Railways Africa Issue 4:2017 by Railways Africa

INFRASTRUCTURE LOGISTICS MINING OPERATORS PERWAY ROLLING STOCK ISSUE 4:2017

Dangote Cement Senegal And Dakar-Bamako Ferroviaire (DBF)

Inland Intermodal Terminals And Freight Logistics Hubs

Zambia's Rail System Regaining Credibility

The Nigerian GE Railway Concession

T H E A U T H O R I TAT I V E A F R I C A N R A I LWAY P U B L I C AT I O N

L AS S OCIATIO NC

EN ER

02 – 06 September 2017

U HA

CAPE TOWN

TIO ERNA NAL HE AV INT

IHHA 2017

11th International Heavy Haul Association Conference 2017 Theme: “Advancing Heavy Haul Technologies and Operations in a Changing World” 2 – 6 September 2017, Cape Town, South Africa The conference is being hosted by the International Heavy Haul Association (IHHA), in partnership with Transnet and the South African Heavy Haul Association (SAHHA). It will include presentations of technical papers in research and development areas such as Rolling Stock, Railway Infrastructure and Operations. A two day Technical Track Workshop precedes the conference. CONFERENCE TOPICS • • • • • •

Vehicle Track Systems Track Bridges & Tunnels Operations Rolling Stock Motive Power, Traction and Energy Efficiency

Keynote speakers include: • Mr. Siyabonga Gama, Group CEO, Transnet SOC Limited • Ms Cheryl Martin, World Economic Forum (WEF) Topic: Impact of the 4th Industrial/technological revolution on Railways A Trade Exhibition will run concurrently with the 11th International Heavy Haul Association Conference 2017. This is an ideal opportunity for companies and institutions wishing to showcase or introduce your brand, products and services to the international heavy haul community. Sponsorship opportunities and exhibition space is still available. For more information, contact Riedwaan Jacobs at info@ihha2017.co.za, +27 21 836 8315 Register online www.ihha2017.co.za, early bird registration close 30 June 2017. @IHHAC17

@ihhac2017

#IHHAC17

Mr. Siyabonga Gama

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RAILWAYS AFRICA

RAILWAYS AFRICA PUBLISHER Rail Link Communications cc

This Issue: Highlights FEATURE

FEATURE

SHELTAM'S NEXT CHAPTER

ZAMBIA’S RAIL SYSTEM REGAINING CREDIBILITY

FEATURE INLAND INTERMODAL TERMINALS AND FREIGHT LOGISTICS HUBS

COMPANY NEWS LUCCHINI RS INVESTS R200 MILLION IN SA'S FIRST FORGED WHEEL MANUFACTURING PLANT

FEEDBACK SARA REPORT BACK

COMPANY NEWS AFRICA’S LARGEST CRANKSHAFT POLISHER AT METRIC

FEATURE FREIGHT TRANSPORT IN GAUTENG MAY BOOST EMPLOYMENT

AFRICA UPDATE UPGRADE OF SITARAIL

EDITOR Phillippa Dean DESIGN and LAYOUT Craig Dean WEBSITE Craig Dean Michael Lotriet COPY newsdesk@railwaysafrica.com ADVERTISING Helen Bennetts +27 (0)10 900 4881 helen@railwaysafrica.com www.railwaysafrica.com/ rates-and-advertising SUBSCRIPTIONS www.railwaysafrica.com/ subscribe

ISSN 1029 - 2756 Rail Link Communications cc 13 Sixth Street Melville Gauteng 2092 South Africa

Tel: +27 (0)10 900 4881

stationmaster@railwaysafrica.com The copyright on all material in this magazine is expressly reserved and vested in Rail Link Communications cc, unless otherwise stated. No material may be reproduced in any form, in part or in whole, without the permission of the publishers. Please note that the opinions expressed in this magazine are not necessarily those of the publishers of Rail Link Communications cc unless otherwise stated. While precautions have been taken to ensure the accuracy of the information, neither the Editor, Publisher or Contributors can be held liable for any inaccuracies or damages that may arise. E&OE.

GAUTENG 25-YEAR INTEGRATED TRANSPORT MASTER PLAN

25-YEAR INTEGRATED TRANSPORT MASTER PLAN November 2013

Final

FEATURE THE NIGERIAN GE RAILWAY CONCESSION

COMPANY NEWS TRANSNET DELIVERS POSITIVE PERFORMANCE

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Tenders, RFP's, RFQ's, EOI Email notification of new Tenders, RFP's, RFQ's, EOI Online access to featured articles Rail Project Insight on the African Continent Access to view and download the digital edition Access to all news articles Weekly Email News Alert Monthly Email Digest Monthly recurring payment and per an annum payment options available. Find out more at:

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Rehabilitation, Maintenance and Emergencies Rehabilitation, Maintenance and Emergencies (RME) is the Specialist Construction Unit of Transnet. RME is responsible for the maintenance, rehabilitation and construction of port and rail infrastructure. RME executes, maintains and constructs projects for the external market. External customers are TFR customers with private sidings, Eskom, Municipalities, SADC countries, Gautrain and Prasa. RME has a staff complement of 4,000 employees and an annual turnover is R1.5bn. RME offers experienced professionals in Civil Engineering, Electrical Engineering, Mechanical Engineering, Project Management, Costing and Construction. RME have completed over 100 projects in South Africa and the SADC region.

CIVIL ENGINEERING WORKS Concrete Structures:

Refurbishment or construction of bridges, culverts, inspection pits, track slabs, crane beams, paving slabs, floors and foundations. Resealing of tunnels and concrete drains.

Steel Structures:

Refurbishment or construction of bridges, sheds, warehouses and microwave masts.

Services:

Refurbishment or construction of storm water reticulation, sewer reticulation, fire hydrant installations, pipe and chamber systems and sub-surface drainage.

Buildings:

Refurbishment or construction of offices, residential houses, relay rooms, sub-stations, mess and ablution facilities.

Earthworks:

ELECTRICAL ENGINEERING WORKS Construction And Upgrading Of Overhead Traction Equipment (OHTE) And Related Electrical Infrastructure: 25KV AC electrification system, 3KV DC electrification system, 50KV AC electrification system, extension of loops, installation of Motor Operated Switches, 11KV AC transmission.

Refurbishment and Maintenance Of:

OHTE Wiring, OHTE Protection systems, Neutral Sections, Track Switches, H-Frames, Earthing and Bonding, etc.

Emergencies:

Replacement of overhead cables, repairs of damaged cables, major breakdowns (hook-ups and derailments).

Electrical Lighting and Power (EL&P):

Construction, refurbishment and maintenance of substations, power distribution and high masts lighting for different yards.

Construction of formation layers, drainage, roads and level crossings, as well as construction of gabion structures.

Transnet Freight Rail is a division of Transnet SOC Ltd Reg No: 1990/000900/30 Transnet Freight Rail is an Authorised Financial Services Provider (FSP 18828) Tel: 0860 690 730

www.transnetfreightrail-tfr.net

General Manager - RME Mr. Mdu Mlaba Email: mdu.mlaba@transnet.net Tel: +27 11 878 7099 Executive Manager : Business Development - RME Mr. Ash Naidoo Email: ash.naidoo@transnet.net Tel : (011) 878 7291

delivering freight reliably

AGILE . ADMIRED . DIGITAL . UNITED

TRACK ENGINEERING WORKS

Construction of new Track Infrastructure, including upgrades and rehabilitation. • Track evaluations • Set and crossing replacement • Re-railing (36m – 240m lengths) and destressing • Re-sleepering • Screening and profiling of ballast • Major emergency repairs (wash-aways / derailments) • Track welding: • Exothermic welding • Removal of wheel spin burns (skid-marks) • Repairing of crossings (preventative grinding) • Removal of ultrasonic detected defects • Cropping and creeping of rails • Loading, off-loading of bulk material, rails, sleepers and ballast including classifying and sorting of second hand track material.

FLEET

RME manages a fleet of some 642 vehicles across the country ranging from standard cars and bakkies to specialised heavy commercial vehicles such as dual purpose welding trucks and troop carriers that have been custom designed and built to ensure that we have fit for purpose vehicles.

SIGNALLING ENGINEERING WORKS Installation Of New Systems:

Fail Safe Data Transfer (FSDT) control over fibre optic cable, radio controlled crossing places, protected level crossings, anti-vandal equipment, new CS90 remote control and CTC centres, cable replacement programs, new signals and points and electrical interlocking units.

Workshop Wiring and Assembly:

Pre-assembly and wiring of equipment. Clean and refurbish existing interlocking units, site workshops when required.

Debugging, Pre-Testing:

Testing and commissioning of signalling works. All signalling works installed are pre-tested, debugged and commissioned by a registered Signalling Test Engineer. Pre-wire and assembly of various signalling equipment can be wired and tested in workshop conditions.

Construction Works For Asset Rationalisation: Re-positioning of points and signals, rationalisation of station layouts by removal of equipment from layout and interlocking, interlocking clean-up to incorporate alterations, installation of temporary interlocking crossover facilities to enable formation rehabilitation of track structure.

Rehabilitation and Re-instatement Of:

RME

Existing signalling structure, train detection equipment, axle counters, points machines, existing interlocking and remote control.

EDITOR’S COMMENT

In a recent press release the South African Institution of Civil Engineering (SAICE) a voluntary association of civil engineering professionals and practitioners, states that they are due to launch South Africa’s third Infrastructure Report Card on 26 September. The report will cover 11 sectors, including roads and rail, water supply, electricity, schools and universities, sanitation and waste management, and health facilities. These sectors are subdivided into 29 sub-sectors, each being given a grade and a brief description of the infrastructure involved – all in a way that will be accessible to the public. As a developing nation, South Africa’s engagement in the global economy is either advanced or constrained by the state of its infrastructural capabilities. The first ever Infrastructure Report Card (IRC) for South Africa was released in 2006 by the South African Institution of Civil Engineering (SAICE), which reported on the condition of infrastructure in South Africa at the time. This was followed by an updated IRC in 2011, which also covered notable developments and projects centred on the 2010 FIFA Soccer World Cup.

RAILWAYS AFRICA

There is a clear link between well-maintained public infrastructure and the social and economic health of any country. In light of this, infrastructure is regarded as a public asset and its condition should be of interest to all members of the public. South Africa has achieved remarkable strides in the past twenty years. It has provided infrastructural services to millions of citizens at a pace unrivalled in its history, and Government deserves recognition for this. However, maintenance of current infrastructure and development of new infrastructure require regular monitoring to ensure continued growth, hence the importance of well-researched IRCs which are released periodically. The soon to be released 2017 SAICE IRC is therefore of utmost importance. The biggest advantage for Government in utilising the IRC is its reliability measure, given that the IRC is produced and validated by individuals who are infrastructure professionals. Sundran Naicker PrEng, SAICE’s reigning President, emphasises that the IRC is a mechanism, which can be used to engage with Government. Manglin Pillay, CEO of SAICE, agrees: “If you do not measure something, it is very difficult to assess how you can improve

Connect with me on Linkedin:

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4:2017

on it, or even deliver it. Furthermore, I believe we are one of the few institutions, if not the only one, that carries out this particular measuring of infrastructure. In essence, we are helping Government assess itself in terms of how it is delivering infrastructure, and more importantly, on how to improve the operations of infrastructure, using the IRC as a measuring tool.” The challenges posed in the IRCs are no less acute because they are chronic, but they can be overcome, given the same dedication and ingenuity applied to the challenges posed by the 2010 FIFA World Cup. “It is SAICE’S intention that the current and future IRCs will evoke discussions that provide impetus for the required leadership, and action for a better sustainable lifestyle for all South African citizens,” concludes Malcom Pautz PrEng, also a past SAICE President (2015). If applied as intended, the 2017 SAICE IRC could serve as a monitoring tool in terms of Section 4(c) of the Infrastructure Development Act 2014, evaluating existing infrastructure with a view to improving planning, procurement, construction, operations, and maintenance. Infrastructure,

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EDITOR’S COMMENT

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once created, is unrelenting in its demand for maintenance, and this demand increases the longer it is ignored, potentially jeopardising the well-being of society. I have used this release as part of my editor's comment because; I believe that something of this nature should be put in place for each country in Africa, specifically compiled by institutions like SAICE based on the principles of a voluntary association with no commercial or vested interest. Inline with this type of reporting the African Development Bank recently released a report titled “Transport projects financed by the AfDB between 1967 and 2017 have benefited 450 million Africans” it is a fascinating report and I encourage you to read it. Now too, in this issue James Holley, Sheltam Group CEO, discusses the next chapter for the Sheltam Group, their changes, and commitment to the development of rail and related infrastructure for the African continent. Andrew Mukanyima and Gerard de Villiers of Arup co authored and supplied a thought provoking concept article on

inland intermodal terminals and freight logistics hubs. Gerhard de Beer presented a paper at the 17th World Transport Conference in China titled, “Freight Transport in Gauteng - May Boost Employment” and has been kind enough to share it for this issue. John Batwell reports on Zambia’s Railway System, of particular interest for me, is the manufacture of side tipping wagons for the purpose of hauling copper concentrates, which the ZRL is manufacturing internally. Rowland Ataguba of Bethlehem Rail Infrastructure Limited has provided an in-depth article on the Nigerian GE Railway Concession, including some interesting facts on the history and the potential impact that the concession will have for the greater Nigerian economy. Of course, we are all talking about the NRZ's recapitalisation programme, the tender has been awarded and I look forward to covering the progress. Till next issue.

Phillippa Dean Railways Africa™ - Editor

Railways AfricaTM is published weekly and sent to subscribers of the Railways Africa™ News Express. Register online to keep up-to-date and informed. http://www.railwaysafrica.com/subscribe/freemium

www.railwaysafrica.com 5

FEATURE: SHELTAM

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Sheltam's Next Chapter Sheltam has been on track literally and figuratively for over three decades. Back in the eighties, when General Motors, Electro Motive Division withdrew from South Africa, one of its Service Engineers, Roy Puffett decided to leave the company and remain in South Africa. He set off, with tools in his bakkie, to undertake in the embryonic days, the servicing and maintenance of diesel locomotives on several private industrial railways. After starting as a one-man operation, Sheltam has penetrated much of the Southern and Central African region with its varied rail services. The Sheltam brand has been seen in several countries, including the Democratic Republic of Congo, Tanzania, Zimbabwe and Mozambique amongst others, as well as on various industrial railway systems in South Africa. Sheltam’s successful track record has seen the Pan African Infrastructure Development Fund 2 (PAIDF2 Fund), managed by Harith General Partners (“Harith”), conclude an investment into Sheltam (Mauritius) Limited (“Sheltam Mauritius”) being the ultimate parent company of the Sheltam Group. This investment was made through a share subscription for 30% of the total equity in Sheltam for an undisclosed sum.

