Railway Newsletter

Countries within the East African Community (EAC) have decided to part-finance the construction of a new modern railway system estimated to cost US$25 billion.

Improving infrastructure is a top priority for the five EAC countries (Burundi, Kenya, Rwanda, Uganda and Tanzania) seeking to attract investors in the region, according to EAC deputy secretary general Alloys Mutabingwa, cited by The East African publication.

Canadian-based professional services firm CPCS Transcom advised EAC on the development of a railway master plan for the region, by taking into consideration an economic, environmental and social analysis of railway options and a review of legal and regulatory implications. CPCS Transcom consultants have estimated an increase in demand for regional rail freight traffic. CPCS, specialised in projects funded by international financial institutions, has completed more than 800 projects in 80 countries.

The East African Development Bank is to manage a centralised fund created by equal contributions from each EAC state. An infrastructure agency will be in charge of human and capital resources. Public-private partnerships may be implemented to allow participation by private investors, who have expressed interest in the project.

(Sources: The East African; CPCS Transcom)

The Nigerian Federal government has set aside N12.5 billion (US$82.6 million) for the revival of the Jebba-Kano section, part of the 1,128 km railway line between Kano and the city of Lagos.

Nigerian company Costain West Africa, in charge of the rehabilitation of the 640 km line, is required to complete works by December 2010. Former subsidiary of Costain UK Group, Costain West Africa went public in 1974 and provided public and private funded civil engineering projects in Nigeria.

Last year, China Civil Engineering Construction Corporation was awarded a N12.13 billion (US$80.2 million) contract for the renewal of Lagos-Jebba section.

(Source: Costain West Africa)

The annual subsidy of N$83.9 million (US$10.9 million) allocated by the Namibian government to modernise the country's railway infrastructure is not enough, according to allAfrica.com, which quoted a report of the Institute of Public Policy Research (IPPR).

State-owned TransNamib is in need of major investment programmes to improve its efficiency, after being denied any subsidy in 2009. "The extension of harbours as well as of the railway lines to Oshakati and Angola, and the plans for a Trans-Caprivi railway line will require a major rehabilitation and upgrade of the existing network," said IPPR research associate Klaus Schade.

For the period 2010 to 2013, the government has budgeted N$2.2 billion (US$285 million) for infrastructure upgrading works and N$279 million (US$36.2 million) for the extension of the northern railway line.

(Source: allAfrica.com)

Algerian national agency for railway development ANESRIF (l'Agence Nationale d'Études et de Suivi de la Réalisation des Investissements Ferroviaires) has awarded a contract to design and build a 185 km railway line between Rélizane, Tiaret and Tissemsilt.

The joint venture between Spanish company FCC and ETRHB Haddad has been selected for the €935.5 million project, which includes railway stations and maintenance buildings. The single track new line allowing speeds up to 160km/h is part of the 2009-2014 national mega-plan for economic development.

FCC Construcción has built several railway lines in Spain, India, Germany and Greece. FCC Group operates in 54 countries worldwide and has more than 92,000 employees. It posted a €12.700 billion turnover in 2009.

The Algerian group ETRHB Haddad, with 6,000 employees, is involved in projects under the government's 200 billion dinars Programme of Complementary Support for Economic Growth.

(Sources: ANESRIF; FCC; ETRHB Haddad)

North and South Sudan are linked again by a railway line between the towns of Babanusa and Wau. Freight services on the 446 km line, opened in 1962 but cut 22 years later during the civil war, will provide a crucial economic connection at lower transportation costs. The Sudanese government paid for more than half of the US$51 million project through the Unity Support Fund, according to SudanTribune. The Multi-Donor Trust Fund (MDTF), administered by the World Bank, funded the remaining cost.

(Source: SudanTribune)

The old rail network of the Société Nationale des Chemins de fer Congolais (SNCC), the state railway in the Democratic Republic of Congo, is to be repaired with the World Bank's assistance. Rehabilitation of 700 km of the total 3,641 km of track and acquisition of locomotives and rolling stock are the main targets of the project, according to Railway Gazette International.

Transport and communications minister Mpita Mathieu is leading a programme of reforms, with technical assistance privided by Vecturis, a Belgium-based rail operator. The African Development Bank (ADB) and the government injected almost US$20 million last year to stabilise SNCC activities. Railways Africa reported the government estimated that the US$360 million necessary for the near future could be financed by Chinese banks and the World Bank.

