Mozambique identifies firms to build $20b north-south railway line
The government in Maputo has identified two foreign firms that will build an ambitious 3,800-kilometre north-south rail link costing US$20 billion.
"It (the project) would cost about US$20 billion dollars to build the 3,800 kilometres of new railway to connect existing lines between the coast and the interior. The project would provide links to existing ports and those contemplated in the coming years", Mozambique’s Minister of Transport and Communications Carlos Mesquita told the Fifth Engineering Congress of Mozambique, which got underway in the capital on Wednesday.
According to Mesquita, the North-South Corridor project awaits completion of feasibility studies, whose results will be presented by the end of this year.
"Details on the start of construction of the line, costs, among other aspects, will be defined later this year, when the results of feasibility studies of the project are announced by the two companies that are candidates to carry out the works", he said.
Foreign mining companies are betting in Mozambique on one of the world’s largest untapped reserves of premium hard coking coal relatively close to Africa’s east coast, a prime location for feeding hungry markets in Asia.
But they have run into a problem facing many minerals exporters across Africa. “If you can’t take those goods to the market, you are wasting your time,” said Ibraimo Remane, chairman of the Order of Engineers of Mozambique, explaining the difficulties experienced by many such projects on the continent.
Tens of millions of dollars have poured into the only rail link between Mozambique’s remote coal fields and the port of Beira, its export gateway. But despite the upgrades, heavy rains flooded parts of the Sena line in February, paralysing exports.
Railway projects totalling more than $60 billion are proposed or under way in sub-Saharan Africa.
That estimate came from Terrapin, which is organizing Africa's largest Rail Conference and Exibition in South Africa next year.
According to Terrapinn, projects in Uganda, Namibia, Botswana, Mali, and Nigeria have the largest budgets, ranging from $8 billion up to nearly $14 billion each.
One massive project is a 3,000-kilometer rail line that will link Benin, Burkina Faso, Niger, Ivory Coast, Nigeria, Togo and Ghana.
These nations and mining companies that operate within them are funding the project as the mining industry seeks to increase mineral exports from 109,000 tonnes a year to 3.4 million tonnes in 2020, a 30-fold increase.
The lack of a cross-border rail network has made transport expensive, especially in land-locked countries such as Niger, which derives 11 percent of its gross domestic product from mining, and Burkina Faso, which derives 13 percent of GDP from mining.
The rail network also is expected to boost trade among the linked nations and drive economic development in other sectors.
Nigeria also has ambitious plans for domestic rail lines, including one linking Lagos and Kano and another between Lagos and Calabar along the coast. Both were designed to ease commuter congestion and facilitate transportation of goods.
However, plans were thrown into doubt in April when the Nigerian National Assembly removed $300 million in funding for the coastal project from the 2016 budget. Funding for a third line between Idu and Kaduna was severely reduced as well.
Meanwhile, Botswana and Namibia in southern Africa, are seeking private investment to build a 1,500-kilometer rail line that would transport coal from land-locked Botswana’s fields to Namibian ports on the Atlantic coast.
The project was estimated to cost $15 billion when first proposed in 2015 when the two countries staffed an office to begin looking into legal and cross-border issues that will have to be addressed.
In Mali, China has agreed to finance an overhaul of a rail line linking the capital of Bamako to Dakar in Senegal. Renovation of the 1,300-kilometer rail line will cost a total of $2.5 billion.
China will also train engineers and technicians and overhaul more than 20 train stations and domestic routes.