6 www.railwaysafrica.com

Harith General Partners is the leading Pan-African fund manager for infrastructure development across the continent. With its Head Office in Johannesburg, Sandton, Harith manages in excess of US$1bn, all of which is geared towards infrastructure in Africa. The Principle Capital group is a private investment group with offices in London, Geneva and Cape Town. The group has a diversified base of investments in companies in Europe, the United Kingdom and Africa. Prior to the Harith investment, Sheltam Mauritius restructured its shareholder debt obligations and as a result Principle Capital is now the controlling shareholder of Sheltam Mauritius. Roy Puffet, the founder of Sheltam, remains part of the group. James Holley, Chief Executive Officer, Sheltam Group, in a recent interview expands on the new path set for the Sheltam Group.

Sheltam has always had an outstanding technical ability, providing the company a solid platform for growth and development. Following this investment, Sheltam now has the financial capacity to unlock rail projects in South Africa and across the continent. Sheltam Mauritius will officially launch two initiatives, a Rolling Stock Leasing business and a Rail Projects and Infrastructure platform, both aimed at adding significant capacity to the company’s ambition of being a significant rail operator on the continent of Africa. This restructuring complements the intrinsic backbone of the business, being the operational and maintenance competency, training, compliance and safety.

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FEATURE: SHELTAM

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The Sheltam Mauritius Leasing company will be positioned as a ring-fenced dedicated rolling stock leasing business. It will seek to provide lease, finance and off-balance sheet solutions to complement the sales and marketing activities of the various locomotive, wagon and commuter rail OEM’s active on the continent of Africa. The dedicated Rail Projects platform will seek to invest in concessions, rail track upgrades and new build projects as well as investments into associated infrastructure. It will be the first dedicated rail track infrastructure platform focussed exclusively on Africa. Willem Goosen, has been appointed as CEO Rolling Stock Leasing & Infrastructure Projects at Sheltam (Mauritius) Limited. Willem has over two decades of railway industry experience, with particular

knowledge of rail leasing, and will champion the growth of the leasing business whilst initiating projects for the Group. The company is in the process of completing a substantial reinvestment programme into their existing fleet of 44 EMD and GE locomotives. It has furthermore purchased an additional three, nine-year old General Electric C30EMP locomotives. Sheltam is about to launch the development of a new state-of-theart Sheltam owned workshop for rolling stock maintenance, heavy interventions and overhauls. It will concentrate on its own fleet of locomotives, cabooses and wagons as well as third-party fleets, whilst providing a base for component refurbishments and unit exchange. It will house the Sheltam parts store.

“The stringent process driven culture of Sheltam and its staff especially in terms of technical capability, safety, compliance and training, over the life of Sheltam is why we feel Sheltam is the benchmark for quality and cost effective services,” says Holley. Sheltam has developed a robust in-house training programme for locomotive and wagon technicians as well as for locomotive drivers and shunters. “We have never had a trainee fail an external competency test, as training is extensive and thorough over the three year programme,” says Holley. Similarly the company sees itself as holding class leading rail safety and regulatory compliance processes and procedures. Sheltam is certified by the Rail Safety Regulator, is ISO 9001:2008 certified and benchmarks a NOSA 5 star safety rating with a DFIR of 0.72%.

www.railwaysafrica.com 7

FEATURE: SHELTAM

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“Many of Africa’s railways are yet to live up to their full potential. We are building a company that gives governments, private and public railways, mines and industry a platform to reach their intended potential. Railways are the transformational backbone of industry for most developed nations and we believe it is time for railways to be the same for Africa. Sheltam is in a position to make meaningful investments for the continent to succeed”.- James Holley.

8 www.railwaysafrica.com

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FEATURE: SHELTAM

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The training services offered to external customers or students looking into a career in rail include: Firstly, a career development in the fields of train operations: train driver, train driver’s assistant, shunter and train control officer. Secondly, a technical career development: an apprenticeship as a diesel electric fitter to be able to work on locomotives and also apprenticeships for wagon fitters to repair and maintain railway wagons and other rolling stock. These technical apprenticeships will essentially encompass the following curriculum: •

The diesel engine and associated mechanical equipment, turbo chargers, traction motors,

generators/alternators, electrical monitoring and control systems, wheels and bogies, electrical and mechanical troubleshooting •

ECP braking systems

•

Brake refresher and initial certification-28LV, 28LAV1, 26L, CCBII, KbrDIVIII & Westinghouse vacuum controlled straight air brake for 5E1 electric locomotives

•

Artisan upskilling on new technologies

•

Artisan refresher on electrical and mechanical troubleshooting

•

Locomotive upgrades

“Any successful rail operation in Africa requires, amongst other matters, vast experience, technical knowledge, reliable

rolling stock and investment into track. We have really set up and geared ourselves to provide these key elements into projects. Management will now seek close collaboration with OEM’s, construction companies, project developers and most importantly freight owners as we look to roll out this vision”. “Many of Africa’s railways are yet to live up to their full potential. We are building a company that gives governments, private and public railways, mines and industry a platform to reach their intended potential. Railways are the transformational backbone of industry for most developed nations and we believe it is time for railways to be the same for Africa. Sheltam is in a position to make meaningful investments for the continent to succeed,” concluded Holley.

www.railwaysafrica.com 9

We move more than just freight! Transnet Freight Rail is a division of Transnet SOC Ltd Reg No: 1990/000900/30 Transnet Freight Rail is an Authorised Financial Services Provider (FSP 18828) Tel: 0860 690 730

Transnet Freight Rail is investing in the positive progress of the South African economy. Investment programmes in rolling stock and infrastructure, together with increased volume growth, skills development and training all equate to a South African economy on the move, in the right direction.

delivering freight reliably

www.transnetfreightrail-tfr.net

FEATURE: INTERMODAL

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Inland Intermodal Terminals And Freight Logistics Hubs Supply chains compete and not products, commodities or companies. This implies that all nodes and links in the supply chain should be engaged and integrated to be able to provide seamless and transparent logistic services from origin to destination. The nodes consist mainly of intermodal terminals and freight logistic hubs, which provide intermediate locations where logistic value is added to the movement of containers and freight in bulk or break-bulk. This is of particular importance on freight logistic corridors that connect seaports with hinterland origins and destinations.

Coauthored by:

Andrew Mukanyima, Arup

Gerard de Villiers, Arup

Terminology seems to be a challenge in practice but for purpose of the article, intermodalism refers to the use of two or more modes of transport, intermodal terminal refers to a facility that provides for the interchange of freight between transport modes such as road and rail, port (or wet port) refers to a town or city with access to navigable water where ships load or unload, inland port (or dry port) refers to the same functionality of a wet port but located in the hinterland. A port is usually differentiated from a terminal because of the availability of customs clearance functionality at the port. Freight logistics hubs include most of the mentioned concepts and acts as a collective noun for the different terms. The inland intermodal terminal concept has been developed to provide a focal point where the different transport modes (mainly road and rail, although inland waterways are also included where available) are integrated into one terminal where consolidation, deconsolidation, modal transfer and other value

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Figure 1 adding activities are concentrated. This concept works on a "hub-and-spoke" principle, where containers are received from various origins by unit or block trains to the central hub, and distributed to the destinations, usually by road. Benefits accrue to all parties by offering consolidation services for both imports and exports, as well as utilising the unit or block train concept, which streamlines the rail transport side significantly. The value adding activities or services can include: • Basic services such as container repair and refurbishment, container cleaning and maintenance, empty

•

container storage, in-bond warehousing; Intermediate services such as specialised warehousing (eg refrigerated, high security, liquid/bulk handling and storage), general warehousing for lessthan-container loads (LCLs), cartage, delivery and pickup, groupage (consolidation of loads), shipping line container parks; and Specialised services such as export packing; insurance; freight forwarding; 4PL management; commercial services.

These value adding activities or logistics services are shown

Figure 2

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FEATURE: INTERMODAL

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in Figure 1 in concentric circles around the core infrastructure in the terminal. Inland intermodal terminals and freight logistics hubs have been established historically as extensions to existing facilities and in locations determined by previous land use patterns and developmental requirements. However, proper planning for developing such facilities has become necessary for ensuring coherent and integrated development that will support and enable efficient supply chains.

operational issues should be addressed, based on which network design has been implemented, or what channel strategy followed. The typical layout of a dry port is indicated in Figure 3 and includes provision for road and rail access, container handling areas, full and empty container stacking areas, container freight station (warehouse), container repair area, workshop and administrative offices. Road trucks enter and leave through the entrance gate where receipt or delivery operations take place.

crane are mainly the flexibility and mobility of not having to operate on fixed rail infrastructure. Some smaller terminals work with trailer operations where containers are not stacked but kept on skeletal trailers but high volumes are not suitable for this type of operation. In conclusion, much has been written on characteristics of the development of successful terminals or logistics clusters and Sheffi suggests the following attributes of successful facilities: • Favourable geography because of the economics of transport with origins and destinations that follow very specific geographical patterns; • Supporting infrastructure because the cluster is as good as its transport network infrastructure; • Supportive, efficient government because they are the main providers of public infrastructure such as roads, railways, ports and airports; • Education, research and innovation because all economic clusters depend on qualified and competent people to do the work efficiently and effectively; • Collaboration and unity of purpose amongst all stakeholders; and • Value-added services that extend beyond moving and storage functions to include transformation or modification of goods.

Figure 3 Stock and Lambert propose a useful framework for logistics planning in general and network design (including locating terminals and hubs) in particular. It is important to understand that not all decisions are taken at the same planning level with the same implications, and this framework is based on a hierarchy of decisions that suggests logistics decisions are made hierarchically in an iterative manner, starting on the highest level and then cascading down to the lowest level as indicated in Figure 2. It is clear from the diagram that the process requires strategic direction on market demand and segmentation before decisions can be made on terminal network design or channel strategy. Similarly, structural direction should determine functional decisions on facilities, transport and inventories. Finally,

Container handling operations with low volumes of containers usually start with reach stackers and as the volume of containers increases, rail mounted gantry cranes are used. Technical design standards and operational procedures and guidelines affect the performance of dry ports and careful analysis and evaluation is needed to design the most effective system for the volume and type of containers to be handled. Figure 4 shows the typical operation of a rail mounted gantry crane in combination with a reach stacker. This operation is used in most of the recently developed dry ports although it is important to note that rubber tyred gantry cranes and straddle carriers in addition to reach stackers are also used. The benefits of the rubber tyred gantry crane compared to rail mounted gantry

Figure 4 The purpose of this brief article was to introduce the concept of inland intermodal terminals and freight logistics hubs as important nodes in supply chains. The planning of these facilities has become increasingly important to ensure the process starts at estimating the market demand before the technical design should be done. Once properly planned and designed, the facilities add much value in the smooth operation of the supply chains from origins to destinations. www.railwaysafrica.com 13

EVENT FEEDBACK

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SARA Report Back The Southern Africa Railway Association (SARA) annual Rail Conference and Exhibition provides a platform for rail operators, suppliers, manufacturers, customers and professionals to come together and share their knowledge and experiences in a global forum.

The 7th Annual SARA Rail Conference took place on May 24- 25, 2017 at Emperors Palace Johannesburg and has set a new standard. With a record-breaking number of attendees, high-ranking speakers from across the globe, in-depth discussions of the pressing challenges, as well as many opportunities to build relationships, the SARA Rail Conference and Exhibition has proven its relevance once more. The conference received support from five sponsors and 20 exhibitors. Unlike in the past where the conference was for members of SARA, this year’s conference was open to all railway stakeholders, operators, suppliers, customers and regulators who are not members of SARA. The open exchange between SARA members and the business communities from SADC and around the globe proved to be more important than ever before. The conference was co-chaired by Nkululeko Poya outgoing SARA President and CEO for Railway Safety Regulator and Stephenson Ngubane SARA Chairman and CEO of Swaziland Railway. Keynote speakers during the opening ceremony were: • Brandon Samson from Aveng group • Thamsanqa Jiyane CE Transnet Engineering • Siyabonga Gama group CEO Transnet SOC • Deputy minister of Transport South Africa Sindisiwe Chikunga • Eng. Lewis Mukwada GM National Railways of Zimbabwe • Christopher Musonda CEO Zambia Railways Limited 14 www.railwaysafrica.com

During the opening session, Poya highlighted SARA as a SADC association of cooperation for railway companies and especially mentioned the activities in the field of railway safety, which could be explored by SARA members through direct or indirect contact with the various SARA working bodies. He also highlighted the need to find ways to use railways effectively in dealing with the continued pressure to do more with less. The openness of government to provide the means to modernise for the benefit of citizens and businesses, and to give the public sector a better understanding of how to focus on what really matters to customers. The deputy minister of transport in South Africa Sindisiwe Chikunga said countries have an opportunity and a responsibility to ensure that government should contribute to development in meaningful ways. In this regard, she highlighted the need to strengthen government leadership capacity, expand the scope of government strategies beyond efficiency and fully utilise the railways as a positive and transformative force for the future. In her view, governments provided extraordinary opportunities but also faced real vulnerabilities, which must be recognised and managed to realise and sustain railway potential. More than 450 participants from 10 countries attended this SADC railway event. There were representatives from railway operators, railway undertakings, infrastructure managers, safety regulators, railway accident investigation agencies, railway trade unions, equipment manufacturers and research institutes.

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EVENT FEEDBACK

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The 8th SARA Rail Conference and Exhibition will take place from 22 – 25 May 2018 at the Gallagher Convention Centre, Johannesburg under the theme, “Building Synergies In Supply Chain Logistics In Pursuit of Excellence In Southern Africa”. The theme for the SARA Rail Conference and Exhibition 2017 was “Innovation in Railways Road and Ports for Regional Socio-Economic Growth”. Presentations and discussions were submitted under the following core themes: • • • • •

Regional Transport Integration and Socio-Economic Growth Regional Transport Infrastructure Industrialisation in Southern Africa Contribution of Railways to Socio-Economic Growth Securing Finance through Partnerships.

www.amstedrail.com

At the end of the conference, the participants’ commitment to innovation in railways, and the benefits it has brought not only to businesses but also to society at large was reassuring. However, it became clear that – in a world of complexities – it is necessary to better explain what these benefits are, and to win back support for free trade.

