. However, in the medium to long term the construction of a new, parallel pipeline is likely. Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

Malawi The Qatari company Venessia Petroleum has undertaken a preliminary engineering and design study for the construction of a pipeline from Beira in Mozambique to Nsanje in Malawi, a distance of approximately 410km. A 0.9 million m³/year refined product pipeline between Beira and Nsanje (Malawi) has been proposed. The Malawi Government has pledged to invest approximately US$6,5 million in the project.

http://pipelinesinternational.com/news/pipeline_to_prosperity_developing_pipeline_infrastructure_in_sub- saharan_af/061149/

Tanzania East Coast Transmission is proposing to expand the Songas Pipeline, which is the onshore section of Tanzania’s Songo-Songo – Dar es Salaam Pipeline. The intention is to initially double the existing 207km Songas Pipeline, which runs from Somanga Funga, where the offshore pipeline from the Songo-Songo gas field connects to the mainland, to the pipeline’s current terminus at Dar es Salaam.

http://pipelinesinternational.com/news/pipeline_to_prosperity_developing_pipeline_infrastructure_in_sub- saharan_af/061149/

Work is currently being carried out to replace damaged sections of the Tazama pipeline. In addition, pump station equipment is being renewed to reduce the frequency of mechanical failures The Tazama Crude Oil pipeline is in poor condition and if the existing/new Indeni refinery is to have a reliable crude feed then sections of the pipeline will require replacement. However, replacement of pipeline sections will not increase capacity and therefore replacement by a parallel pipeline will be of more merit. The proposed replacement pipeline is competing with the proposed refined product pipeline from the Lobito refinery in Angola and the proposed extensions from the proposed Harare storage hub in Zimbabwe. Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

Zimbabwe African-owned Mining, Oil and Gas Services Company (MOGS) is planning to construct a second 550km fuel pipeline from Beira to Harare. Construction is estimated to be completed 24 to 30 months from signing of the agreement. Capacity is expected to be 400m litres per month, that will feed into the Mabvuku, Msasa and Feruka storage facilities that are currently estimated to be at 5% utilisation The plan will also entail building connecting pipelines to Malawi, Zambia, Botswana and the Democratic Republic of Congo (DRC). Future demand is expected to exceed the maximum throughput achievable for the existing Feruka to Harare Pipeline. The construction of a new, parallel pipeline is currently being considered to meet full future demand. This pipeline may be constructed by 2020 at the same time as the construction of the new Beira (Mozambique) to Feruka Pipeline. Possibility of future expansions from Harare via pipelines to Botswana, Zambia, Malawi, the Limpopo Province of South Africa and the Tete Province of Mozambique. Regional Assessment Services for Rail Networks, Ports and Pipelines Study 2015

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4. TRANSNET STRATEGIES AND DEVELOPMENT PLANS

4.1 STRATEGY

Strategy revenue drivers and support services Reference: Transnet Planning and Sustainability strategy session: 26 March 2014

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