Sunday, June 16, 2024

Kazungula bridge to set pace for local pension funds

Works and Transport Minister, Johnnie Swartz, and his Zambian counterpart received a project scope briefing on the Kazungula Bridge last week in Lusaka in a move that laid the foundation for the local pension fund to show their own muscle in one of the international private public partners exercise.
The┬á country’s biggest pension fund management company, Botswana Insurance Fund Management ( Bifm)ÔÇötogether with its┬á Zambian subsidiary, African Life ÔÇö have already expressed interest in helping to fund one of the┬á biggest projects┬á in the region that will facilitate┬á regional economic integration.

Speaking to Botswana journalists last month┬á in Lusaka, Bifm’s chief executive officer, Victor Senye, expressed interest in participating┬á in the building of the bridge in a bid to assist with ┬áregional trade development and increasing his shareholders’ value.

The Kazungula Bridge is aimed at connecting the southern African states with central and eastern African countries and was initially supposed to be a joint effort between Botswana, Zambia and Zimbabwe.

Notable ┬áat last week’s meeting was the absence of Zimbabwe which, despite signing a Memorandum of Understanding in October 2006, is no longer part of the bridge project.

The original plan was that the bridge would go past and cover a small portion of Zimbabwean territorial waters but that has since changed. The ministry’s spokesperson, Charles Keikotlhae, says that Zimbabwe has pulled out of the project and that the bridge will not pass through it.
Initially, Zimbabwe kicked up a fuss over plans to construct the bridge. It did not participate in the initial project feasibility study and later announced plans to make its own assessment. A long-running border dispute with Zambia also intensified during this phase, delaying the project.

Even allowing a more level-headed approach by Zimbabwe’s government of national unity, it is unlikely that Zimbabwe can rejoin the project because of its economic situation.┬á
That notwithstanding, Zimbabwe stands to benefit from the US$70 million bridge which will replace the ferry service between Botswana and Zambia.
The Zambezi River is a significant barrier of the movement of goods in Southern Africa. Virtually all traffic between South Africa, Botswana, Mozambique, Zimbabwe, Zambia and Congo, Tanzania and Malawi depends on the Kazungula ferry, which has a limited carrying capacity.

Keikotlhae says that the present capacity is about 30 trucks in each direction per day.
Forecasts predict that following the construction of the bridge by 2015, traffic crossing the Zambezi will grow between 1.75 times (low growth scenario) and 2.56 times (high growth scenario)
A Japanese-funded study has confirmed the technical and economic feasibility of the project. It estimated total projected revenues of US$360 million to US$605 million over a period of 30 years, resulting in a Financial Internal Rate of Return of between 5 percent and 14 percent depending on the toll rate.

The bridge will enhance transport operations along the regional north-south corridor, which links the mineral-rich regions of Zambia and the Democratic Republic of Congo to Botswana and the port of Durban in South Africa.

It is also expected that the two-lane bridge with a one-meter sidewalk, will promote local industry in Zambia and Botswana .

The project’s briefing memorandum states: “Reduction of local transportation costs will potentially lead to the reduction of consumer prices of agricultural products as well as development of socio-economic activities at community level. This increase in local economic activity can result in an increase of tax revenues for the local government.”
Keikotlhae says that, based on the findings and recommendations of the 2001 Japanese feasibility study, Egis Bceom International was appointed by the governments of Zambia and Botswana in July last year to complete the detail design and documentation necessary for the construction of the bridge and improving border facilities. Four months later, the scope of the project was changed to include realignment of the bridge and to investigate the inclusion of the railway line in the project, he adds.

The conditions for sharing use of the bridge would also be a tall order for a broke Zimbabwe. Prior to the completion of the bridge, a management committee for operating and maintenance of the bridge will be organised in both Botswana and Zambia. After completion, the operating and maintenance of the bridge will be carried out under each country’s committee. Each country will also be responsible for its approach roads, border facilities and customs.

Revenue from the toll bridge would be appropriated for refinancing the international and private financing loans to cover the maintenance of the bridge.


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