Tel: +27 87 310 1769 | rvanjaarsveld@amstedrail.com Gross Street, Tunney Ext 3, Germiston, South Africa

Amsted_712_advert_RA_180x120.indd 1

2016/08/10 3:39 AM www.railwaysafrica .com 15

FREIGHT PLANNING

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Freight Transport In Gauteng May Boost Employment Freight transport is at the heart of a country’s economy and major investment into the freight transport infrastructure of the country is needed to improve the quality of life for all. Gerhard De Beer, a Technical Executive from GIBB recently presented a paper at the 17th World Transport Conference held in China on Freight Transport in Gauteng for the next 25 years. As the population increases, the existing road system in Gauteng will not be able to accommodate the growth in public transport and specifically the increased number of heavy vehicles transporting freight in and around Gauteng in the future. He is of the opinion that a long-term strategy (to develop freight transport infrastructure) is required in conjunction with a five-year rolling investment plan. It is expected that Gauteng’s population could increase to 18.7 million by 2037. However, the need for public transport and freight transport will have to increase to meet demand in the future. These two modes of transport will continue to be in conflict as the demand increases. "By 2037, one of the biggest growth areas will be containerised freight and fast-moving consumer products. This is a major contributor to the economy because people consume these goods, ranging from food to furniture. These goods need to be manufactured and sent to retail markets, hence jobs are created at all levels," he explains.

Construction And Employment Using China as an example, De Beer says investing in core infrastructure helped China since the early seventies to deal with poverty but at the same time established a platform to increase employment. We need to rethink our strategies in South Africa to achieve similar results to China. According to De Beer we need to have a clear vision, development plan, a body to monitor execution, a five-year rolling plan and the political willingness to execute. "Construction creates jobs because there is a need for labour. China was able to weather poverty by investing in core infrastructure. Should we not consider investing in core infrastructure, which can be used as a catalyst to create jobs, and in some instances, upskill employees?"

Strategy And Master Plan "In 2013, GIBB was involved in the compilation of the 25-year Integrated Transport Master Plan (ITMP25) in collaboration with the provincial authority - Gauteng Roads Department. It is now time for us to start planning on a microlevel and involve all municipalities," he asserts. The ITMP25 has taken the movement of freight into the equation. To facilitate the plan, eight mutually supportive ‘strategic interventions’ were identified and arranged into four clusters. One of them is for freight transport which deals with the strengthening of freight hubs in the province.

"By 2037, one of the biggest growth areas will be containerised freight and fastmoving consumer products. This is a major contributor to the economy because people consume these goods, ranging from food to furniture. These goods need to be manufactured and sent to retail markets, hence jobs are created at all levels".

November 2013

Final

The mandate of the Gauteng 25 year Integrated Transport Master Plan is to enable the Department of Roads and Transport to regulate, plan and develop an efficient and well integrated transport system that serves the public interest by enhancing mobility and delivering safe, secure and environmentally responsible road based public- and private transport and air and rail services.

http://www.itmp25.gpg.gov.za/

Gerhard De Beer, technical executive, GIBB

16 www.railwaysafrica.com

GAUTENG 25-YEAR INTEGRATED TRANSPORT MASTER PLAN

25-YEAR INTEGRATED TRANSPORT MASTER PLAN

FREIGHT PLANNING

RAILWAYS AFRICA Infrastructure Development

[Diagram courtesy Gauteng Provincial Government - 25-year Integrated Transport Master Plan]

"Maintenance practices can assist with the upliftment of communities and improve socio-economic conditions. In rural areas where infrastructure is provided to communities, the government and private sector can play a pivotal role in providing such infrastructure on condition that skill transfer takes place in communities. Authorities can contract communities to maintain non-core infrastructure and eventually the roads themselves". Gerhard De Beer, technical executive, GIBB The Gauteng Global City Region (GCR) as shown in Figure 2-1 was launched in 2006 by the Gauteng Provincial Government to promote a globallycompetitive province. The map illustrates the urban conurbations and surrounding activity areas with which the province has strong functional, social and economic interactions. [Diagram courtesy Gauteng Provincial Government - 25-year Integrated Transport Master Plan]

18 www.railwaysafrica.com

According to De Beer they would like to develop a freight transport system with mega intermodal facilities on the periphery of Gauteng, supported by road and rail. This type of development could decrease the total logistics cost as well as externalities such as accidents, emissions, noise, congestion, land use and policing. Mega intermodal facilities can be used as a medium to migrate freight from road to rail. The construction of freight specific roads and mega terminals will become a reality in the future. He further poses that the private sector embark on initiatives to fund and develop such infrastructure.

Maintenance "South Africa’s greatest challenge is creating awareness around the importance of maintenance, establishing a maintenance plan and developing skills to execute that plan. We need to develop technical skills in the workforce to maintain infrastructure and a proper information management system to determine the life cycle cost of such infrastructure. This speaks to various fields of study.

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What We Need To Do De Beer suggests four things to kick-start core infrastructure projects. Develop a five-year infrastructure rolling plan from the long term strategic plan, monitor the execution of the plan, start with the required pre-feasibility and feasibility studies and finally get investors on board. In the future, he anticipates seeing mega terminals constructed, to serve as anchor projects. Once you have an anchor project, other supporting infrastructure, road network and new industrial developments will follow.

FEATURE: NIGERIA

RAILWAYS AFRICA

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The Nigerian GE Railway Concession

Contributed by: Rowland Ataguba of Bethlehem Rail Infrastructure Limited

It is proposed that the concessionaire would be responsible for the infrastructure rehabilitation and investment, and the operation and maintenance of the 3,500km network providing railway passenger and freight services.

The recent decision to award the concession for the operation and maintenance of the narrow gauge network of the Nigerian railway system to GE subject to contract brings to fruition a decision of nearly 20 years ago. A decision occasioned by the consistently poor performance of an important mode of transportation for a country with so much demand and mobility. The GE concession is perhaps the best decision that the current government has taken for the railways since coming to office two years ago. It had been on the table before two previous governments who had dithered on it. It is ambitious as it is transformational in potential impact. It is proposed that the concessionaire would be responsible for the infrastructure rehabilitation and investment, and the operation and maintenance of the 3,500km network providing railway passenger and freight services. It will also remodel and redevelop nine major stations in Lagos, Ibadan, Kaduna, Kano, Enugu, Port Harcourt, Jos and Gombe, which potentially provide superior investment performance in terms of

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commercial developments such as shopping malls, hotels and offices. It would also develop non-core operational railway land in Lagos, Enugu, Port Harcourt, Ibadan, Kano and Bauchi into hotels, event centres, shops, offices and residential estates. In order to meet its railway operations requirements, GE will build a locomotive assembly plant in Nigeria to produce the key equipment that it would need. It would also build a university of transportation that will train railway engineers among others. While the concession agreement is being negotiated which means that it is by no means a done deal yet, the commitment of the parties to a successful outcome is not in doubt. The challenges ahead lie in the detail, institutional capacity limitations and the ability of the government to break a habit of a lifetime by living up to its contractual obligations to the letter. As with transactions of this scale and tenor, political risk is ever present and what happens post-2019 elections may weigh on the minds of stakeholders and provide some distraction. The Nigerian railways have historically

under-performed due to under-investment and mismanagement. With a population of about 170m people and a landmass of over 900,000km2, Nigeria is Africa’s most populated country. The transportation sector accounts for only 1% of GDP with railway market share of the transport sector at less than 1%. Rail density is a derisory 4.3 railway km per 1000km² compared to South Africa’s 17.1 railway km with rail per population ratio of 24km per million persons where the norm is 80km and beyond. With an operating ratio of about 200%, the government owned Nigerian Railway Corporation is technically insolvent and has been so for decades even going bankrupt twice in the past. For a country with estimated freight movements of about 120mtpa, the railways only manage to haul less than 500,000mtpa in recent times. A virile railway industry will transform the transportation landscape, as it will complement the dominant roads in multimodality while challenging it for long distance freight traffic where rail has a competitive advantage. The roads sector is expected to react creatively leading

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RAILWAYS AFRICA

to an improvement in its services and efficiencies that ultimately benefit users. Competition from rail is expected to lead to a significant reduction in the number of trucks and articulated lorries on the roads for long distance haulage. This should reduce wear and tear and congestion on the roads, lowering maintenance costs, accident rates and greenhouse gas emissions while offering a wider choice. The developmental impacts of a thriving railway industry for job creation and economic stimulation cannot be overstated. At the heart of the GE concession business strategy is rail freight which is reflected in its choice of consortium partners comprising Transnet of South Africa, Africa’s largest rail freight operator, APM Terminals of the Netherlands, a

global ports operator and Sino Hydro of China, an infrastructure engineering and construction company. The figures provided by the government’s privatisation agency suggest that the property development proposals on their own are commercially viable with the plan to remodel major stations producing Equity Internal Rate of Return (IRR) in excess of 20%, which may be further boosted by credible transit activity. The railway operations and maintenance component on the other hand when considered on its own has a negative net present value and an IRR below the hurdle rate of 16% if funded entirely by the concessionaire. This is driven by capital (CAPEX) and operations (OPEX) expenditure of just over $3bn and $3.5bn respectively with

FEATURE: NIGERIA

estimated revenues of about $12bn over the assumed 25-year life of the concession. The IRR, however, improves to over 20% if the government makes a contribution of about $1bn to the CAPEX and in public service obligation payments (subsidies) towards the operation of the unviable passenger service.

anachronistic railway law, which is being repealed and re-enacted, and the proposed creation of an independent regulator may present some challenges as the new or reconfigured institutions may not have had the opportunity to bed in before the inception of the concession.

The big elephant in the room remains whether the government will meet its subsidy payments as and when due as this would directly impact on the concessionaire’s cash flow. The strategic imperative for the university and locomotive assembly plant is sound railway business and underpins the potential as a hub to serve the West African sub region of which the Nigerian market is prime. The institutional environment including the

Notwithstanding, experience from the reform of the telecoms sector provides evidence that the challenges can be managed. In sum, that Nigeria needs a thriving railway and there is a significant railway business opportunity is not in doubt. That GE and its partners have the capacity and the competence to overcome the myriad challenges and deliver an effective railway service is also apparent. A new dawn, therefore, beckons for the Nigerian railways.

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2017/06/13 3:49 PM www.railwaysafrica .com 21

FEATURE: ZAMBIA

RAILWAYS AFRICA

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Zambia’s Rail System Regaining Credibility John Batwell reports on Zambia Railways Ltd. which is 50 years old….. Zambia Railways Limited (ZRL) is 50 years old – formed in June 1967. Back in the sixties, the picture of the railways in Central Africa was fast changing from the spreading system born from the dreams of Cecil Rhodes into more compact units organised on a national basis. Zambia’s independent system covered over 1,200km of single track railway. The most recent innovation track-wise has been joining Chipata with Mchinji on the Malawian border and in so doing facilitating traffic to and from the Indian Ocean port of Nacala. In recent years Zambia Railways came out of an unsuccessful concession deal which for 10 years did little to improve a decaying system. The company was renamed Railway System of Zambia, RSZ. Back in 2002 Zambia Railways carried a paltry two million tonnes of traffic annually. Train speeds were down to some 15kph from a previous 70-80kph.

Good track and ballast as evident in this illustration on the Copperbelt system. Photo: ZRL

Railway System of Zambia was a subsidiary of NLPI Ltd, an investment holding company whose main investment focus is infrastructurerelated projects on the African continent. Senior management stated at the time of the nullification of RSZ in 2012 through non-delivery that the concession had failed the country’s rail transport sector, owing to the design of the agreement being inadequate. It did not put in measures which safeguarded

Passenger rolling stock from Transnet Engineering sports a striking red scheme offset by lining that ties up the colours of the country’s national flag. Photo: M. Torkington

22 www.railwaysafrica.com

One of Zambia Railways Limited most powerful class of diesel locomotives sports the new red livery – it is a General Motors GT36CUMP unit. Photo: F. Lanoue

government. With any form of privatisation, wider consultation is necessary and the regulators checking on the concessionaire were not properly in place. At the point of nullification of the concession, the Zambian government put in US$120m just to retrigger operations under the title of Zambia Railway Limited. Track rehabilitation, signalling and rolling stock renewal were all imperative to kick starting the national system. Road transport had bagged 88% of the movement of goods with largely foreign truck operators tearing up the roads with no expense

to them for repairs. Besides heavy-haul traffic being lost to road operators, the Zambian rail system’s public service, its passenger trains, had deteriorated dramatically. Pre-concession, there were five trains a week on the north-to-south main railway route linking Livingstone with the Copperbelt towns, but this dropped right down to one. The service was no longer seamless along the whole route. With seven coaches per train, a twice-weekly service originating from the north, was meeting a service from the south and then each train set would turn around and return to its initial departure point. Transnet Engineering was engaged by ZRL to refurbish 30 passenger saloons which embraced Standard, Economy and Business class sections. Other rolling stock developments have been the manufacture of side-tipping wagons in local workshops. These wagons are for the purpose of hauling copper concentrates and limestone on the intermine operations. Motive power rehabilitation has been in hand in the last couple of years. Ten existing U20C type diesel locos have been identified for refurbishing with the help of SMH Rail of Malaysia. The sub-assemblies have been replaced and only the original frame is still used. The work is undertaken in Kabwe workshops and the rehabilitated fleet will operate as the 01-700 class. The exercise is costed at some 50% of the procurement of brand new locomotives.

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FEATURE: ZAMBIA Chief executive officer Christopher Musonda – also the current Chairman of SARA - says the railway company is in the process of connecting newly-built smelters on the Copperbelt to its railway network. About US$50 million is required to implement the project. Musonda says the Copperbelt had in the last 15 years recorded an unprecedented increase in the number of smelters and refineries but most of them were not connected to the railway network. There is a new smelter at Nchanga, a new smelter in Chambishi, a new smelter in Mufulira and Kansanshi. Musonda added that new concentrators have also sprung up but in the development of all this new infrastructure, a railway was not included in the picture, hence the decision by ZRL to try and connect the new smelters and refineries to its network. So far, Nchanga and Chambishi have been connected and Lubambe was also being considered. Bwana Mkubwa in Ndola was being considered under the facility of intermodal connectivity which will see the railway company servicing firms such as Dangote Cement and other plants in the area. The programme to connect the smelters, concentrators and refineries will help to create the capacity of the railway company to move

more tonnage of material in addition to creating jobs and a bigger network. Like other railways in the region, ZRL has to deal with setbacks like vandalism including the theft of clips and sleepers.

RAILWAYS AFRICA transport petroleum products from Ndola to Lusaka by rail. The contract, worth approximately US$20 million, will see 144 000 metric tonnes of petroleum products being hauled annually, over a

The deal with Lafarge being signed by ZRL Managing Director Christopher Musonda (right).

