South Sudan Corridor Diagnostic Study and Action Plan

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South Sudan Corridor Diagnostic Study and Action Plan South Sudan Corridor Diagnostic Study and Action Plan Final Report September 2012 This publication was produced by Nathan Associates Inc. for review by the United States Agency for International Development under the USAID Worldwide Trade Capacity Building (TCBoost) Project. Its contents are the sole responsibility of the author or authors and do not necessarily reflect the views of USAID or the United States government. South Sudan Corridor Diagnostic Study and Action Plan Final Report SUBMITTED UNDER Contract No. EEM-I-00-07-00009-00, Order No. 2 SUBMITTED TO Mark Sorensen USAID/South Sudan Cory O’Hara USAID EGAT/EG Office SUBMITTED BY Nathan Associates Inc 2101 Wilson Boulevard, Suite 1200 Arlington, Virginia 22201 703.516.7700 [email protected] [email protected] DISCLAIMER This document is made possible by the support of the American people through the United States Agency for International Development (USAID). Its contents are the sole responsibility of the author or authors and do not necessarily reflect the views of USAID or the United States Government. Contents Acronyms v Executive Summary vii 1. Introduction 1 Study Scope 1 Report Organization 3 2. Corridor Infrastructure 5 South Sudan Corridor Existing Infrastructure and Condition 5 3. Corridor Performance 19 Performance Data: Nodes and Links 19 Overview of South Sudan Corridor Performance 25 South Sudan Corridor Cost and Time Composition 26 Interpretation of Results for South Sudan Corridor 29 4. Legal and Regulatory Framework 33 Overview of Legal System 33 National Transport Policy 36 Transport Legal and Regulatory Framework Analysis 40 Customs and Taxation: Legal and Regulatory Framework Analysis 53 5. Trade and Traffic Forecasts 59 Economic and Sectoral Overview 59 Methodology for Trade Forecasts 61 Trade Forecast Results 67 Traffic Allocation 73 II 6. Proposed Projects and Action Plan 79 Approach 79 Road Transport 80 Mombasa Port 82 Rail Transport 83 Pipeline Transport 83 River Transport 84 Legal, Regulatory, and Institutional Components 84 Action Plan 86 Appendix A. Profiles of Proposed Projects Appendix B. Workshop Report ILLUSTRATIONS Figures Figure 1-1 CDS Geographic Scope 2 Figure 2-1 Mombasa Port Traffic Composition by Commodity, 2010 7 Figure 2-2 Mombasa Port Transit Traffic, 2010 (percent) 7 Figure 2-3 Current Layout of Mombasa Port 9 Figure 2-4 National Road Network Classification for South Sudan 12 Figure 3-1 Cost and Time for Corridor Destinations—Imports, 2010 (Light TEU) 27 Figure 3-2 Cost and Time for Corridor Destinations—Imports, 2010 (FEU) 28 Figure 3-3 Cost and Time for Corridor Destinations—Imports, 2010 (Break Bulk) 29 Figure 4-1 Institutional Framework for Road Infrastructure 41 Figure 4-2 Weighbridge and Weighbridge Operator’s Building at Nimule 42 Figure 4-3 Vehicle License and Road Licenses 46 Figure 4-4 Institutional Framework for Road Transport & Traffic 47 Figure 4-5 Ideal and Current Regulatory System in South Sudan 48 Figure 5-1 Methodology for Estimating Agricultural Production 61 Figure 5-2 Agricultural Trade, 2009-2030 68 Figure 5-3 Scenarios for Import Growth 70 Figure 5-4 Scenarios for Export Growth 71 Figure 5-5 Trade Balance Under Three Scenarios 71 Figure 5-6 Non-resource Trade Growth, 2010-2030 72 Figure 5-7 Oil Export Growth by Scenario, 2010-2030 73 Figure 5-8 Base Case, Road Traffic Allocation to Corridors 75 Figure 5-9 Base Case, Total Traffic Allocation to Corridors 75 III Figure 5-10 Base Case, Mode Allocation, 2015-2030 76 Figure 5-11 Alternative Scenario Road Traffic Allocation to Corridors, 2009-2030 77 Figure 5-12 Alternative Scenario Mode Allocation, 2015 and 2030 78 Tables Table 2-1 Mombasa Port Traffic, 2005-2010 (000s tons) 6 Table 2-2 Characteristics of Mombasa Port 8 Table 2-3 Mombasa Port Container Traffic, 2005-2010 (TEU) 10 Table 3-1 Port Data for Imports to South Sudan 20 Table 3-2 Border Post Data for Containerized Cargo 21 Table 3-3 Road Data for Containers and Break Bulk, Juba via Kampala 23 Table 3-4 Road Data for Containers and Break Bulk, Juba via Kaya 23 Table 3-5 Road Data for Containers and Break Bulk, Juba via Nadapal 24 Table 3-6 Road Data for Containers and Break Bulk, Juba Direct 24 Table 3-7 Road Corridor Performance for Imports by Cargo Type and Destination, 2010 25 Table 3-8 Mombasa Port Performance, Imports 29 Table 3-9 Road and Border Post Performance, Imports 31 Table 5-1 Cereal Yields and Benchmark Countries (tons per hectare) 62 Table 5-2 Projections for Agricultural Trade (in tons per year) 69 Table 5-3 Volume of Average Annual Agricultural Trade, High and Low Scenarios 70 Table 5-4 Projections for Non-resource Trade (in tons) 72 Table 5-5 Fuel Imports, 2010-2017 73 Table 5-6 Base Case, Mode Allocation of Traffic by Corridor (tons) 76 Table 5-7 Alternative Scenario Mode Allocation of Traffic by Corridor (tons) 78 Table 6-1 Road Link Constraints 80 Table 6-2 Institutional Framework for Transport Sector 84 Table 6-3 Action Plan Projects 88 Exhibits Exhibit ES-1 Corridor