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UNLOCKING LANDLOCKED REGIONS

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Presentation on theme: "UNLOCKING LANDLOCKED REGIONS"— Presentation transcript:

1 UNLOCKING LANDLOCKED REGIONS
MAPUTO CORRIDOR LOGISTICS INITIATIVE THE MAPUTO CORRIDOR UNLOCKING LANDLOCKED REGIONS

2 OUTLINE OF THE PRESENTATION
The African Global Trade Picture The Maputo Transport Corridor The Maputo Corridor Logistics Initiative Infrastructure Investments on the Maputo Corridor OUTLINE OF THE PRESENTATION

3 THE AFRICAN GLOBAL TRADE PICTURE
Logistics costs in Africa are the highest in the world Building infrastructure to link countries and removing trade barriers between countries will reduce costs Soft infrastructure is often lacking - a significant barrier to trade Institutional and legal frameworks need to be in place to allow the development of regional projects WEF Press Release THE AFRICAN GLOBAL TRADE PICTURE

4 THE AFRICAN GLOBAL TRADE PICTURE
The governments of the WORLD can no longer provide the necessary infrastructure unaided. There HAVE to be Public Private Partnerships. Source: OECD World Bank determined African backlogs are: 50% energy; 25% transport; 15% ICT; 10% water and sanitation. Success in developing projects in Africa lies in best harnessing the benefits of both public and private sectors in developing its resources Peter Copley Pr Eng THE AFRICAN GLOBAL TRADE PICTURE

5 THE AFRICAN GLOBAL TRADE PICTURE
Costs of transport in Southern Africa Some are surprised to learn that transport costs in South Africa are approximately equal to the World’s average transport costs But once crossing borders come into the question, costs go up by a factor of between 4 and 8 (Source: Dr Gael Raballand’s doctoral thesis under the auspices of the World Bank) Why? Because we don’t think as a region. Peter Copley Pr Eng THE AFRICAN GLOBAL TRADE PICTURE

6 THE MAPUTO TRANSPORT CORRIDOR
Road – 581kms Rail – 590kms THE MAPUTO TRANSPORT CORRIDOR

7 for trade and investment, and is a catalyst for
A Transport Corridor where Freight Logistics is creating an enabling environment for trade and investment, and is a catalyst for regional integration and cooperation MAPUTO TRANSPORT CORRIDOR

8 MAPUTO TRANSPORT CORRIDOR
A economic corridor linking the economic hub of South Africa to the Port of Maputo Launched as a tri-lateral initiative between South Africa, Mozambique and Swaziland in the 1990’s The initiative has seen massive investment (>$5Bn) in transport infrastructure and projects over the last decade – road rail, ports, communication There has also been significant economic investment Socio-economic impact has been independently evaluated and demonstrated to be significant The initiative therefore has been and continues to be considered one of the more successful corridor development programmes in the region MAPUTO TRANSPORT CORRIDOR

9 MAPUTO TRANSPORT CORRIDOR
The Maputo Transport Corridor consists of 4 key nodes: Road Rail Border Post Port and Terminals MAPUTO TRANSPORT CORRIDOR

10 MAPUTO TRANSPORT CORRIDOR
In 2003 – The transport corridor was still constrained by Major Constraints Lack of safe rail line and much needed rail capacity and service Border post – limited commercial cargo clearing hours, -policies ; processes and procedures and lack of understanding for need of OSBP Lack of container shipping lines calling port of Maputo Overall lack of promotion of PPP on Transport corridor, knowledge and information of future port development and potential of transport corridor capacity Lack of a Corridor Institutional Framework MAPUTO TRANSPORT CORRIDOR

11 The Institutional Framework on the Maputo Corridor
MCLI was established as a non profit company, established with the objective of revitalising the transport route and the removal of bottlenecks and constraints to trade multi-lateral, multi-stakeholder membership organisation with a 130 members from SA, Mozambique, Swaziland It operates within the framework of SADC, NEPAD and AU transport corridor development policy and has its emphasis on the promotion of cross border trade and investment and regional integration The Institutional Framework on the Maputo Corridor MAPUTO CORRIDOR LOGISTICS INITIATIVE

