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Railways in Sub-Saharan Africa (SSA)

Republic of South Africa: 106 billion tkm

Is more than 6 times the rest of SSA combined

Average rail transport volume in SSA from 2001-2005 in billion

ton-kilometers (tkm) Railway lines in SSA

1

at the end of 2008 there were 47 operating railways in 32 countries in Africa (incl. privately owned mining lines): poor level of network connectivity

the total African rail network size is around 69,000 kilometers; 55,000 kilometers of it is currently being operated: low network density

in SSA, almost all of the network is single track,

almost all of network is Cape or Metric gauge (excl. Gabon).

70% of the network is less than 1000km from the coast.

almost all lines originate from a sea port.

2

Overview of Sub-Sahara African railways

Are Railways the weakest link in the transport chain?

Despite large investments, the revival of railways sector in sub-Saharan Africa is fragile:

Limited capacity

Poor reliability

Weak financial performance

Poor infrastructure density

Under-performing concessions

A room for improvement? freight passengers

Europe* - 28%

Africa - 2%

America - 33%

Asia and Oceania -

37%

Volume of freight transported by rail in 2010 [billion ton-km]

Europe* - 22%

Africa - 2% America - 1%

Asia and Oceania -

75%

Passengers transported by rail in 2010 [billion pass-km]

The rail challenges (1)

1. In the African context 2. In the design of railways projects

Low traffic volumes

Low productivity of assets

Low productivity of labor

Strong competition from road

Inadequate network connectivity

Underestimation of investment needs

Overestimation of traffic volumes

Undercapitalization

Inadequate human resources

Inadequate marketing approach to transport demand

Shortfall in transport integration (logistics) strategy

The rail challenges (2) 3. In Governance

Inadequate regulation

Inadequate concessions contract and fees

Unrealistic expectations

Shortfall in financial obligations

Shortfall in indicators and incentives for the economic sustainability of projects

Inconsistencies or weaknesses in transport policies

A way out? : Adjust the design of rail projects to market demand

Focus on delivering predictable rail services. Create value in the logistics chain, investing in

intermodal operations Create sustainability : long term maintenance of

infrastructure and reliability of operations. Position rail prices in a competitive environment. Support & strengthen rail regulation to guarantee

open-access and competition in transport operations.

A way out ? Prioritize & Focus Investments

1. Value for money, affordable and sustainable investment levels need to prioritize and target to minimize infrastructure costs

and operating cots

need to adjust investment to market potential

2. Focus on improving existing operating standards/costs, not on new, expensive or non-proof schemes labor productivity

transport productivity

maintenance programs

A way out? Develop business-oriented models for rail projects

Re-assessing transport market High end profitable segments : containerized goods, minerals Low end non solvable segments : non bulk-non container general

cargo, passengers

Re-assessing rail operations and optimize High efficiency, low cost: containerized goods, minerals Low efficiency, low cost: bulk freight, long distance Low efficiency, low revenues and high costs: non bulk/local freight,

passengers

Re-assessing the position of the rail in the transport sector: an element of the logistics chain for businesses and industries an element of the intermodal transport system for freight an element of social and human development for passengers

services

The case for Tanzania: main issues

Inadequate marketing approach to transport demand (products & clients)

Inadequate logistics connectivity (port & platform)

Poor condition of the railways infrastructure

Inconsistencies or weaknesses in transport policies in terms of access to the infrastructure and the logistic integration.

The case for Tanzania: integrated logistics?

Project objective: rehabilitating the infrastructure to create reliable block train operations.

Provide intermodal integration tools (port and platform).

Develop a rail product that answer market demand for containerized cargo (shippers and freight forwarders).

Align the project to BRN objectives to create synergies and harmonize investments and funding.

Tanzania Intermodal and Rail Project (TIRP) : key objectives

Rehabilitate existing infrastructure and upgrade its capacity to 25 t/axle;

Reconstruct the logistic chain and upgrade rail-port and rail-road connections;

Set-up performance indicators for rail and logistics operations.

Strengthen institutional capacity to increase sector performance and implement competitive framework.

World Bank : key strategic path for future rail projects

Ensure rail infrastructure is fully integrated to road and maritime modes;

Ensure business model is coherent with accessible market segments (incl. mining) and adjust forecasts to realistic level;

Link funding and project implementation to performance indicators for the entire logistics chain.

Strengthen institutional capacity to increase sector performance and implement competitive framework.