ZRL has landed two big contracts that are contributing to putting product back on trains. Last year a transport agreement was signed with Lafarge. The deal aims to enhance the delivery of production inputs used in cement manufacture as well as the delivery of clinker and cement products both within Zambia and the broader region. The trade agreement spans three years initially, subject to renewal in 2018. Puma Energy has contracted Zambia Railways Limited to

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period of three years. Speaking at the contract signing, Christopher Musonda said that this contract would also have a positive effect on road congestion in the country and improve ZRL’s revenue base. Two years ago, Zambia Railways took over the 163km Mulobesi branch railway - US$100m will be necessary for the line’s total refurbishment requiring new sleepers and track of 91lb. The rebuilding of this railway line would then lend itself at some future stage to connectivity.

Zambia Railways Limited (ZRL) noted in their internal publication that the company has embarked on the manufacturing of side tipping wagons for the purpose of hauling copper concentrates and limestone on the Intermine. Approximately seven wagons have been produced, tested and certified for train operations. It is the ZRLs intention to grow the production of the side tipping wagons, to take full advantage of the movement of lime and concentrates. Wagons are being manufactured at ZRLs Engineering Division, Kabwe Main Workshops, from scratch and designed specifically for customer requirements in terms of Intermine operations. Zambia Railways has a total fleet of 2,094 wagons and so far 91 wagons have been rehabilitated.

A Zambian-based tour operator’s old world, Garratt-hauled upmarket train. Photo: T. Heath

24 www.railwaysafrica.com

FEATURE: INTERMODAL

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COMPANY NEWS

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COMPANY NEWS

RAILWAYS AFRICA

Lucchini RS Invests R200 Million In South Africa's First Forged Wheel Manufacturing Plant Lucchini RS, a world-renowned Italian manufacturer of forged railway products, officially opened its new production facility in Germiston, Ekurhuleni. “Having actively traded forged railway wheels and axles in South Africa over the last 13 years, Lucchini RS has now committed to localising wheel machining in the country, and to subsequently create local jobs,” said Augusto Mensi, CEO of Lucchini RS. “In this initial step, it is envisaged that approximately 45 new jobs will be created through this initial investment, with planned local product content of between 30 to 40%.” The localisation involves the establishment of Lucchini South Africa (Pty) Ltd., created to complete the manufacturing process of blank wheels imported from Italy. These blank wheels will then be machined, inspected and delivered to the end customer.

Lucchini SA, is housed in a 10 000m² facility, and the R200 million investment includes the fitment of state-of-theart technology in plant and machinery that adheres to the manufacturing process standardisation strategy of the Lucchini RS Group. The plant has the capacity to manufacture up to 20 000 wheels per annum,

depending on the mix of wheels produced.

company’s shareholding in the future.

“A further investment of approximately R1.8 billion is envisaged as further growth into the regional market is anticipated,” said Mensi. “We see the investment into Lucchini SA as the first step into our expansion into Africa.”

As a trading company, Lucchini SA, has been operational since late 2015, being awarded long term-contracts by strategic customers to supply locomotive, freight wagon and passenger coach wheels.

The Lucchini RS Group is based in Lovere, Italy, and is specialised in the design, manufacturing and sale of high-end railway products and solutions, castings and forgings, as well as special steel ingots for various applications. It has wholly-owned and controlled companies in Italy, Sweden, Poland, Austria and Belgium, trading companies in China and India, as well as minority shareholding in an industrial Joint Venture company in China. At the end of 2016, Lucchini RS Group employed more than 2,000 employees worldwide.

Lucchini RS is the first international forged wheel manufacturer to localise in South Africa. It is for this reason, that the venture has sparked the interest of Black South African investors, who are partnering with Lucchini RS in support of this development. Kusini Investments currently holds substantial shares, with plans to expand that

“The first product manufactured in South Africa was produced in October 2016, and the first manufactured product was delivered in March 2017,” said Stephan Nel, managing director of Lucchini SA. Recent projects include the production and supply of 34” and 36” wagon wheels, 15E and 19E locomotive wheels to Transnet Engineering; and TRAXX 23 locomotive wheels to Gautrain (Bombardier South Africa), as well as PRASA. “Importantly, an extensive training and skills transfer programme is being implemented to provide critical skill employees with an opportunity to spend three weeks at Lucchini RS in Italy, to attain the necessary competency,” said Nel. “To us, training and skills development are some of the key factors not only to our success but also the success of our employees.” Lucchini SA currently permanently employs 38 staff members, with several learnership and apprenticeship candidates in on-the-job training to obtain their qualifications in, amongst others, Production Technology, Electrical and Supply Chain Management. The company has also invested time and resources in the nearby Germiston High School, offering bursaries, as well as paying for the stationary and textbooks of several learners.

www.railwaysafrica.com 27

AFRICA UPDATE

RAILWAYS AFRICA

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NRZ RECAPITALISATION TENDER AWARDED

DANGOTE CEMENT SENEGAL AND DAKARBAMAKO FERROVIAIRE (DBF)

The State Procurement Board (SPB) has approved a recommendation by the National Railways of Zimbabwe (NRZ) to award a tender to fund the recapitalisation of the organisation to the Diaspora Infrastructure Development Group (DIDG)/Transnet Consortium.

Dangote Cement Senegal signed a Memorandum of Understanding (MoU) with Dakar-Bamako Ferroviaire (DBF) in July to strengthen its presence in the Malian market and, in return, to relaunch the activities of the railway undertaking.

The SPB has therefore granted authority to the NRZ to engage DIDG/ Transnet Consortium for further due diligence with other relevant ministries on the Funding Agreement Modalities and report back to the SPB. The DIDG/Transnet Consortium submitted a bid of US$400million. The consortium emerged the winner ahead of six other organisations which had been shortlisted by the SPB. The NRZ is now geared for its next step in the recapitalisation project which is to engage the consortium for contract negotiations and financial due diligence to commence week ending 18 August 2017. The NRZ recapitalisation effort attracted immense interest from potential investors both local and international after Government, through Cabinet, gave the organisation the go-ahead to go into the market to seek funding on 11 April 2017. More than 80 companies attended a compulsory pre-bid conference in Bulawayo on May 30, 2017. When tenders closed on July 4, 2017, six companies met the required criteria and were shortlisted for the final selection. The six companies were Sino Hydro, China Civil Engineering Construction Corporation, SMH Rail, TFRDiaspora Infrastructure Development Group/Transnet, Crowe Horwath and Croyeaux Limited. The recapitalisation process was initiated to restore NRZ’s operational capacity and to ensure it returns to profitability. The NRZ system has a capacity to carry over 18mt of freight annually but is currently moving 2.7mt. The NRZ has a fleet of 168 locomotives, of wich 60 locos are in service and more than 7,000 wagons of which, 3,512 are in use. The recapitalisation project will involve the rehabilitation and renewal of plant, equipment, rolling stock, track, signalling and telecommunication infrastructure and the supporting Information technology systems.

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The agreement covers the financing of the rehabilitation of two locomotives and 70 wagons for an estimated US$6 million (CFAF 3.5 billion). In exchange, the Senegalese-Malian company, operating the Dakar-Bamako railway line (1.286km), will convey for Dangote Cement Senegal (DCS), 100,000 tonnes of cement per year in the Malian capital. The tender for the rehabilitation of the rolling stock in question is in the process of being prepared. The strategic advantage of this partnership will allow Dangote Cement Senegal to have a more structured approach for exports to Mali. Once realized, this partnership will be a breath of fresh air for DBF. The Transrail ash carrier (formerly a subsidiary of the French trading group Advens of French-Senegalese Abbas Jaber, now DakarBamako Ferroviaire) now has only two to three locomotives and a few functional wagons. This MoU will allow DBF to double their business. The once the vital axis of trade between Senegal and Mali, the Dakar-Bamako railway line is now supplanted by road. According to the National Agency of Railways of Senegal, by the end of 2015, the volume of goods transported on this axis represented less than 300 000 tonnes per year. The potential is 3 to 4 million tonnes.

INAUGURAL ADVENTURE HOLIDAYS STEAM CHARTER National Railways of Zimbabwe vintage steam trains continue to attract immense interest from international steam train enthusiasts. A new player entered the potentially lucrative steam train charter niche market with a successful hire of an NRZ steam train for a seven-day excursion. Far Rail Safaris of Germany, trading as Adventure Holidays Steam Charter has become the second foreign company to hire NRZ steam locos for its clientele.

CONSTRUCTION OF MOATIZE – MACUSE RAILWAY AND PORT PROJECT IN MOZAMBIQUE Announced by China Machinery Engineering Corporation, the China National Complete Engineering Corporation (CNCEC), in a consortium with Mota-Engil Engenharia e Construção, Africa S.A. (MEA), a Portugal-based company and a subsidiary of Mota-engil SGPS with Thai Mozambique Logistica S.A. (TML) have signed a contract for the construction of the Moatize – Macuse 484km railway and port project in Mozambique. The Consortium, as the general contractor, will be responsible for the design, procurement, civil engineering and construction, installation, training, commissioning, warranty and other works of the Project on a turnkey basis. The contract value amounts to approximately US$2,389 million. The corresponding amount of the contract value in respect of the scope of work of CNCEC is an approximate US$1,194.5 million. The Contract will become effective upon the satisfaction of certain conditions precedent and is to be completed in approximately 44 months from the commencement date.

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AFRICA UPDATE

RAILWAYS AFRICA

THE MINISTER OF TRANSPORT STATEMENT REGARDING THE LOCOMOTIVES CONTRACT BETWEEN PRASA AND SWIFAMBO South African Minister of Transport, Mr Joe Maswanganyi, has welcomed the recent North Gauteng High Court Judgment, which reviewed and set aside the contract for locomotives that had been awarded by PRASA to Swifambo Rail Agency (Pty) Ltd. The judgment further directs that Swifambo Rail Agency (Pty) Ltd, pay the costs of the court application including the employment of three counsel. Government as a sole shareholder has the responsibility to ensure that PRASA delivers on its core mandate and that such delivery is underpinned by prudent and good governance principles. [There is still a long way to go before we see this issue resolved - editor]

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www.railwaysafrica.com 29 2016/11/01 12:52 PM

AFRICA UPDATE

SWAZILAND RAILWAY SUCCESSFULLY TRANSITIONS FROM ISO 9001:2008 TO ISO 9001:2015 In March 2012 after a strategic decision to obtain the ISO 9001 certification as a means of demonstrating the commitment to fulfilling the organisation's promises to its customers, Swaziland Railway has been successful in gaining the certification by TUV Rheinland an international standard, following a three year journey, which commenced in 2009. ISO 9001 is the world’s most popular quality management standard, which was updated in 2015 to make sure it reflects the needs of a modern-day business. ISO 9001 is an excellent framework to help manage the business effectively so that Swaziland Railway can be operationally resilient, build long-term success, and ensure customer satisfaction. ISO 9001:2015 is the new business improvement tool that has helped in driving continual improvement and deliver results for the organisation. It has helped Swaziland Railway to stand out, gain a competitive edge, and grow. Swaziland Railway will implement all improvement opportunities through conducting internal audits while continuously creating awareness to employees on the importance of meeting customer requirements in line with our quality policy and objectives.

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HUAWEI AND PRASA LAUNCH SOUTH AFRICA’S FIRST GSM-R RAIL NETWORK OPERATION Huawei and the Passenger Railway Agency of South Africa (PRASA) jointly announced the first rail operational Global System for Mobile Communications-Railway (GSMR) network. The GSM-R system is a digital train to ground communication system following the international wireless GSM standard and EIRENE specifications for railway communication and applications. The GSM-R system put into operation is a sub-system of the European Rail Traffic Management System (ERTMS) and is used for operational voice and mission critical data communication between train and control centres. GSM-R is considered as the standard in railway communication and is widely used across the world. In 2013, Huawei in consortium with Altech Alcom Matomo was awarded the contract to supply PRASA with the latest digital wireless communication system for their commuter railways. Since then, PRASA and Huawei have worked in close partnership to deploy the first GSM-R network in South Africa, which spans over 800km and 152 stations across the country. The Huawei-Alcom Consortium (HAC)’s end-to-end GSM-R solution offers mission critical rail operational voice and data functions which enable train drivers, controllers, signalling engineers and crew members to perform day-to-day railway operations more efficiently and reliably. It will also provide communication services to automatic train protection systems and introduce the ability for semi-automatic train driving capacity in the network, thereby further improving reliability and safety of the rail operation. In turn, this will significantly improve customer satisfaction and safety for all passengers. The solution is composed of state-of-the-art IP soft switch core network that dramatically improves data transmission efficiency, simplifies network management tasks, reduces operating costs, and supports smooth evolution from the legacy to the Future Railway Mobile Communication Systems (FRMCS) which is currently being specified by the International Union of Railways (UIC). Huawei’s well known distributed base station technology implements quick and flexible GSM-R network coverage in places such as Railway Servitude including tunnels, cuttings and at level crossings. In addition, multiple Remote Radio Unit (RRU) co-cell technology has been applied to expand cell coverage, reduce cell handovers and saves on a large amount of optical fibre resources. At the same time, this improves radio quality compared to conventional solutions. To enable ultra-long-distance GSM-R radio coverage across provinces, ensure reliable railway operation and facilitate interworking between multi-vendor devices, an endto-end, network-wide redundancy design was implemented. The base transceiver stations (BTSs) of the access network form a ring topology to protect against faults in transmission links through transmission network redundancy. Additionally, base station controller (BSC) were deployed for each of the three regions (occupied by Western Cape, Kwa-Zulu Natal and Gauteng) accommodating for BSC remote disaster recovery procedures, further improving the resiliency and reliability of the GSM-R network. Huawei’s solution adopts patented hot-standby mechanisms for all network elements (NEs) of the GSM-R network and co-site dual-network technology, coupled with a Synchronous Digital Hierarchy (SDH) network. “We are proud to share this historic milestone with Huawei - HAC. This partnership has been instrumental in enabling PRASA to achieve its railway operation improvement objectives in order to ensure that we deliver dignified rail services to all our people,” said Mr Piet Sebola, PRASA Group Executive of Strategic Asset Development. Chairman of the eLTE Industry Alliance and Marketing Director of the Transport Sector for Huawei Enterprise Business Group, Norman Frisch, says “Huawei’s GSM-R system will help not only the South African railway network enter the cutting-edge digital age, but will also play a pivotal role in the planning and building of future railway networks across South Africa and its neighbouring countries.” Huawei’s rail solutions cover 100,000km of railway around the world and serve over 50 urban rail lines and more than 60 partners in the railway industry. With the principle of "Openness, Cooperation and Win-Win", Huawei is committed to their collaboration with partners for comprehensive and joint innovation in building end-to-end solutions to drive railway companies towards digital transformation.