12 MAPUTO CORRIDOR LOGISTICS INITIATIVE
Integrate - Participation in key National and Regional bodies and forums Coordinate and Communicate - disseminate information and research on the Maputo Corridor Facilitate - Act as a platform for engagement / interface between the public and private sector stakeholders to resolve constraints Promote - the Maputo Corridor and market the strategic benefits and opportunities of the Corridor MCLI’s Role MAPUTO CORRIDOR LOGISTICS INITIATIVE

13 MAPUTO CORRIDOR LOGISTICS INITIATIVE
Resolving the Constraints: The interface between the public and private sector and to address issues jointly Facilitate, Coordinate, Integrate, Communicate Utilize the Working Group mechanism to engage stakeholders and resolve operational issues Leverage the arsenal of top level relationships within government and the private sector to ensure maximum benefit for corridor users MCLI’s Role MAPUTO CORRIDOR LOGISTICS INITIATIVE

14 MCLI – What Has Worked Successful transport corridor
Infrastructure driving regional integration and development agenda Effective PPP’s delivering infrastructure Continuing political will in the region Acknowledged on African continent as model corridor institution Increased freight throughputs on the corridor Considerable economic growth benefits and investment

15 IMPORTANCE OF TRANSPORT CORRIDORS
Transport Corridors provide industry with global access to markets. The MAPUTO CORRIDOR is a true transportation corridor linking South Africa, Swaziland and southern Mozambique by 4 key elements: Road Rail Border Posts Ports & Terminals The Maputo Corridor opens up South African industries to access export markets to Africa and the Far East IMPORTANCE OF TRANSPORT CORRIDORS

16 Main import commodities – fuel, fruit, steel tubes and pipes
January to December total trade between SA and Mozambique totalled R29,7 billion Main import commodities – fuel, fruit, steel tubes and pipes Main export commodities – coal, ferrochrome, magnetite, sugar, steel, maize 1.146 million people vehicles (2011) trucks (2011) SARS THE TRADE FIGURES

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18 THE MAPUTO CORRIDOR Road – 581kms Rail – 590kms
Re-established proven transportation route for regional trade to international markets for SA, Zimbabwe, Swaziland, Botswana through Mozambique. THE MAPUTO CORRIDOR

19 THE MAPUTO CORRIDOR

20 THE SADC TRANSPORT CORRIDORS

21 THE STRATEGIC LOCATION OF PORT MAPUTO
Maputo is a key node in providing access to regional commodities Key markets are India and China Port Maputo Compliments South African Ports in accommodating regional demand in a multi-purpose port THE STRATEGIC LOCATION OF PORT MAPUTO

22 ROAD N4/EN4 HIGHWAY TOLL ROAD INFRASTRUCTURE ON THE MAPUTO CORRIDOR
Benchmark Cross Border PPP signed by SA and Mozambique with private sector consortium 30 year B-O-T concession R4billion since 2000 R3 billion in next 25 years Traffic volume increase 7% per annum Truck traffic increase 11% per annum INFRASTRUCTURE ON THE MAPUTO CORRIDOR

23 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
ROAD INFRASTRUCTURE: Traffic volume increases by 7% per annum Heavy vehicle traffic is growing at an average of 10-11% per annum Traffic between Matola and Maputo has increased way ahead of original projection – on a peak day Maputo Plaza averages thousand vehicles per day INFRASTRUCTURE ON THE MAPUTO CORRIDOR

24 WHY THE ANOMALY

25 WHY THE ANOMALY

26 RAIL – Rehabilitation of the Ressano Garcia/Maputo Railway Line
INVESTMENT: USD80 million Line Rolling Stock CAPACITY 2m tonnes in 2009 92kms rehabilitation completed end 2008 Good cooperation between TFR, SR, CFM Focus on TRANSPORT CORRIDOR because of investment in transport infrastructure INFRASTRUCTURE ON THE MAPUTO CORRIDOR

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31 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
RAIL INFRASTRUCTURE: In the last 2-4 years CFM invested USD20 million on the rehabilitation of the RG Line. Over the next 3 years CFM will invest between USD million on upgrading and modernization of the line, which includes duplication, electrification, increase bridges capacity, signalling and telecommunications. CFM Ports & Railways INFRASTRUCTURE ON THE MAPUTO CORRIDOR

