An effective railway transport system is vital to improving Africa's trade performance.  In the COMESA-EAC-SADC regions of Eastern and Southern Africa the road system, even if improved considerably, cannot meet transport needs alone - especially if the region is to trade its way to the levels of economic growth necessary to meet its Millennium Development Goals (MDGs) towards sustainable poverty reduction and wealth creation.

TMSA is supporting the improvement of the railway transport system in the COMESA-EAC-SADC region.  TMSA has commissioned a study on railway concessioning which will provide guidance on the way forward to developing the region's railway transport system into a functioning transport network that is able to take significantly higher levels of goods traffic efficiently and at prices that are competitive with roads.

TMSA has also completed a railway track assessment, and detailed information about the state of railway tracks in the region are now available (for more information, visit the TMSA GIS at www.tmsagis.co.za).  Furthermore, TMSA is supporting TAZARA in the development of their strategic and business plan with the objective to transform TAZARA into an efficient and cost effective African railway transport company that carries over two million tons per year.

Projects

Railway Concessions and Track Assessment

Most of the regional railway systems in Eastern and Southern Africa are not functioning as they should, in virtually all respects.  Their reliability is extremely poor; there are high accident and failure rates; operating costs are high and railways are making financial losses and, when compared to roads, the volume of goods transported are low.  Only about 5% of regional traffic volumes (excluding South Africa) travel by rail.  It can therefore safely be said that, outside of South Africa, the railway systems in Eastern and Southern Africa are, in their present state and condition, not operationally sustainable.

There is an urgent need to chart the way forward and develop the region's railway system into a functioning transport network that is able to take significantly higher levels of goods traffic efficiently and at prices that are competitive with roads.

TMSA is supporting the revitalization of the region's rail by preparing a paper revamping the eastern and southern African railways that will be discussed by the region's stakeholders and inform the way forward.  TMSA has also completed a track assessment of the region's railways and has plotted this information onto the GIS map at www.tmsagis.co.za

TAZARA Strategic and Business Plan Development

TMSA is in the process of assisting TAZARA to prepare a strategic and business plan.

The performance of TAZARA and the volumes of freight carried have remained fairly static over the past 15 years, and TAZARA has not been able to take advantage of the increased trade volumes associated with the commodity boom which has driven the expansion of mining in the Copperbelt.

TAZARA is also suffering from severe operating capacity constraints, resulting primarily from very low mainline locomotive availability and a severe shortage of working capital. Poor reliability and low asset utilisation prevent TAZARA from attracting new customers and increased freight volumes without a substantial injection of working capital.

In recent years, TAZARA has carried between 0.450 mtpa and 0.6mtpa of freight, of which about 75% has been made up of transit traffic to and from Zambia, DR Congo and northern Malawi via Mbeya. The maximum volume carried was 1.2 mtpa in 1993 when there was an urgent regional demand for maize imports (drought relief). Since then the freight volume has fluctuated around the present low level of 0.5mtpa, which does not generate enough income to cover the full costs of operations.

Consequently, TAZARA has been unable to fund the replacement and maintenance of both equipment and track infrastructure, with deferred maintenance leading to poor reliability and frequent breakdowns, which in turn affects the competitiveness of the service and price which can be charged to customers.

The upper limit of freight pricing is determined by the alternative competitive routes and the road services on the Dar es Salaam corridor. In other words, if TAZARA could perform better in respect of reliability and consistent transit times, then the demand for freight services would increase, and customers would likely be willing to accept a higher rail tariff. Expansion of the TAZARA market is linked to increasing the capacity of the system for a given performance benchmark.

The prospects for increasing the freight volumes on TAZARA, necessary to achieve financially sustainable operations, are mainly linked to the Zambian and Southern DR Congo market. This will entail capturing freight which is presently carried by road on the Dar es Salaam corridor, and also targeting the Copperbelt imports and exports currently routed through the ports of Beira, Maputo and Durban. This inevitably means that TAZARA will have to target the inter-modal freight sector (containers), which is not an important part of its present freight profile. However, it is clear that TAZARA does not presently have the necessary capacity or funding to develop this market. This is the key challenge TMSA is hoping to help address through the development of a strategic and business plan.

Railways

Early Closure of TMSA Programme: The Secretary of State of the UK’s Department for International Development (DFID) has decided to terminate its financial contribution to TradeMark Southern Africa (TMSA), as announced on 4 December 2013. As DFID is the sole financier of the TMSA programme of support to the COMESA-EAC-SADC Tripartite, TMSA will officially be closed from 17 March 2014 instead of 31 October 2014. For more information about the TMSA closure, and for a summary of some of the more notable successes of the Tripartite achieved with TMSA support, please click here