30 www.railwaysafrica.com

COEGA REFLECTS RISE IN AFRICAN FDI Investment in the Coega Industrial Development Zone (IDZ) reflects the positive trends identified in the recently unveiled Africa Attractiveness Index (AAI) & Foreign Direct Investment (FDI) 2017, this is according to Dr Ayanda Vilakazi, at CDC.

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South Africa was ranked first in Africa for Investment in infrastructure and logistics, second for Economic diversification and 33 for Macroeconomic resilience. During this period the Coega IDZ attracted 16 of these investors against a target of 7, with a combined investment value of R11.69 billion against a target of R1,1billion. Dr Ayanda Vilakazi attributes this success to the attractiveness of South Africa as a top FDI destination in Africa for the past years, as well as the Coega SEZ value proposition.

BAIC SA Plant artist impression, a R11 billion investment in the Coega SEZ and the biggest single automotive investment in Africa in 40 years.

The research by FDI Markets shows a 31.9% growth in foreign capital investment in Africa between 2015 and 2016, owing to capitalintensive projects in the real estate, hospitality and transport/logistics sectors. This supports the Africa Attractiveness Index report, which identified 676 new foreign direct investment (FDI) projects in Africa in 2016. In 2017, South Africa was ranked the second most attractive country in Africa for FDI, down from its top ranking position in 2016, now occupied by Morocco. South Africa retains its top ranking in Africa as a destination for projects, with 139 projects in 2016 compared to 130 in 2015; followed by Morocco (81) and Egypt (79). South Africa with 28 projects originating from the US, continued to be the main target of US-based firms, followed by Morocco with 14 projects and Egypt with 13 Continues on page 32

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AFRICA UPDATE

Continued from page 31

projects. France invested in 81 projects in Africa to become the second largest investor in the continent after the US (91 projects). China was the third with 66 projects and South Africa was sixth (29 projects). Although the share of African intra-regional investors FDI projects continue to decline, South Africa outperformed Kenya to resume the role of being Africa’s leading intraregional investor owing to a decrease in Kenya’s outbound FDI projects in 2016. “The purpose-built Coega IDZ which is integrated into the deep water port of Ngqura is part of the country’s leading edge in logistics and infrastructure. Furthermore, one of the major strengths of the Coega IDZ is that all the necessary infrastructure and zoning is in place, which reduces the time to market by months or years,” says Vilakazi. Coega is attracting investors in all the main growth sectors identified namely technology, media and telecommunications, consumer products and retail, business services, transport and logistics and automotive. Currently, the Coega IDZ has 40 operational investors, which have contributed a cumulative investment of R7.0 billion. “A positive for the Nelson Mandela Metro and Eastern Cape is that we are seeing less reliance on the automotive sector to create jobs and economic growth. Our new investors include a lighting plant, logistics operators, green energy companies, business process outsourcing, pharmaceutical firms and agro-processors,” says Dr Vilakazi. Although ranked third in terms of the number of projects in Africa, China’s contribution to economic growth in Africa (66 projects) represents a 106% growth from 2015 (32 projects). A major Chinese investment in the Coega IDZ in 2016 was the R11 billion BAIC vehicle assembly plant. In addition, First Automotive Works (FAW) is assembling commercial vehicles at its R600 million facility in the IDZ. However, “we are in negotiation with a number of other Chinese investors,” says Vilakazi. The other major sources of investment in Coega are India, Germany, France and the United States. “This is also a confirmation of the EY Africa Attractiveness Index, which puts the United States as the top FDI investor in Africa measured by the number of projects, followed by France and China. “South Africa is ranked sixth, which makes it the leading African country investing in the continent. Companies are able to use the Coega IDZ as the gateway from which to expand into Africa due to its logistics connections to the rest of the continent,” concludes Vilakazi. 32 www.railwaysafrica.com

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BAKARA OUT OF BUSINESS RESCUE In June 2015, PRASA’s board suspended contracts with service providers and stopped outstanding payments to them, in this particular instance, PRASA owed Bakara just over R9 million. Payments by PRASA were halted because of the implementation of the Public Prosecutor’s report and resultant investigations by the Auditor General and the Hawks. At the time Bakara had a staff of 43, deployed in three maintenance depots on ad-hoc contracts, including in Durban as part of the Bombardier Africa Alliance consortium on the resignalling contract and in the office in Langlaagte. The company’s turnover for the financial year ending March 2015 was R43 million with PRASA being by far the largest debtor. In October 2015 Bakara filed for business rescue, a practitioner was appointed and the Business Rescue Plan accepted by all stakeholders on 11 December 2015. This resulted in the following: • Bakara lost 35 staff mainly through retrenchments • The company withdrew from the Durban Resignalling contract • Turnover fell to R6-m for the year ended March 2017. Bakara survived the business rescue process and closed out on 22 June 2017, 12 months after the target date set in the business rescue plan and approximately R1 million poorer than planned. PRASA eventually paid the full amount owing. This places Bakara in a category of less than a 5% of “successful” implementations of business rescue, depending on how success is measured. Business rescue falls under Chapter 6 of the Companies Act of 2008 and is designed to afford protection from legal action

to financially-distressed businesses whilst a turnaround strategy is being implemented. It is currently being reviewed by the dti to address the much-publicised shortcomings that result in such a high failure rate. Most cases result in liquidation after the practitioners have taken their fees. Bakara is engaging with several bodies to provide feedback on the experience including the SA Institute of Directors, the SA Institute of Chartered Accountants who are assisting the dti to revise the section of the Act and the University of Pretoria who is researching the fees charged by practitioners. The company is also considering the Law Society and the Turnaround Management Association who, having the facts may be able to influence the behaviour of their members involved in business rescue and hopefully increase the success rate. The fundamental problem is that there is no incentive for the practitioner to implement the plan swiftly and until this is changed, the high rate of failure will persist. Bakara survived by filing for business rescue and through the efforts of the directors who pressurised PRASA for payments right up to the acting Group CEO and by attracting new shareholders to recapitalise the business. The investors bought shares in spite of the company being in business rescue. Liquidation was the only other alternative and was never considered. There are lessons to be learned and Bakara is willing to share these with other financiallydistressed companies. [My congratulations to everyone at Bakara, Reg, you are a stalwart and should be very pleased with the outcome, despite the many challenges. I wish you all the best as you assist in developing a better chance for others that may have to walk this path. - Editor]

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AFRICA UPDATE

RAILWAYS AFRICA

GE SIGNS US$575 MILLION AGREEMENT WITH MINISTRY OF TRANSPORTATION AND EGYPTIAN NATIONAL RAILWAYS TO HELP TRANSFORM RAIL INFRASTRUCTURE IN EGYPT GE to supply 100 locomotives and 15-year parts agreement to support Egypt’s transportation and infrastructure needs GE recently announced that it had signed a Letter of Intent with the Ministry of Transportation (MoT) and Egyptian National Railways (ENR), worth US$575 million, to supply 100 GE ES30ACi Light Evolution Series Locomotives that can be used for both passengers or freight rail, as well as a 15-year agreement for parts and technical support for GE locomotives in ENR’s new and current fleet. The agreement, which is the largest ever between the parties, also includes technical training aimed at improving local capabilities and technical skills for more than 275 ENR engineers and employees in the region. This strategic agreement reflects GE Transportation’s efforts to deepen and transform its global presence, meet international customers’ needs, and capitalise on the strong opportunity for international growth that’s critical to continued success. GE ES30ACi Light Passenger Evolution Series Locomotives are equipped with a 12-cylinder, 3,200 horsepower GE Evolution Series engine. The locomotive delivers high power output to enable enhanced productivity and flexibility in heavy haul operations, as well as enhanced reliability. The locomotives can be used to transport passengers or freight. GE has been a committed partner to Egypt for over 40 years. With more than 700 employees in the country, GE works with its partners in the public and private sector to bring its latest technologies and solutions to serve the transportation, aviation, oil & gas, power and healthcare sectors. This agreement builds on our long-standing partnership with the Ministry of Transportation and ENR.

CDC EXPRESS INTEREST PARTNERING GIIF TO INVEST IN GHANA The Commonwealth Development Corporation (CDC) and the Ghana Infrastructure Investment Fund (GIIF), following meetings in London have expressed their interest to co-invest in developmental projects in Ghana. Projects such as railway infrastructure, power projects (generation and distribution), general infrastructure needs among others were under discussion for the investment. The visit was part of activities organised by the UK-Ghana Chamber of Commerce (UKGCC) with a big conference where over 250 British investors interested in Ghana met and deliberated on business opportunities in Ghana.

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AFDB TO SUPPORT MOZAMBIQUE SMES IN THE CONSTRUCTION SECTOR ALONG NACALA CORRIDOR The African Development Bank’s Board of Directors has approved a US$1 million African Private Sector Assistance Fund (FAPA) grant to the Government of Mozambique to finance the Nacala Corridor Business Linkages Technical Assistance Project.

improving the efficiency and competitiveness of SMEs in the construction sector situated in the Nacala Corridor to enable them to take advantage of business opportunities provided by the Nacala rail and port projects and other large construction investments.

The project is in line with the Bank’s effort to promote inclusive private sector development and SME linkages with large investments. It also aims to promote corridor economic development through the integration of economic activities within infrastructure development along the Nacala corridor.

Over the next three years, the project will: • Strengthen the business management skills, industry knowledge and know-how of selected SMEs in the construction industry through training, coaching, mentorship and other support activities to help them attain competencies required to satisfy the requirements and standards of larger partner companies.

The Bank has made various infrastructure investments to support the Nacala corridor. To strengthen the inclusiveness of these investments, the Bank designed two technical assistance projects, a value addition project in Malawi and a business linkage project in Mozambique. The Mozambique Nacala Corridor Business Linkages Technical Assistance Project is aimed at

•

Provide institutional capacity building, knowledge, expertise and tools to SME support institutions to enable them to continue supporting SMEs in the construction industry at the end of the technical assistance. Build strong networks and stakeholder platforms for

the construction sector’s continuous dialogue with the government, banks, insurance, tax administration, training institutions and the large private sector operators on various aspects that will further business growth in Mozambique. FAPA is a multi-donor thematic trust fund that provides grant funding for technical assistance and capacity building to support the implementation of the Bank’s Private Sector Development Strategy. The Governments of Japan and Austria and the African Development Bank, are active contributors to the fund, which to date has provided over US$51 million to 65 projects (24 of which are regional projects with 41 others located in 24 individual countries across the African continent). The FAPA portfolio includes projects aimed at improving the business environment, strengthening financial systems, building private sector infrastructure, promotion of trade and development of micro, small and medium enterprises.

SIGNIFICANT RAIL EMPOWERMENT DEAL – IKUSASA RAIL WBHO and Faku Family Enterprises (FFE) have announced the purchase of Grindrod Rail Construction and Grindrod Rail Construction South African (GRCSA) entities. They have now met all conditions precedent and have received full Competition Commission Approval (without conditions), ensuring that the sale is now 100% effective. The acquisition of the majority shareholding by FFE of the GRCSA entity has established iKusasa Rail SA as a 75% black- owned company (40% Black Women owned) which is aligned with the government’s transformation strategy. The name of the company will officially be changed to iKusasa Rail to signify the exciting new chapter for the company. FFE is a 100% black owned (62% black female owned) investment holding Company with various interests ranging from oil and gas, retail, property and logistics. Mr Mkhuseli Faku, the newly appointed Chairman of iKusasa Rail, has stated that this acquisition fits into the FFE group strategy of diversifying its product mix and sees the entry into the rail space as an exciting opportunity. “The name ‘iKusasa’ is synonymous with tomorrow, and I am confident that tomorrow will bring significant growth and opportunity”, said Faku.

34 www.railwaysafrica.com

WBHO, listed on the Johannesburg Stock Exchange, is one of the largest construction companies in Africa with experience in major construction projects in Africa and Australia. Construction activities, which cover the full spectrum, are divided into three main operating divisions, namely Building Construction, Civil Engineering and Roads and Earthworks. Richard Smith, Director of Roads and Earthworks, said “This acquisition will further diversify our offerings and allow the group to offer complete infrastructure solutions throughout Africa.” “WBHO’s experience in major projects in Africa, FFE’s empowerment credentials and GRC’s reputation as an industry leader in rail track construction, rehabilitation, electrification and maintenance, makes this transaction a perfect fit. I wish all the players in the newly formed iKusasa Rail all the very best,” said Bongiwe Ntuli, CEO Grindrod Freight Services. iKusasa Rail will now be a leading empowered rail, construction, maintenance and overhead traction equipment (OHTE) company with over 60 years of rich history of delivering quality rail projects into Africa.

COMPANY NEWS

RAILWAYS AFRICA

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Metric Automotive Engineering operate a custom engineered, one-of-akind machine capable of accommodating crankshafts with lengths of over six metres.

Africa’s Largest Crankshaft Polisher At Metric Leading diesel engine component remanufacturer Metric Automotive Engineering is once again ahead of the curve, installing and commissioning the largest crankshaft polishing machine in Africa. “This custom engineered, one-of-a-kind machine is capable of accommodating crankshafts with lengths of over six metres,” says Andrew Yorke, operations director at Metric Automotive Engineering. “It represents our philosophy of investing in the latest bespoke and best practice technology so that we can offer our customers around Africa a world-class standard of service,” Yorke says that while crankshafts have traditionally been ground and then polished on grinding machines, this is certainly not the ideal solution. “Polishing debris contaminates the crank grinding machine and this can lead to accelerated wear on critical areas of the machine,” he says. “Moreover, not all crankshafts need to be both ground and polished; some only need polishing, and doing this on a grinding machine is not the best use of this asset.”

36 www.railwaysafrica.com

Metric Automotive Engineering’s dedicated polishing machine will significantly raise the company’s productivity, enabling even more rapid turnarounds on those crankshafts that require only polishing and not grinding. “We will also employ this machine to polish camshafts after the re-profiling of the component, or if the journals and lobes only require a polish and not a re-profile,” says Yorke. “Polishing of these components after grinding is vital, as it removes grinding burrs and ensures that the surface finish is ideally matched to the requirements of the bearing materials they run on.” He emphasises that, in the case of crankshafts and camshafts, there are journals, which run on the bearings and lobes which have roller followers carrying high loads. These require the best possible surface finish in order to prevent roller skidding or seizure. “By polishing these journals and lobes to the correct surface finish, we can return them to OEM specification or better,” he says. “In turn, this leads to improved component performance and longer engine life.”

