Medium term: improve service
Long term: extend network
CPCS Transcom, an international infrastructure development firm, has been looking at the future of the Zimbabwe railway sector in order to come up with sustainable solutions for revitalizing its operations.
Glory Jonga, Vice President of CPCS Transcom International, conducted a study entitled: The future and funding of the Zimbabwe railway sector: sustainable solutions. It focused on Zimbabwe rail infrastructure needs, bottlenecks, strategies, and public-private participation. It has also provided examples of funding initiatives.
CPCS is a group of Canadian consultants who specialize in private investment in infrastructure. The firm began operations in 1969 as a subsidiary of Canadian Pacific Railways and has experience in more than 90 countries, according to Jonga.
Some of the firm's major accomplishments include enabling private investment in nine railway systems in Africa, seven of which are now complete with two ongoing. The firm is also the lead consultant on Trans Kalahari Railway study.
Bottlenecks
Jonga said transportation infrastructure in Zimbabwe was among the main bottlenecks to productivity, growth and competitiveness.
"The impact is particularly severe for landlocked countries like Zimbabwe, Zambia, Malawi and Botswana," he added, saying that efficient infrastructure and associated logistical services were critical to attracting Foreign Direct Investment.
In terms of the general strategy for the Zimbabwean railway, Jonga said the rail network should be expanded where feasible to meet the needs of the growing economy of the SADC region.
The short term strategy, according to Jonga, is to restore acceptable levels of service on the trunk lines through PPPs. His medium term strategy involves improving the level of service on the regional trunk lines and to carry out feasibility studies for the
other line extensions and missing links. The long term strategy involves achieving best in class performance on the trunk lines, successful commercial operations on inter regional links and to further extend the network.
PPP potential
PPPs mean that the government retains ownership of infrastructure assets, but moveable equipment, such as wagons and locomotives, can be sold or leased to the concessionaire.
"Payment is normally a combination of initial lump sum and an annual lease payment as well as an annual fee based on revenue or profit levels," Jonga said.
On the open access (Multiple operators), the rail is divided vertically into different functions, namely operations, maintenance and infrastructure, and each function can be a concession.
"The separation of infrastructure and operations allows the creation of multiple operators who share the use of the track," Jonga says.
He says the advantages of the open access are an opportunity to introduce competitive rail operators, where transport competition does not exist. Some of the disadvantages of the open access outlined by Jonga include significant regulatory involvement required by the government of Zimbabwe with respect to relationship between track authority and operators. He said it was unattractive to potential operators due to increased competition, and because their interests were adverse to track authority.
Privatisation
On full privatisation, Jonga said all assets, including the infrastructure, land, building and equipment, would be sold through public listing to a group of investors or a single investor. The advantage of full privatisation is an opportunity for the government of Zimbabwe to divest of the NRZ and would result in elimination of all future financial obligations.
However, Jonga says the disadvantages of full privatization are a requirement of substantial political will and support. He says it results in significant loss of public control over rail infrastructure and operational development.
Jonga says that while opportunities for commodity and manufactured goods were slowing in Zimbabwe, there were strong opportunities for Canadian exports in development of infrastructure. He said many of these opportunities needed Export Development Canada support.
Post published in: Business