(Sources: Railway Gazette International; Railways Africa)

Citadel Capital has become the owner of a 17.5 per cent stake in Rift Valley Railways (RVR) of Kenya and Uganda, after acquiring a 49 per cent stake in Sheltam Railways Company, the largest single shareholder in RVR. "Citadel Capital will look to inject more than US$150 million in Kenya Uganda Railways over the coming five years," said Citadel Capital Managing Director Karim Sadek. RVR is backed by Citadel Capital in its negotiations with América Latina Logística (ALL) for a technical agreement.

Citadel Capital is a private equity firm in Africa and the Middle East with US$8.3 billion investments in 15 industries spanning 14 countries. RVR operates an old rail network connecting Kenya and Uganda with the port of Mombasa, under a 25-year concession agreement.

(Source: Citadel Capital)

Mozambique has started planning for a US$11 billion project, which is part of the Strategy for Integrated Development of the Transport System. The newspaper Notícias writes that the transport project is intended to create a development corridor to facilitate implementation and management of a rail network integrated with ports and roads. The network will include about 2,000 km of new railway line, bridges and 6,392 km of feeder roads. Five railway lines will be designed to ensure connections with ports and SADC (Southern African Development Community) countries. The rail component of the transport scheme is expected to cost US$5 billion and be operational by 2023.

BBC News reported that Mozambique's transport minister announced that the government secured US$500 million to build a new railway link between coal mines in Moatize and the port of Nacala. The 445 km rail line is planned to open for operations by 2015.

(Sources: Notícias; BBC News)

South African Transnet Group announced a 2.9 per cent increase in revenues, up to R17.3 billion for the period April-September 2009, after implementing a series of cost-cutting programmes. However, general freight decreased from 43.2 million tonnes in the first half of 2008 to 35.6 million tonnes this year, mainly due to negative effects of the global economic crisis. The Group's rail freight division, Transnet Freight Rail, reported an increase of 7.4 per cent, up to R9.9 billion, compared to the previous period. Transnet Rail Engineering, responsible for rolling stock maintenance, had its internal revenue dropped by 13.0 per cent to R3.0 billion, while its external revenue increased by 42.7 per cent to R805 million, compared to the first half of the financial year 2008/2009.

(Source: Transnet)

Various options for the Trans-Kalahari railway line, planned for coal transport between Botswana and Namibia, are currently analysed by a pre-feasibility study, according to The Namibian Economist, which cited the Namibian ministry of transport and officials of the Walvis Bay Corridor Group. The future rail line, estimated to cost US$1.4 billion, will extend the present Trans-Kalahari Corridor from the port of Walvis Bay (Namibia) to Lobatse in Botswana and further to the Gauteng Region of South Africa.

(Source: The Namibian Economist)

On 22 October 2009, the National Assembly of the Federal Republic of Nigeria endorsed the second reading of a bill to establish the Nigeria Railway Corporation and introduce private sector participation in the provision of rail services. Another bill seeking to provide for the implementation of public-private contracts and to establish a set of rules governing public partnership was also read for the second time. Both bills have been referred to parliamentary committees for subsequent legislative procedures.

China Civil Engineering Construction Corporation (CCECC) announced on 28 October 2009 that it reached an agreement with the Nigerian government to restart work on the 186.5 km railway between Abuja and Kaduna, according to TradingMarkets.com. The US$850 million contract is part of the Nigerian railway modernisation project. It is expected to be part-funded through a concessionary loan of US$500 million from the Chinese government and to be carried out in three years.

Railways Africa reported that the country's Federal Executive Council allocated US$874.3 million towards the railway modernisation project, which includes the new line Abuja-Kaduna and the rehabilitation of the existing section from Lagos to Ibadan.

(Sources: The National Assembly of the Federal Republic of Nigeria; TradingMarkets.com; Railways Africa)

Rwanda infrastructure minister Linda Bihire has recently expressed confidence in the future of the rail project designed to link Dar-es-Salaam with Rwanda and Burundi. The New Times, published in the Rwandan capital Kigali, wrote that some reports suggested that the current Tanzanian railway concession could have been an obstacle to the multinational plan.

In September 2007, Rail India Technical and Economic Services Limited (RITES Ltd) won a 25-year contract to operate passenger and freight services on the Tanzanian rail network.