32 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
RAIL INFRASTRUCTURE: 2012 Capacity: 48 trains per week on the RG Line RG Line was 4.71MTPA 2013 Capacity: 52 trains per week on the RG Line 2013: Rail Traffic on RG Line 8.1MTPA Wagons/train: Magnetite: 60 wagons x 60 net/tons Coal: 50 wagons x 58 net/tons Others: 40 wagons x 40 net/tons CFM Ports & Railways INFRASTRUCTURE ON THE MAPUTO CORRIDOR

33 INFRASTRUCTURE ON THE MAPUTO CORRIDOR

34 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
Operations on the Goba Route to Maputo: Distance: 226kms Max Speed Allowed: 60km/h for SR and 50km/h for CFM Length of Trains: 40 wagons for vacuum trains and 50 wagons for airbrake trains. Utilization of the Goba Route: Sugar Iron Ore Sugar and Iron Ore are only utilising 50% of the available capacity on the Goba Route Swaziland Railway INFRASTRUCTURE ON THE MAPUTO CORRIDOR

35 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
RAIL INFRASTRUCTURE: R17billion to be invested by TFR and SwaziRail for the 146km “SwaziLink” railway line to Maputo. This line will create an additional 15MTPA to the Waterberg and Eskom Road to Rail Migration Programme Transnet Freight Rail “SwaziLink” Press Release INFRASTRUCTURE ON THE MAPUTO CORRIDOR

36 LEBOMBO / RESSANO GARCIA BORDER POSTS
With the volumes of rail friendly cargo currently being moved on road set to increase the lack of rail capacity is still one of the major constraining factors on our corridor LEBOMBO / RESSANO GARCIA BORDER POSTS

37 12 hour operation Severe Congestion Substantial delays Inefficiencies Added logistics costs

38 LEBOMBO / RESSANO GARCIA BORDER POSTS
Agreement between the Governments of Mozambique and South Africa on a One Stop Border Control Post on the Mozambique-South African Border on 17 September 2007 – Target completion was May 2010. The initial budget after design and costing (R1.9 billion) far exceeded available funding and is not possible under current economic climate. November 2009 – Above agreement only ratified by Mozambique Government and still waiting on ratification by SA Government. June 2012 – SARS Commissioner presents the OSBP case to the Standing Committee on Finance in the South African Parliament Still not implemented despite the massive trajectory in growth Still a continuous struggle to have the private sector included in planning process and to be continuously involved in a stakeholder engagement process and regular communication LEBOMBO / RESSANO GARCIA BORDER POSTS

39 BOTTOM LINE = HIGHER COST OF DOING BUSINESS
The Impact of the Delay: The economic impact of the delay in the Ratification of the Bilateral Agreement is far reaching: dry port infrastructure development investors cannot effectively plan and implement service providers such as clearing and forwarding agents, transporters, etc are restricted in development Port investment affected Port volumes affected Growth of transit cargo affected BOTTOM LINE = HIGHER COST OF DOING BUSINESS LEBOMBO / RESSANO GARCIA BORDER POSTS

40 LEBOMBO/RESSANO GARCIA BORDER POST

41 LEBOMBO BORDER POST DECEMBER 2005

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44 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
BORDER POST: Freight bypass road opened 11 June 2010 Pedestrian facility opened March 2013 With the new infrastructure that has been pumped into the border post we no longer have cargo, passengers and pedestrians moving through the same little border post INFRASTRUCTURE ON THE MAPUTO CORRIDOR

45 PEDESTRIAN FACILITY OPENED FULLY OPERATIONAL
FREIGHT BYPASS ROAD OPENED JUNE 2010 CLEARING KM4 PEDESTRIAN FACILITY OPENED FULLY OPERATIONAL 18 hour operation 24 hours at peak periods Cars, tourist, passengers Ressano Garcia Freight, cargo Pedestrians Pedestrians Freight, cargo Lebombo Cars, tourist, passengers