The company remanufactures heavy diesel engine components for a range of different end-user industries and has developed a long and impressive track record over almost 50 years. It has generated its extensive capabilities by staying abreast of the latest global developments in diesel engine technology. To ensure the highest standards and expertise, it also maintains close affiliations to the leading diesel engine OEMs. Repairing and remanufacturing modern diesel engine components to their original OEM specification is an exacting science, says Yorke, and requires long-term development of expert skills and ongoing investment in specialised equipment like this state-of-the-art polishing unit.

Metric Automotive Engineering remanufactures heavy diesel engine components for a range of different end-user industries, and has developed a long and impressive track record over almost 50 years.

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AFRICA UPDATE

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MTU ENGINE FOR TRANSNET’S TRANS-AFRICA LOCOMOTIVE MTU 16V 4000 R43R powers first prototype of Transnet’s Trans-Africa Locomotive Rolls-Royce recently showcased its MTU Series 4000 engine which is powering the first prototype of Transnet’s new Trans-Africa Locomotive (TAL). Africa’s first ever, locally designed, engineered and manufactured locomotive by Transnet Engineering. Ideally suited for the African climate and structural conditions. The MTU 16V 4000 R43R engine delivers a power output of 2000 kW and fulfils the strict EU IIIA emissions regulations. MTU has been involved in the project from the onset, first with Transnet Engineering’s initial clarification meetings, and then the prototype development.

ACQUISITION OF CONSMIN BY TMI – GOOD FOR GHANA RAILWAYS Further to the announcement on 8 May 2017, the acquisition of Consolidated Minerals Limited by China Tian Yuan Manganese Limited a subsidiary of Ningxia Tianyuan Manganese Industry Co., Ltd. (“TMI”), is at the end of May complete. Consmin forms a key part of TMI’s own growth plans and the company is expected to benefit significantly from TMI’s commitment to invest in the growth of the company’s operations and in infrastructure and corporate social responsibility (“CSR”) projects in Ghana. Consmin plans to develop railway infrastructure including the upgrade of the railway from Tarkwa to Takoradi, in support of new port facilities at Takoradi and will IECHolden_506_ad_RA_180x120_traction-V2.pdf 1 continue 2016/02/09 with 1:04the PM Pit-C North resettlement plan.

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NEW FINANCING TO IMPROVE EFFICIENCY AND CAPACITY AT PORT OF DAR ES SALAAM The capacity of the Port of Dar es Salaam will be increased to 25mt over the next seven years following the World Bank Board of Executive Directors’ approval of a US$345 million credit and a US$12 million grant to the new Dar es Salaam Maritime Gateway Project (DSMGP). The investments in the Port will also improve waiting time to berth from 80 hours to 30 hours as well as overall productivity. The DSMGP is to be implemented as part of a larger ongoing investment programme for the overall development of the Port of Dar es Salaam with the support of several development partners. The

Government of Tanzania is contributing about US$63 million through Tanzania Ports Authority, while Trade Mark East Africa is supporting improvements in the spatial and operational efficiency of the port currently, through the rehabilitation of access and egress roads and demolition and relocation of sheds. The United Kingdom through its Department for International Development (DFID) are also contributing a US$12 million Grant. This support will co-finance the activities in the DSMGP, and further support is available for capacity building programmes in institutions like Bandari

College, the vocational training facility run by TPA, the Dar Maritime Institute, and the College of Engineering and Technology at the University of Dar es Salaam. The Port of Dar es Salaam currently has 11 berths, with seven of these dedicated to general cargo (including container, dry bulk, breakbulk and RoRo operations) and four to container operations. The Port handled 13.8mt in 2016, up from 13.1mt in 2013, and 10.4mt in 2011, reflecting an average growth of 9% per year over the last five years. While recent numbers indicated a slowdown,

the respite is likely to be short-lived as projections for the long term suggest the Port’s volumes could double, from the current 14mt to 38mt by 2030, in an unconstrained scenario. The DSMGP has two main components: the improvements to the physical infrastructure which involve the deepening and strengthening of Berths 1 to 11; the construction of a new multipurpose berth at Gerezani Creek; the deepening and widening of the entrance channel and turning basin; and the improvement of rail linkages and platform in the port.

UPGRADE OF SITARAIL The Governments of Côte d'Ivoire and Burkina Faso and SITARAIL formally signed an agreement to lift the last conditions precedent of the revised concession agreement for the management and operation of the concession.

The impact of the railway, an essential regional integration tool, for the benefit of the populations and regions crossed, will be considerably strengthened, which will make it possible to intensify rail transport and absorb new import/export flows.

In the first phase, SITARAIL will invest more than €250 million over four years, dedicated to the renewal of the network infrastructure and to the modernisation and expansion of the rolling stock fleet intended for the transport of passengers and goods.

Increasing the performance of rail transport will increase the logistics capacity of the Port of Abidjan.

SITARAIL will undertake the complete renovation of 200km of railway tracks and numerous railway stations in order to modernise them, streamline the exchange of goods and people and reduce transit times between the two countries.

38 www.railwaysafrica.com

This commitment of Bolloré Transport and Logistics in the future of SITARAIL is in line with its strategy of multimodal investment and integration of the logistics chain, which starts from the port terminal to the final destination via rail or the road.

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AFRICA UPDATE

PRIVATE SECTOR TO FULLY PARTICIPATE IN THE DESIGN AND IMPLEMENTATION OF INFRASTRUCTURE DEVELOPMENT PROJECTS Stakeholders from the Northern Corridor Member States of Burundi, DR Congo, Kenya and Uganda who attended the 2017 annual joint Technical Committee meetings on Infrastructure Development and Management and Private Sector Investment Promotion commended the Northern Corridor Member States’ firm commitment to accord the Private Sector a larger role and full involvement in the infrastructure development, trade and logistics chain with the aim of fast-tracking sustainable and economic development in the Region. Stakeholders discussed and shared best practices on how to enhance the Private Sector participation in the design of transport infrastructure development projects namely: • Rehabilitation and upgrading of roads; • The Standard Gauge Railway; • Development of Road Side Stations; • Development of the integrated inland waterways transport system; • Development of Port facilities and pipeline developments; • Public-Private Partnerships institutional framework and initiatives; • Cross-Border Trade Facilitation Programmes and Joint Transport and Trade Facilitation Committees in the Great Lakes Region as well as the Promotion of the Northern Corridor Green Freight Programme. Delegates were also taken on a guided tour visit at the Port of Bujumbura which is the biggest on Tanganyika Lake as it handles 500,000 tonnes per year. Since 25 December 2012, the Government of Burundi granted a 30-year management concession of the Port of Bujumbura to Global Port Services Burundi (GPSB) with an option to renew the contract for another 30 years. According to the Maritime Authority in Burundi, the bulk of external trade (80%) is routed through the Port of Bujumbura.

We design and fabricate bogies that are lighter for greater efficiency.

Participants at the 8th technical Committee meeting on Private Sector Investment Promotion and 11th Technical Committee Meeting on Infrastructure development and Management held in Bujumbura, Burundi, from 15-19 May, 2017.

Some Members of the RSS Task Force Team in Burundi.

For more information, visit www.dcd.co.za

That’s amazing!

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AFRICA UPDATE

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SWAZILAND RAIL LINK PROJECT RAILING AHEAD

THE REPUBLIC OF INDONESIA AMONG POTENTIAL INVESTORS FOR SENEGAL RAILWAY DEVELOPMENT

The preparations of the Swaziland Rail Link (SRL) are now at an advanced stage with the realisation of the 150km long railway line being more realistic on a daily basis. The SRL is the development of a line linking South Africa and Swaziland thereby decongesting the Coal line and unlocking capacity on the eastern mainline and the North South Corridor.

Senegal plans to build 1,500km of new railway lines by 2035. Such projects require funding from outside partners, and Indonesia is among the investors who have expressed their willingness to participate in the achievement of this objective.

Speaking at the Southern African Railways Association, the SRL Programme Director on the South African side Mr Wilson Mogoba said that feasibility studies of the Greenfields are complete and the authorities in South Africa and Swaziland have granted the environmental permits. Mr Mogoba reported that the authorities in South Africa and Swaziland have granted a water use license and the funding structure of the project is being finalised. “In South Africa, the purchasing of 506 hectares of land has been approved and is ongoing and the approval to exhume over 120 graves. The plans to resettle the affected households are also in progress as well as the feasibility studies on the brownfields. Significant work has been conducted in Swaziland with over 510 graves exhumed and we are still going to resettle and relocate 235 affected households” said Wilson. The SRL is envisaged to overcome over 4.93 mtpa capacity constraints and have up to 36mtpa, using 20t/a. The North-South corridor capacity will be up to 45mtpa using 20t/a. According to Mogoba the realisation of this link will see export coal capacity to be more than 100mtpa, using 26t/a. This strategic link will also serve as a backup to the coal line. The introduction of SRL is expected to have many positive spin-offs to SA, Swaziland and the SABC region. This will enhance rail infrastructure that will be a catalyst for regional economic development and improve integration for the over border logistics between SA, Swaziland and Mozambique, thus promoting the growth of intra-African trade. The link will also assist Transnet on its road to rail migration strategy. This mega project is estimated to have business opportunities to the value of R894 billion in SA and R1.7 billion in Swaziland and create approximately 263 and 364 permanent jobs in Swaziland and South Africa respectively. Tender documents are to be issued shortly.

40 www.railwaysafrica.com

During his visit to Senegal, Abdurrahman Mohammad Fachir, Deputy Minister of Foreign Affairs of the Republic of Indonesia, announced his country's willingness to accompany Senegal in its railway projects. At a hearing with Abdou Ndéné Sall, Secretary of State for the National Rail Network, Abdurrahman Mohammad Fachir said that his country has good railway experience. The Secretary of State indicated Senegal's willingness to work with the Republic of Indonesia.

CRBC CHAIRMAN LU SHAN MEETS WITH HIS EXCELLENCY MAHAMUDU BAWUMIAVICE PRESIDENT OF GHANA Towards the end of June, CRBC Chairman Lu Shan met with his Excellency Mahamudu BawumiaVice President of Ghana who visited China in Diaoyutai State Guesthouse. Both parties had an in-depth discussion regarding the promotion of infrastructure construction in Ghana. CRBC Chairman Lu Shan introduced to his Excellency Mahamudu Bawumia the overall operation situations of CRBC, especially its business development and operation network in Africa, and emphatically elaborated the completion and operation of MombasaNairobi SGR. He noted that CRBC is willing to apply the experience and operation methods of the Mombasa-Nairobi SGR in Kenya to the railway projects in Ghana, and offer infrastructure projects in Ghana with a package of solutions by cooperating with Ghana in a variety of ways. His Excellency Mahamudu Bawumia noted that CRBC is encouraged to expand the businesses and undertake infrastructure projects in Ghana and that CRBC is expected to provide financing support for the implementation of infrastructure projects in Ghana by utilizing its advantages. Meanwhile, he extended his thanks to CRBC for its open position and hoped that both parties could extensively discuss the concrete proposals for the details and financing of cooperative projects in multiple sectors.

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AFRICA UPDATE

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HUAWEI DIGITAL RAILWAY SOLUTION SUPPORTS NEW MOMBASA-NAIROBI RAILWAY Huawei, recently announced that the railway operational communications network it built for Kenya's Mombasa-Nairobi rail project is now in commercial use. Huawei's Digital Railway Solution enables multiple communications tasks, including mission-critical train dispatch, emergency communications, section maintenance communications, secure transmission, and ensures stable power supply along the entire line. The solution meets the customer's requirement for safe, stable, and efficient railway operations and ensures highly reliable communications for the railway. As the first new line that has been constructed in Kenya for the past century, the Mombasa-Nairobi railway runs across Kenya's territory from the southeast to the northwest, starting from Mombasa, the biggest port along the east coastline of Africa, to Nairobi, Kenya's capital and the largest city in East Africa. The line has a pivotal role in East Africa's railway network and has paved the way for standard-gauge rail links in the area. The line is part of a long-term plan to connect a vast network of rails from Kenya, through Uganda and Burundi, and up to South Sudan. This railway artery in East Africa will provide convenient transportation and promote regional collaboration, integration, economic growth, and social development. The high speeds and short departure intervals of modern railway require secure, stable and reliable train

operations. Huawei's Digital Railway Solution provides the MombasaNairobi Railway with a full suite of core systems such as a highlyreliable, industry-leading railway operational communications system, a large-bandwidth unified transmission system which adopts soft and hard pipes to protect train control and other mission-critical services, a modular and highly efficient power supply system, and an environment monitoring system which enables great scalability and intelligent management. The core systems ensure safe train operations. Huawei's next-generation GSM-R solution has been deployed to build the train-to-ground communications network. With end-to-end redundancy backup and 99.999% availability, the network guarantees stable transmission of train control signals. Based on mature hardware platforms, the next-generation BTS3900 GSM-R base stations support smooth migration to LTER. The transmission network uses Huawei's cutting-edge Hybrid MSTP transmission devices that support SDH/IP dual planes. The SDH hard pipes and IP soft pipes comprehensively bear multiple services without compromising the reliability of mission-critical service transmission. In addition, Huawei's

premium communication power supply and Uninterruptible Power System (UPS) products are installed to meet diversified customer requirements on backup power, ensuring high-quality power supplies for communications systems, data centres, security systems, and other critical loads. The safe and efficient operations of the Mombasa-Nairobi Railway will provide significant support for Kenya's passenger and freight transportation, and thus the economic growth. At the same time, the railway will bring East African economies closer to each other.