Performance Assessment viii Exhibit 4-1 Foreign Truck-related Charges at Nimule 51 Exhibit 4-2 Good-related Charges Imposed by Ministry of Finance at Nimule Border Post 55 Exhibit 4-3 Other Goods-related Charges Imposed by National Agencies 56 Exhibit 4-4 State Goods Taxes 57 Acronyms CDS Corridor Diagnostic Study CES Central Equatoria State CESRA Central Equatoria State Revenue Authority CFS Container Freight Station COMESA Common Market for Eastern and Southern Africa CPA Comprehensive Peace Agreement DRC Democratic Republic of Congo EAC East African Community EACDS East Africa Corridor Diagnostic Study EES Eastern Equatoria State EIRR Economic Internal Rate of Return GOSS Government of South Sudan GDP Gross Domestic Product GVM Gross Vehicle Mass ICAO International Civil Aviation Organization ICD Inland Container Depot IMF International Monetary Fund IMT Intermediate means of transport IPA Investment Promotion Act JICA Japan International Cooperation Agency MoRB Ministry of Roads and Bridges MoT Ministry of Transport NGO Non-Governmental Organization NTB Non Tariff Barrier NMT Non-motorized means of transport OSBP One stop border post PIDA Program for Infrastructure Development in Africa PPP Public-Private Partnership RECs Regional economic communities RMG Rail Mounted Gantry RTG Rubber-Tired Gantry RVR Rift Valley Railways VI SADC Southern Africa Development Community SSCDS South Sudan Corridor Diagnostic Study SISP Sudan Infrastructure Services Project SPLA Sudan People’s Liberation Army SSP South Sudan Police SSRA South Sudan Roads Authority STS Ship-to-Shore TA Technical Assistance TEU Twenty-foot equivalent unit TSP Transport Sector Policy UNWFP World Food Program USAID U.S. Agency for International Development WTO World Trade Organization Executive Summary Anchored by the Port of Mombasa in Kenya, the Northern Corridor is the principal transport route for regional and international trade of South Sudan. Because of inadequate physical infrastructure and inefficiency, transit times are long and costs prohibitively high in the corridor. Freight costs per km for South Sudan cargo is more than 50 percent higher than costs in the East African Community and transport costs can exceed 100 percent of the value of imports. Reducing those costs and achieving transport logistics efficiency—and ultimately a sound regional transport system—will facilitate trade and investment, the cornerstones of economic growth and prosperity. Following on the successful study for East Africa in 2011, this South Sudan Corridor Diagnostic Study (SSCDS) examines the performance of South Sudan’s main transport corridor and subcorridors and presents an Action Plan for removing impediments to efficient transport logistics. To make the most of existing and ongoing work, the Nathan Associates team first gathered and reviewed relevant studies, reports, and other documents as we became aware of them. These covered road plans and projects, regulatory and legal frameworks, and documentation of customs procedures. Gathering such information was complicated by the lack of a repository for reports and other documents. The team conducted a FastPath® assessment of the performance of South Sudan’s trade corridors that link to the Northern Corridor. We gathered data on transport cost, time, and reliability through extensive interviews with stakeholders, including shippers (traders, manufacturers, and retailers), transport service providers (ports, shipping lines, inland container depots, truckers, and railways), freight forwarders (clearing agents, insurance companies) and government ministries and agencies (transport ministries, customs, and regulators). The assessment highlighted the physical bottlenecks and other problems that impede the transport of imports and exports from South Sudan (see Exhibit ES-1). VIII SOUTH SUDAN CDS AND DRAFT ACTION PLAN Exhibit ES-1 Corridor Performance Assessment When compared to other international corridors, South The interruption of service in the Tororo-Pakwach Sudan’s corridors are performing at a level that railway has halted multimodal service. Multimodal corresponds to “fair” in the Juba-Nimule section and shipments can greatly reduce transport costs for “poor” in the other corridors within South Sudan. large volumes of heavy goods, increase transport Specific observations are as follows: competition, and curb road deterioration by reducing the number of trucks hauling heavy loads Road transport represents the bulk of transport cost by road. (87 percent to 94 percent) while the port represents the bulk of transport time (60 percent to 64 percent). Lack of clear customs procedures creates The dependence on road transport along with opportunity for corruption and long delays at the inefficient road operations and regulation drive up border crossings into South Sudan. costs and prices. Berth and yard congestion and the lack of customs Road transport costs are high due to lack of clearance coordination contribute to excessive dwell backhauls, poor road conditions, and security time in Mombasa (up to 9 days). concerns.
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