46 Lebombo/Ressano Garcia Border Post
1998– tons through border post - 2007 – 2.25million tons In the 2 years between 2005 and 2007 43% increase in passengers 73% increase in cars and busses 65% increase in the total number of vehicles that crossed the border 1,1 million passengers in Dec 2007 alone Design capacity maximum 8000 per day Focus on TRANSPORT CORRIDOR because of investment in transport infrastructure

47 FREIGHT BYPASS ROAD OPENED 11 JUNE 2010

48 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
BORDER POST: Between 600 and 800 bulk trucks per day through LRG Clearing time between 4 and 8 mins due to the improved SARS Customs Modernisation System. Some C&F agents have it down to between 2 and 3 mins Alfandega recently introduced the new SeW system at km4, we have been experiencing delays and congestion during peak time most importantly due to the reduced clearance times at km4 not corresponding to that of SA. Teething delays are also experienced due to a new system and people having to get used to the new system and new processes. INFRASTRUCTURE ON THE MAPUTO CORRIDOR

49 LEBOMBO / RESSANO GARCIA BORDER POSTS
The Impact of the Delay at km4: The economic impact of the delay from the reduced operational hours at km4: $500/day per truck = 300+ Jobs to be lost Knock-on effect: Port volumes affected, cargo does not reach ships in time Multi-Million Rand contracts are breached service providers such as clearing and forwarding agents & transporters have massive loss in revenue which cannot be recovered Economical viability of the corridor is lost BOTTOM LINE: Jobs will be LOST Loss of revenue to the RSA and MOZ economies LEBOMBO / RESSANO GARCIA BORDER POSTS

50 LEBOMBO / RESSANO GARCIA BORDER POSTS
Priority Changes: Prompt ratification of bi-lateral agreement by SA cabinet to ensure the co-hosting arrangements are “legalised” and project can continue. Immediate decongestion of the Border Post by extending operational hours on a continuous basis to 24 hours per day and not only over festive periods Immediate joint processing of commercial freight vehicles by both countries customs and immigration to ensure trucks do not stop inside congested frontier area. Extension of clearing times at km4 to those of South Africa which will help with the reduction of delays at km4 Joint Pedestrian Facility with access from both Mozambique and South Africa outside the current port area to be managed properly LEBOMBO / RESSANO GARCIA BORDER POSTS

51 HIGHEST PRIORITY IS THE 24 HOUR ONE STOP BORDER POST
MANY CHALLENGES STILL NEED TO BE ADDRESSED HIGHEST PRIORITY IS THE 24 HOUR ONE STOP BORDER POST LEBOMBO / RESSANO GARCIA BORDER POSTS

52 Shareholding since 2008 51 % 49 %

53 Focus on TRANSPORT CORRIDOR because of investment in transport infrastructure

54 Focus on TRANSPORT CORRIDOR because of investment in transport infrastructure

55 Port Maputo – A Multi-Purpose Port
TERMINALS: Container Terminal – DPW Citrus - FPT Bulk Sugar - STAM Car Terminal – Grindrod Terminals Mozambique Molasses - Agrimol Ferro Metals - MPDC Bagged Sugar – EDF MAN Bulk Liquids – Maputo Liquid Storage Terminal Coal – Grindrod Terminals Mozambique Coastal Terminal – Terminal Cabotagem de Moz PORT MAPUTO

56 PORT MAPUTO

57 THE MAPUTO CORRIDOR

58 THE PORT MASTER PLAN $300 million invested in Port Maputo since 2002
Port Master plan envisages a further capital investment in the port of USD $1,2 billion in the next 20 years Concession extended to 2033 with an option to extend for a further 10 years to 2043 Increased throughput from current 17 Million tons to 48 million tons Ongoing Channel dredging programme to accommodate Panamax and post Panamax vessels THE PORT MASTER PLAN

59 ROADMAP TO DELIVER THE PORT MASTER PLAN

60 ROADMAP TO DELIVER THE PORT MASTER PLAN

61 ROADMAP TO DELIVER THE PORT MASTER PLAN

62 ROADMAP TO DELIVER THE PORT MASTER PLAN

63 ROADMAP TO DELIVER THE PORT MASTER PLAN

64 ROADMAP TO DELIVER THE PORT MASTER PLAN

65 Terminal de Carvão da Matola
Situated on the Catembe Channel a few kilometres upriver from the City of Maputo in Mozambique,