UNLOCK THE POTENTIAL OF AFRICAN ENTREPRENEURS African governments need to integrate entrepreneurship more fully into their industrialisation strategies, according to the African Economic Outlook (AEO) 2017. In 2016, Africa’s economic growth slowed down to 2.2% from 3.4% in 2015 due to low commodity prices, weak global recovery and adverse weather conditions, which impacted on agriculture production in some regions. However, it is expected to rebound to 3.4% in 2017 and 4.3% in 2018. This assumes that as commodity prices recover, the world economy will be strengthened and domestic macroeconomic reforms are entrenched. In fact, there are promising developments across the continent. Africa’s growth increasingly relies on domestic sources, as shown by dynamic private and government consumption that combined, accounted for 60% of growth in 2016. This growth also coincides with progress in human development: 18 African countries had

achieved medium to high levels of human development by 2015. Finally, foreign direct investment, attracted by the continent’s emerging markets and fast urbanisation, stood at US$56.5 billion in 2016 and is projected to reach US$57 billion in 2017. Such investment has diversified away from the natural resources sector to construction, financial services, manufacturing, transport, electricity, and information and communication technology. Still, progress remains uneven. African governments need to push their agenda for job creation with more ambitious and tailored policies. Despite a decade of progress, 54% of the population, in 46 African countries are still trapped in poverty across multiple dimensions – health, education and living standards. Demands for better employment opportunities are the main reason behind continued public protests, having motivated a Continues on page 42 www.railwaysafrica.com 41

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third of all public demonstrations between 2014 and 2016 – albeit in a context of decreasing levels of civil unrest. With the size of the workforce likely to increase by 910 million between 2010 and 2050, creating more and better jobs will remain the core challenge for African policy makers. To turn the challenge of higher population growth into an opportunity, making Africa’s new industrial revolution successful is paramount. Twenty-six African countries have an industrialisation strategy in place. But most of these strategies tend to emphasise the role of large manufacturing companies at the expense of entrepreneurs in sectors with the potential for high growth and employment creation, including start-ups and small and medium-sized firms. Businesses with fewer than 20 employees and less than five years’ experience provide the bulk of jobs in Africa’s formal sector. Additionally, the advent of digital technologies and new business models is blurring the boundaries between manufacturing, which, is now bouncing back at 11% of Africa’s GDP. Industrialisation strategies thus need to support other sectors where African economies have a comparative advantage, such as agri-businesses, tradable services and renewable energy. New strategies need to avoid dependence on businesses that are not environmentally friendly. According to the Outlook, Africa has a high-untapped potential for entrepreneurship. In 18 African countries for which statistics are available, 11% of the working-age population set up their own firms to tap specific business opportunities. This level is higher than in developing countries in Latin America (8%) and in Asia (5%). However, few of them invest in high-growth sectors, grow to employ more workers or introduce innovations to markets. To turn their dynamism into an engine of industrialisation, African governments can improve the skills of workers to enhance the efficiency of business clusters – such as industrial parks and special economic zones – and increase access to finance, with more affordable credit and more innovative instruments, for small and young firms. For the full report, including statistics and 54 individual African country notes, please visit www.africaneconomicoutlook.org 42 www.railwaysafrica.com

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LOCOMOTIVE REMANUFACTURING: UNLOCKING VALUE IN OLD LOCOMOTIVES FOR FUTURE REVENUE In a Joint press statement - Zambia Railways Limited (“ZRL”) has awarded a contract to a Malaysian based rolling stock company, SMH Rail Sdn Bhd (“SMH Rail”) to undertake the remanufacturing of ZRL’s ten (10) units of U20C Class locomotives. SMH Rail, a leading rolling stock company, has carved its name in the African rail market with its proven track record in the successful remanufacturing of Tanzania Railways Limited’s ageing locomotives. Locomotive remanufacturing works are currently being carried out at ZRL’s facility in Kabwe under the direct supervision of key engineering personnel from SMH Rail. The business venture with SMH Rail revolves around the concept of collaborative effort whereby ZRL’s personnel will be given the requisite training and knowledge on the remanufacturing works. Remanufacturing works are carried out at ZRL’s own premise thus promoting localisation and providing local employment opportunities. The experience and exposure gained from this venture will equip ZRL’s personnel to handle future maintenance works. In addition to the localisation effort and transfer of technology, the remanufacturing project underlines the importance of cost structure wherein the price of the newly remanufactured locomotive is attractively priced to suit budgetconstrained railway operators in this region. The price of a remanufactured locomotive is substantially lower than the price of a newly built locomotive. These pragmatic cost-effective options are seen as a viable business proposition to resolve the common issues currently faced by many rail operators in Africa to replace their ageing locomotives that are running on high fuel consumption. ZRL is pleased to announce that its first U20C Class remanufactured locomotive, which was commissioned in October 2016, is in operation with no breakdown failures and currently hauling 1,400 tonnes of copper. The successful operation of ZRL’s first remanufactured locomotive is a further testament that the deployment of remanufacturing technology, though relatively new in this region, is a workable solution to revive ageing locomotives at the most cost effective manner. The completion of the remaining remanufactured locomotives in the near future is expected to contribute positively to the operational profitability of ZRL.

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AFRICA UPDATE

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PROJECT UPDATE: AWASH-WOLDIYA/HARA GEBEYA AND WOLDIYA/HARA GEBEYA-MEKELLE RAILWAY PROJECT

According to the Ethiopian Railway Corporation, 54% of the Awash-Woldiya / Hara Gebeya Railway Project and 46% of the Woldiya / Hara Gebeya-Mekelle Railway Project have been completed. The projects reached this stage in two years; 250km of track out of 390km of the Awash-Woldiya / Hara

Gebeya railway line has been installed. To date, the rail projects have created job opportunities for more than 5,000 people. The first phase of the Awash-Woldiya / Hara Gebeya Railway Project is scheduled to start testing by the end of August.

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UNTU DEMANDS MAXIMUM SENTENCE OF 30 YEARS IMPRISONMENT FOR CABLE THIEVES The United National Transport Union (UNTU) recently demanded that the prosecutors of the National Prosecution Authority (NPA) must appeal to the Court to impose the harshest sentences prescribed by the Criminal Matters Amendment Act, 2015 on cable thieves after cable theft contributed to the train collision near the Elandsfontein station on 1 June. John Pereira, Acting General Secretary of UNTU, says: “The Union has learned that the trains had to operate via authority numbers when they collided. The signals they were supposed to be working on, were not working due to cable theft.” There is no doubt that this tragic incident could have been prevented if the cables had not been stolen and the signals were working. The Criminal Matters Amendment Act reads that any person who unlawfully and intentionally tampers with, damages or destroys essential infrastructure or conspires with or assists another person to do so and who knows or ought reasonably to have known or suspected that it is essential infrastructure, is guilty of an offence and is liable on conviction to a period of imprisonment not exceeding 30 years.

NEW CONTRACTS: GRINDROD RAIL CONSTRUCTION Grindrod Rail Construction (GRC) in Mozambique has successfully concluded the negotiations of a variation order to the existing works currently being constructed in the Port of Maputo for DP World.

The variation order includes works, which at the tender stage were earmarked as future works and includes the construction of an additional 560m of track in concrete and an additional four turnouts also to be cast in concrete. The variation

order is approximately 30% of the original contract value. “Well done to Fonty and Jaun for the great work done to date which was an enabler to us getting the second phase,” said Douglas Morris, CEO, Grindrod Rail Construction. Further to the success above, GRC has been awarded the 5-year maintenance contract for the Gautrain. “Well done to Hendrik, Johan M, the Commercial team, plant, SHEQ and all concerned for doing such a great job with the submission and the subsequent Bombardier due diligence. This contract brings enormous value to our business, not only in terms financial value but also in terms of credibility. Adding this prestigious client to our CV will bode us well into the future,” said Morris.

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VALE INAUGURATES THE NACALA CORRIDOR IN SOUTHEAST AFRICA Vale CEO Murilo Ferreira and representatives of the governments of Mozambique, Malawi, Brazil and Japan inaugurated the Nacala Corridor in May. The implementation of this logistics corridor is part of the commitments signed by the governments of Mozambique and Malawi, Vale and Mitsui for the socio-economic development of the zone.

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The implementation of the Nacala Corridor is an investment made by Vale and the Mozambican state company CFM (Portos e Caminhos de Ferro de Moçambique) to build and rehabilitate a 912km railway connecting the Moatize Coal Mine, in Tete, to Nacala-a-Velha, in the province of Nampula, crossing the Malawi Republic. The Nacala Corridor consists of rail and port infrastructure, including the rehabilitation of existing railways in Mozambique and Malawi and a new coal port terminal in Mozambique.

The terminal has a storage yard of, approximately, 1 million tonnes of coal and takes advantage of the deep bay that exists to receive approximately 150 large ships per year. The project started in 2012 and marks the company's largest volume of investments outside of the home country, totalling US$4.4 billion. With the implementation of the Nacala Corridor, Vale could increase coal production up to 18 million tonnes per year. This volume is four times larger than production in 2016, 5.5 million tonnes, and almost six times greater than the production in the first full year of operations of the Moatize mine in 2012, with 3.7 million tonnes. For the transportation of coal, the corridor has a fleet of 85 locomotives and 1,962 wagons, equipped with the latest technology. As a result, it is possible to increase the carrying capacity of general cargo and people to Mozambique and Malawi, increasing the generation of revenue and jobs in both countries and helping economic growth in Southeast Africa. Vale is investing heavily in the formation and training of local youth. More than 1,000 young people have benefited from technical training in the Labour Market Readiness (PPMT) and Professional Training Programs (PFP) programs, with training in Mozambique and abroad. With a workforce of around 2,000 employees, mostly of Mozambican and Malawian nationalities, and more than 1,400 contractors, the Nacala Corridor is already significantly transforming the employability of the local labour force and playing a key role in improving the quality of life of communities.

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ARCELORMITTAL SOUTH AFRICA LAUNCHES INCUBATION HUB TO HELP GROW LOCAL STEEL SECTOR ArcelorMittal South Africa officially opened the firstof-its-kind steel industry Incubation Hub close to the company’s head office in Vanderbijlpark. The MEC for Finance in Gauteng, Ms Barbara Creecy, and ArcelorMittal South Africa Board director, Ms Nomavuso Mnxasana, officially unveiled the ArcelorMittal South Africa Matlafatso Incubation Hub, a R30 million facility co-funded by the Department of Trade and Industry. The public private partnership has also received the thumbs up from the Gauteng provincial government, as key to its drive to revitalise economic activity in key regions and to help alleviate unemployment. Chief executive officer of ArcelorMittal South Africa, Wim de Klerk, said: “This is a significant milestone for ArcelorMittal South Africa’s transformation journey and will serve as a vehicle for driving transformation and help stimulate economic growth in the region.” The 1 600m²

Matlafatso Incubation Hub forms an integral part of ArcelorMittal South Africa’s preferential procurement strategy. The facility provides tailored development support to future industrialists in the steel and manufacturing sector, and currently, houses 12 incubates, effectively creating around 77 direct jobs. Bridging the journey from start-up enterprise to an industrialist, qualifying entrepreneurs are provided with access to factory space, capital equipment, industrial markets, bridging finance during the early stages of growth, and holistic development support. The Matlafatso Incubation Hub is also part of ArcelorMittal South Africa’s commitment to ensuring that the South African steel industry thrives by facilitating new entrants who can effectively and actively participate in the growth and development of the sector. “As South Africa’s largest steel producer, it is incumbent upon

the company to ensure that the steel industry can introduce new, highly-skilled and qualified entrants who are equipped to provide goods and services and can be incorporated into ArcelorMittal South Africa’s procurement supply chain, as well as those of other companies,” added De Klerk. As one of the largest private sector employers in the Vaal region, ArcelorMittal South Africa also provides various opportunities for employees to develop their skills and advance their careers. This initiative forms part of the company’s holistic approach to socioeconomic development, which spans from its early childhood development (ECD) programmes; to its focus on supporting learners around its operations with extra tuition in STEM (science, technology, English and mathematics) subjects; the provision of apprenticeships, learnerships and bursaries

to encourage careers in the engineering discipline; and its small business development programme. In 2015, ArcelorMittal South Africa and the Vaal University of Technology ran a six-month business and entrepreneurship course which involved 50 enterprises in Gauteng. The aim of the initiative was to empower local businesses and to encourage them to become part of the company’s supplier database. The Matlafatso Incubation Hub will also help drive the quest by the government to create a platform to encourage the emergence of black industrialists. The Matlafatso Incubation Hub currently hosts a range of diverse businesses, which include steel and fabrication companies, a local scrap metal collection consortium, a construction company and a black, woman-owned auctioneering business.

WBCG CHAIRMAN AND CEO TO SERVE AS NATIONAL PLANNING COMMISSIONERS Mr Bisey Uirab, Namport’s Chief Executive Officer and Chairman of the Walvis Bay Corridor Group’s (WBCG) Board, along with Mr Johny Smith, WBCG’s Chief Executive

Officer were recently inaugurated as National Planning Commission Commissioners. Mr Uirab joins Mr Smith, who is serving his second term as an NPC Commissioner. The teams are tasked to spearhead the identification of Namibia’s socio-economic development priorities; formulate short-term, medium-term and long-term national development plans in consultation with regional councils and develop monitoring and evaluation

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mechanisms to ensure the effective implementation of the national development plans. Additionally, the commission evaluates the effectiveness of government socioeconomic policies; coordinates the development of government socio-economic policies to ensure consistency; and mobilise, manage and coordinate international development cooperation. Mr Smith outlines the importance of WBCG’s involvement as an NPC Commissioner is to ensure a longterm perspective in the country’s plan concerning transport and logistics. “As we strive to continually grow the country’s socio-economic agenda, it is important that we make sure transport and logistics remain a part of this agenda”, he stated.

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EBRD SUPPORTS RAIL MODERNISATION IN EGYPT Millions of commuters across Egypt will benefit from a €290 million financing provided by the EBRD to support the Egyptian National Railways (ENR) in its fleet expansion and upgrade of services. As part of ENR’s locomotive renewal programme, the EBRD will finance the acquisition of up to 100 new diesel locomotives under a supply-and-maintenance contract outsourced to the private sector in accordance with the EBRD’s procurement policy. The ENR fleet of locomotives is very old with an average age of 30 years. This has caused a lack of availability, along with issues regarding carbon emissions and maintenance. The acquisition of the new locomotives will enable the railway company to provide a more reliable and higher quality service to its customers. The new fleet will also contribute to lowering carbon emissions by replacing life-expired inefficient rolling stock, delivering additional revenues due to better locomotive availability, improving access to jobs and achieving significant operating cost savings through improvement in fuel consumption.

Furthermore, the EBRD will provide technical assistance support to ENR to develop and implement a comprehensive freight reform programme and a commercialisation plan for the freight sector. This includes the separation of freight operations from passenger transport and the introduction of trackaccess charging. Technical assistance will also support ENR in implementing a focused awareness campaign to make railway transport safer for women. Improving safety will contribute to increased access and ridership of both men and women to transport services which are essential for access to jobs and economic inclusion. “This project will provide a better quality of life and economic development opportunities. It complements the EBRD’s continued support for Egypt’s development strategy of building new roads, highways, tunnels and connections across the country,” said Dr Sahar Nasr, Minister of Investment and International Cooperation.

