Thursday, October 22, 2020

Trans-Kalahari railway rebrands to an economic corridor to unlock economic potentials

The much anticipated Trans-Kalahari railway has rebranded from the original concept of a railway development project for coal to a regional corridor project designed to unlock the economic potential along the corridor for both the neighbouring Namibia and Botswana whilst contributing to wider social and economic progress.

Minister of Transport and Communications Kitso Mokaila made the revelation Monday insisting “the rebranding aims to go beyond the construction of the railway line for coal movement to include the development of various economic sectors such as mining, agriculture, maritime, transport logistics services, manufacturing industries, real estate development and so on.”

“Determining the extent to which a corridor approach is able to catalyse broader development is central to this study,” Mokaila added in Parliament referring to a Project Development Plan Study undertaken in February 2015 by a Consortium of Australian Firms led by Aurecon.

The study identified all risks and challenges associated with the project, the main challenge being the low price of coal which currently renders the project non-bankable.

The price of coal has drastically gone down from US $114/ ton in 2010 when the two Southern African neighbouring countries signed the Memorandum of Understanding to US $78/ ton in 2014 when the bilateral agreement was signed and further down to US $60/ ton in 2015.

“The study further developed mitigating factors to address the challenges and recommended that Governments should show commitment to the project while waiting for coal prices to go up by undertaking to resolve those project risks that are within control,” the Minister said, citing interventions such as optimising and purchasing the railway route alignment to dealing with cross border regulations and wildlife and stock management along the route alignment.

“The outcome of the Development Plan Study necessitated a rebranding of the project to readapt the original concept from it being a railway development project for coal export to it being a regional corridor development project that will unlock the economic potential along the corridor for both countries whilst contributing to wider social and economic progress,” Mokaila maintained.

Terms of reference and request for proposals for the study have been finalized with preparations ongoing to acquire approval by the two Governments to authorize invitation of bidders.

“The study is expected to take approximately 8 months,” the Minister reassured Parliament.

Conceptualised as a seamless 1500 km railway from Mmamabula coal fields in Botswana through a coal handling facility to the loading facilities at Walvis Bay port in Namibia, Trans-Kalahari railway’s anchor commodity is coal to be conveyed for export to the European markets.

The original price of the project then was estimated at $20billion.

Signed in March 2014, the bilateral agreement included the signing of Project Management Agreement in September 2014, the identification and refurbishment of buildings for PMA operation in March 2015 and the preparation and consideration of PMA policy manuals for office operation.

“All relevant authorities in Botswana have assessed and approved all policy manuals, approval of the same is awaited from Namibia,” Mokaila said, adding the finalization of resourcing of PMA was still in process.

While Namibia has seconded staff into the office, Botswana is still to do the same.

“Once the policy manuals have been approved and some officials have been seconded, the office will be commissioned and full operations will commence,” the Minister promised Parliament, denying claims Trans-Kalahari railway project has been abandoned as suggested by Member of Parliament for Takatokwane Ngaka Ngaka.

Concerned the project was taking a long time to be realized, the legislator posed a question in Parliament Monday.

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