66 Terminal de Carvão da Matola
Own Berth, ship loader, stockpile area, rail tipplers, stacker/ Reclaimer and conveyor handling system Required extensive refurbishment Capacity of tons per annum Refurbishment of rail yard, Tipplers, Conveyors, Stacker/ Reclaimer Re-instatement of centre line conveyor Locomotives and tractors introduced tons per annum Concession extended to 2043 in 2010 New Stacker/ Reclaimer New Ship loader Channel dredged to 11m draft Ability to load up to dwt tons per annum capacity Additional Berth New Ship Loader Additional stockpile areas Additional Stacker Reclaimers Up to storage area tons capacity Before Phase 3 Completed Jan 2011 Phase 1 & 2 development Plans for Phase 4

67 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
Matola Coal Terminal: Current TCM Terminal Capacity is 6MT/annum Phase 3.5 Expansion Increase annual terminal capacity to 7.3MT Capacity for 5.2MT/annum for coal Capacity for 2.1MT/annum for magnetite Phase 3.5 due for completion in September 2013 Grindrod Terminals INFRASTRUCTURE ON THE MAPUTO CORRIDOR

68 New Coal Terminal Additional Berth, and ship loader

69 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
Matola Coal Terminal: Phase 4 Expansion TCM Phase 4 Coal export terminal to be constructed adjacent and in isolation to existing terminal Phase 4A requirements: Terminal throughput of 10MTPA with five grades of Coal Additional berth for Panamax vessels Channel dredge to accommodate fully laden Panamax vessels Grindrod Terminals INFRASTRUCTURE ON THE MAPUTO CORRIDOR

70 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
Matola Coal Terminal: Phase 4 Expansion Phase 4B requirements: Terminal reaches capacity of 20MTPA with ten grades of coal Additional berth for Panamax vessels Existing TCM will be converted to Magnetite and Iron Ore terminal with a capacity of 10 to 12MTPA Grindrod Terminals INFRASTRUCTURE ON THE MAPUTO CORRIDOR

71 INFRASTRUCTURE ON THE MAPUTO CORRIDOR
Matola Coal Terminal: Phase 4 Expansion The Phase 4 Terminal expansion has identified the following target market for the utilisation of the facility: South Africa Coal – 12Mt from Witbank / Mpumalanga Coalfields Magnetite – 10Mt through the Ressano Garcia line Zimbabwe / Botswana Coal – 8Mt through the Chicualacuala line Grindrod Terminals INFRASTRUCTURE ON THE MAPUTO CORRIDOR

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86 Corridors need THE MAPUTO CORRIDOR √ good infrastructure,
√ good systems and procedures, √ good information √ institutional mechanism to be the facilitator and interface √ cooperation between the public and private sector to ensure sustainable success. THE MAPUTO CORRIDOR TICKS ALL THESE BOXES THE MAPUTO CORRIDOR

87 A LONG TERM VISION AND STRATEGY THE LONG TERM VISION IS CRUCIAL
A shift in the mind set of politicians who tend to favour sovereign issues over regional priorities and who tend to plan according to election cycles. This is out of alignment with the long-term view required to drive a slow process such as regional integration and to develop crucial infrastructure that often requires planning to be done on a 10- to 20-year scale. WEF Press Release THE LONG TERM VISION IS CRUCIAL

88 Efficient corridors can have a significant impact on the competitiveness of local business and regional economies Can provide a measure of predictability, reliability and efficiency crucial to trade and logistics supply chains, Key to providing access to markets.   Ports need to look at the bigger picture, and see themselves as integral to the supply chain and not just the beginning or end results IN CONCLUSION

89 ACKNOWLEDGEMENTS CFM Ports & Railways Grindrod Terminals Mozambique
Maputo Port Development Company OECD Peter Copley SADC, EAC and COMESA South African Revenue Service Swaziland Railway TRAC N4 Transnet Freight Rail WEF Press Release World Bank ACKNOWLEDGEMENTS

90 THANK YOU ivor.masher@mcli.co.za www.mcli.co.za +27 13 755 6025


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