Janet Heckman, EBRD Managing Director for the Southern and Eastern Mediterranean (SEMED) region and Head of the Egypt office, said: “We are proud to contribute to the development of a sector of utmost importance for Egypt. This is a key step in supporting the development and reform of the transport sector in line with the EBRD’s Green Economy Transition approach. Providing a reliable rail service is important for the quality of people’s lives and their businesses and consequently the whole economy”. This investment will strengthen the competitiveness of the railway company and will improve the environment in line with the EBRD’s Green Economy Transition approach under which the Bank aims to increase the volume of its green financing to 40 per cent of its total Annual Business Investment by 2020.

TANZANIA AND UGANDA SIGNS MOU TO RE-OPEN MWANZA - PORT BELL ROUTE Tanzania and Uganda have signed a Memorandum of Understanding (MoU) on a joint ministerial cooperation and improvement of ports, inland waterways and railway transport in order to increase transit trade among them. The agreement will see the re-opening of the multi-modal transport route from Dar es Salaam Port to Port Bell in Kampala via Mwanza Port through the use of trains and wagon ferry services.

Tanzania Minister for Works, Transport and Communications Hon. Prof. Makame Mbarawa (right), Uganda State Minister for Transport Hon. Aggrey Bagiire (centre) and CCTTFA Executive Secretary Capt. Dieudonne Dukundane after (Ministers) signing of the MoU on 13th July 2017.

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The MoU was signed at Dar Port by the Minister for Works, Transport and Communications Hon. Prof. Makame Mbarawa and Uganda State Minister for Transport Hon. Aggrey Bagiire in the presence of Central Corridor Transit Transport Facilitation Agency (CCTTFA) Executive Secretary Capt. Dieudonne Dukundane and TRL Director General Mr Masanja Kadogosa, among others. In addition, Tanzania Port Authority (TPA) and Uganda Railways Corporation (URC) will work together to renovate the Kampala ICD and improve the Port Bell operations.

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ALSTOM COMPLETES THE 20 FIRST TRAINS FOR PRASA Alstom has announced the conclusion of the manufacture of the 20 first trains for the €4 billion contract, signed in 2013 to supply 600 X’Ttrapolis Mega trains over 10 years to PRASA for the revitalisation of the rail industry in South Africa. The first 20 trains were manufactured in Brazil at the Lapa plant, in São Paulo, a reference in the production of stainless steel rolling stock, and 16 trains are already in commercial operation in South Africa.

To deliver the 580 remaining trains, Gibela - the consortium led by Alstom, with the participation of local companies Ubumbano Rail and New Africa Rail is currently building a 600,000m² plant in Dunnottar, 50km away from Johannesburg. The new manufacturing plant will also house a 4,000m² training centre and, at peak production, will produce 62 trains a year, boasting around 200 South African suppliers. In ten years, the project will create over 1,500 direct jobs at the plant.

Alstom Brazil will continue transferring technology to Gibela’s technical staff until mid-2018. Training and development for engineers, designers, technicians, train drivers and technologists are key for the modernization of the rail industry in the country. “In addition to infrastructure, we are pleased to contribute with technical expertise for this project, providing access to modern rail technology systems and empowering Gibela employees with various facets of rail skills,”

says Rosângela Tsuruda, General Director of Lapa Unit. The PRASA project reaffirms Alstom's goal of establishing itself as the leader in fast-growing markets. It also represents a significant landmark in the strategy of increasing its presence globally and locally, thanks to its global industrial footprint and partnerships that allow the company to be close to its clients.

The Railways Africa Premium Online Subscription Unrestricted online access to: • • • • • • • •

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COMPANY NEWS

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• • • • • • • • •

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Revenue increased by 5.3% to R65,5 billion Automotive and container volumes on rail up 24.3% General freight business up 4.9% Operational efficiency improves by 14.9% EBITDA up 5% to R27,6 billion Capital investment of R21,4 billion, taking total expenditure during the MDS period to R145 billion Gearing at 44.4% and cash interest cover at 2.9 times - significantly within loan covenant requirements Cash generated from operations after working capital changes rose 16.4% to R32,8 billion B-BBEE spend of R37 billion or 103.1% of total measured procurement spend.

Transnet Delivers Positive Performance Despite Difficult Economic Environment Transnet has delivered an impressive set of financial results for the year ending 31 March 2017, driven by strong volumes in general freight, export coal and manganese as the company’s road-to-rail strategy gathers pace. This confirms the company’s financial strength and operational endurance in a subdued economic environment. Revenue for the year under review increased by 5,3% to R65,5 billion (2016: R62,2 billion), spurred by a 4,9% increase in general freight to 88,1mt (2016: 84mt), a 2,4% increase in export coal volumes to 73,8mt (2016: 72,1mt) and a 24,3% jump in automotive and container volumes on rail to 9,2mt (2016: 7,4mt). In addition, the company moved a record 12,1mt in manganese volumes, a 17,5% jump from 10,3mt in the previous year. This was driven by significant improvements in operational efficiencies, including the creation of new loading and off-loading zones and a recovery in manganese prices. Price reprieves in excess of R600 million to struggling customers dampened the increase in revenue in an effort to stimulate the economy. The volume growth is a firm indication of the company’s progress in gaining rail market share, while continuously improving operational efficiency through the deployment of new generation locomotives and technological interventions. Volumes on the iron ore line were affected by lower demand and equipment failure at the ports. Encouragingly, demand for Transnet Engineering’s products resulted in a 19,6% increase in external revenue to R1,6 billion (2016: R1,4 billion) despite a deteriorating economic

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outlook both locally and in the rest of the continent. The increase in revenue is in line with Transnet’s efforts to diversify sources of revenue into the rest of the African continent and beyond. The company is currently aggressively marketing its recently-launched Trans Africa locomotive which was designed, engineered and manufactured locally and is tailored for African conditions. Port containers increased marginally by 0,7% due to weak consumer demand, while automotive export volumes went up 3%. Management continued to proactively manage costs through limiting over time, reducing professional and consulting fees and imposing a limit on discretionary costs. This resulted in a R2,4 billion saving in planned costs. Transnet’s key measure of profitability, earnings before interest, taxation, depreciation and amortisation (EBITDA), increased by 5% to R27,6 billion (2016: R26,3 billion), surpassing the country’s economic growth rate, for the financial period, by more than seven times. Cash generated from operations after working capital changes rose 16,4% to R32,8 billion (2016: R28,2 billion) reflecting the company’s strong cash generating capability. The company’s ability to service

debt remains secure with the cash interest cover ratio at 2,9 times (2016: 3,1 times) due to an increase in net finance costs. This is, however, significantly above the triggers in loan covenants. A well-defined and diversified funding strategy enabled the company to raise R17 billion for the year without government guarantees. Transnet has not tapped into government guarantees since 1998. The funds were raised from the following sources: • Development finance institutions - R5,5 billion •

Commercial paper and call loans - R7,6 billion

•

Export credit agencies R2,9 billion

•

Domestic bonds - R1 billion

The company borrows debt on the strength of its financial position. During the year, Transnet proactively and successfully renegotiated R29,1 billion of debt to lower and relax the credit rating default triggers to below sub-investment grade, in view of expected rating agencies’ downgrades. In April 2017, Standard & Poor’s reviewed the company’s foreign currency rating to BB+ from BBBand the local currency to BBB- from

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BBB, both with a negative outlook. This followed a similar action on the sovereign as Transnet is viewed to be closely linked to the Government. S&P however, maintained Transnet’s stand-alone credit profile at 'bbb', reflecting the company’s strong financial metrics as the company executes its multi-billion rand infrastructure investment programme. The Group evaluated the potential impact of the credit ratings downgrade on its financial position, liquidity and solvency and expects no significant negative effect compared to previous estimates, as the probability of a credit rating downgrade had already been considered. The gearing ratio increased marginally to 44,4% (2016: 43,1%) due to the execution of the capital expenditure programme. This level is significantly below the triggers in loan covenants, reflecting the available capacity for the company to continue with its investment strategy. The gearing ratio is not expected to exceed 50% over the medium term. The company continued to execute its infrastructure investment programme, spending R21,4 billion in the year under review. This takes total investment under the Market Demand Strategy (MDS) to R145 billion in the past five years. Transnet expects to invest a further R229,2 billion, including R20 billion earmarked for mergers and acquisitions to diversify revenue streams through geographic expansion over the next seven years to 2023/24. The ten-year expectation, dependent on validated demand, is a capital expenditure of between R340 billion and R380 billion. Among the company’s significant investments is the acquisition of locomotives to modernise its fleet in anticipation of a rise in general freight volumes in the coming years. Transnet concluded locomotive acquisition contracts in 2014, which resulted in the acquisition of approximately 1 319 new locomotives for the general freight business and coal business over the MDS period.

Overall, 452 locomotives have been accepted and contracts have been concluded as follows: • 95 class 20E electric locomotives •

60 class 43 diesel locomotives

•

100 21E electric locomotives

•

197 locomotives from the 1 064 locomotive programme have been accepted into operations, whilst four are currently undergoing acceptance testing.

Other infrastructure investment highlights for the year include: •

R2 billion invested in rail infrastructure

•

R2,3 billion invested in the wagon build programme

•

R137 million invested in expanding capacity for manganese beyond 5,5mt, taking total investment to R811 million so far

•

R145 million invested in the coal line expansion to 81mt, including the upgrade of yards, lines and electrical equipment

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R28 million investment in the Waterberg upgrade Stage II to grow rail capacity to 6mt through incremental upgrades of the existing rail networks and yards using additional loops, while maintaining the existing axle loads, electrical upgrades and improved train control systems

•

R1.5 billion investment in the New Multi-Product Pipeline. The 24” main pipeline and 16” inland pipelines have been fully commissioned and are operational, having transported 15 billion litres of diesel from Durban to the inland region since commissioning

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R1 billion in the maintenance and acquisition of cranes, tipplers, dredgers, tugs, straddle carriers and other port equipment

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Transnet uses its capital investment programme to advance South Africa’s developmental objectives which include BroadBased Black Economic Empowerment, supplier and enterprise development and skills development.

In the year under review, Transnet’s total recognised B-BBEE spend was R37 billion or 103,1% of Total Measured Procurement Spend of R35,8 billion (2016: R43,5 billion or 100,6% of R43,2 billion). Sadly, the company lost 15 colleagues to road vehicle accidents, train-related incidents mainly due to adverse weather conditions and nonadherence to internal operating procedures. Management has heightened its oversight role of operational performance - and safety performance, in particular, to ensure the various levels of safety performance are clearly understood and adhered to within the organisation. Regarding corporate social investment, R234 million was committed to sustainable community development programmes across the rural and in need communities of South Africa, in areas such as health, education, rural sports development and through grants and donations. More than 438 000 individuals benefitted from the health programme. The company spent 3,1% of its labour cost on training during the year, focusing on artisans, engineers and engineering technicians. Overall, 173 full-time engineering bursaries were awarded in various disciplines and 229 engineering technician trainees were given workplace experience opportunities. Sector-specific skills development continued to focus on maritime, rail and port terminal operations, with 1 813 learners participating in these programmes. Going forward, management has adopted a new business model, Transnet 4.0, designed to reinvent the company’s existing business model and operational philosophy to include expansion into the rest of Africa, Middle East and South Asia; to grow into a fully integrated logistics service provider with integrated solutions; and to strengthen manufacturing capability, while positioning Transnet as an Original Equipment Manufacturer (OEM) in Africa.

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RAILWAYS AFRICA

TRANSPORT AFRICA AWARDS, AFRICA RAIL, 13-14 JUNE 2017 The Transport Africa Awards dinner, hosted by Africa Rail on the 13th June 2017, brought together VIPs, delegates and sponsors. This year, the Transport Africa Awards awarded winners in the following categories:

African Transport Innovation Award – Sponsored by General Electric Transnet Engineering Premier Transport Project of the Year Siemens for the PRASA signalling project Transport Leader in Skills Development Dachser South Africa Freight and Logistics Company of the year Savino Del Bene Women in Transport Melissa Whitehead- City of Cape Town - Transport and Urban Development Authority African Transport Operator of the Year Bombela Operating Company OEM of the year General Electric

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4:2017

KNORR-BREMSE AND LB FOSTER COOPERATE ON WHEEL FLANGE LUBRICATION SYSTEMS Knorr-Bremse and US based LB Foster have concluded an agreement governing the supply and distribution of the American company’s wheel flange lubrication systems for rail vehicles. The agreement covers Germany, Austria and Switzerland, as well as Poland and South Africa. “LB Foster has delivered wheel flange lubrication solutions for decades and enjoys a market leading position in North American and Asian markets,” said Mark Cleobury, Member of the Management Board at KnorrBremse Rail Vehicle Systems. “With our close-knit sales network, we are well positioned to boost market penetration in the Central European markets and South Africa.” And as John Kasel, Senior Vice President Rail Business at LB Foster, explained: “The partnership with Knorr-Bremse leaves us even better placed to meet the needs of our customers and access markets that we expect to deliver substantial growth.” In the past, LB Foster relied mainly on a decentralised distribution of its wheel flange lubrication systems in Central Europe and South Africa through local dealers. The new partnership is already proving successful. The two companies are currently engaged in equipping 240 TRAXX locomotives being built by Bombardier Transportation for South African railroad operator Transnet Freight Rail (TFR) with wheel flange lubrication systems and solid sticks. KnorrBremse is involved in the development and supply of the braking systems for this project. Wheel flange lubrication systems are standard equipment on modern rail vehicles. Mounted on the wheel flange and flange back, the lubrication sticks minimise wear at these points. As a result, these systems extend the rail grinding intervals and prolong the service life of the wheels. The supply and distribution agreement means that Knorr-Bremse is now in a position to complement its existing product portfolio with tried-and-tested wheel flange lubrication systems, along with the associated solid sticks and services, while LB Foster can now target the German-speaking markets as well as Poland and South Africa more accurately.

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A trusted industry leader For more than 90 years, Scaw, a South African industry leader, has been a leading supplier of cast railway products to the backbone of our South African economy. When safety and productivity are at stake, customers depend on Scawâ&#x20AC;&#x2122;s 90 years of experience and expertise to design and manufacture railway products to the highest international manufacturing, safety and environmental standards. With one of the largest foundries in the Southern Hemisphere, Scaw produces an extensive range of railway products cast, machined and delivered to customer specifications or under international licence. Customers, both nationally and internationally, continue to choose Scaw products and expertise.

www.scaw.co.za

More than steel.

Technology leader Maximized customer benefit Turnout system solutions for Africa and the rest of the world

voestalpine VAE SA (Pty) Ltd 23 Anvil Road, Isando 1600, South Africa Tel: +27 11 928 3700, Fax +27 11 928 3910 sales.VAESA@voestalpine.com www.voestalpine.com/vaesa