(Source: The New Times)

On 28 August 2009, a freight train carrying fuel derailed in Yaoundé, triggering flames which killed one person, while another was severely injured. One day later, a passenger train with around 1000 people on board came off the track near Cameroon's capital. Communications minister Tchiroma Bakary said that at least five people were killed and 275 hurt, according to News24 online resource.

(Source: News24)

The United States Trade and Development Agency has granted US$750,000 to support a feasibility study for the Regional Rail Integration Project, which is part of the Economic Community of West African States (ECOWAS) master plan to build 17 new railway lines in West Africa. The West African Economic and Monetary Union (UEMOA) has invited US companies to submit bids for the 450 km railway line, expected to link Bamako (Mali) with Côte d'Ivoire and the port of Dakar in Senegal.

(Source: The United States Trade and Development Agency)

Ghana Railways Company (GRC) has been granted US$2 million to revitalise the western rail line, its main source of revenue. Modern Ghana news online reported that Mr Mike Hammah, the minister of transportation, said that its government was seeking advice from a consultancy firm to identify and solve GRC's main problems. Minister Hammah revealed at a meeting with workers of the company that revamping of the Accra to Tema rail line was also a major priority of the government.

However, the recent US$225 million loan agreement approved by the World Bank for the transport sector development programme has no rail component.

(Source: Modern Ghana)

The Ethiopian government is planning to build 5,000 km of railway track, mainly for freight transport, once the European Union-funded renewal project is completed. The future rail network is to be standard gauge and electrified, BBC News reported. The only Ethiopian railway, the historic narrow gauge line between the capital Addis Ababa and the neighbouring country of Djibouti, is in very poor condition and just half of the line is operational.

(Source: BBC News)

The Nigerian minister of transport Alhaji Ibrahim Bio said that the federal government has earmarked N20 billion (US$150 million) for the revival of the Nigerian railway system, after long years of neglect, and mismanagement of resources. Railways Africa reports that the immediate goal is to provide reliable railway services by the first quarter of 2010 by rehabilitating the old narrow gauge railway and refurbishing the wagons and coaches.

In a separate statement, the National Union of Road Transport Workers (NURTW) has urged the federal government to restore the rail system. NURTW President Gidado Hamman told the News Agency of Nigeria (NAN), cited by allafrica.com that the rail system was crucial to ``minimise the country's sole dependence on road transport''.

(Sources: Railways Africa; allafrica.com)

Seven people have died and many others were injured after a passenger train rammed into a stationary freight train in the Dodoma region of central Tanzania, on 29 March 2009, BBC News reported. Railway officials have launched an internal investigation, but police in Tanzania suspected that the crash was caused deliberately so that petrol could be stolen from the fuel tanks. Six Tanzania Railway Limited employees, including two stationmasters, have been arrested.

(Source: BBC News)

The Ministry of Works and Transport in Botswana has decided for safety reasons to suspend all passenger services provided by Botswana Railways (BR), effective from 1 April 2009. BR has been operating two pairs of daily passenger trains with a fleet of 46 air conditioned coaches, which were introduced into the market between 1991 and 1993, but have never been refurbished in the last 15 years, as planned. In addition to safety risks, passenger operations reported consistent annual losses of approximately US$4 million, which have been continuously subsidised by freight business.

Having been created in 1987, when the government of Botswana bought out the Botswana-based sections of the National Railways of Zimbabwe, BR transports bulk freight, parcels and passengers on a rail network of 888 km. The company has a US$75 million debt and needs serious investments for rolling stock and infrastructure.

(Source: Botswana Railways)

South African Transnet announced that a R80 billion (US$8.5 billion) capital programme is to be implemented as planned over the next five years, in spite of reduced volumes of transport due to "the marked slowdown in economic growth internationally and domestically". Expansion projects will account for approximately 60 per cent of the R57 billion (US$6 billion) that will be spent in the next three years.

Transnet Freight Rail will benefit from R24 billion (US$2.5 billion) for general freight business projects, and R11.1 billion (US$1.2 billion) for pipeline projects. A further R19 billion (US$2 billion) will be spent over the next five years to increase capacity on the coal and iron-ore lines, whilst a rise of 32 per cent in container handling will require a capital expenditure of R12,7 billion (US$1.35 billion).

(Source: Transnet)