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Crumbling South African rail prompts Botswana to forge new route

Coal shipments on Transnet freight-rail network have plunged to 30-year lows and iron-ore railings are at their lowest in a decade

Coal shipments on Transnet freight-rail network have plunged to 30-year lows and iron-ore railings are at their lowest in a decade

Photo by Bloomberg

19th December 2023

By: Bloomberg

  

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Botswana has received unsolicited bids from investors to build a rail line to a Namibian port that will help avoid South Africa and its disintegrating logistics network.

The 1 500 km Trans-Kalahari Railway project is gathering momentum as Transnet, the State rail and ports monopoly in Botswana’s southern neighbour, struggles to ship goods, according to Transport and Public Works Minister Eric Molale.

“We learned in June that the waiting period at all South Africa ports to offload and load can be a minimum of two weeks, floating on the sea for that period,” he said in an interview Monday in Gaborone, the capital.

“The United Arab Emirates, the Qataris, the Chinese, the Indians have also come to say this is not a long line for them and it is in fact, a comparatively short one that they can do very quickly.”

Transnet has become one of the biggest drags on South Africa’s economy and, along with power outages, resulted in a surprising contraction in growth in the third quarter. Snarled transportation also has the potential to crimp expansion in neighbouring countries, including landlocked Botswana – one of the world’s biggest diamond producers and a major beef exporter that relies on South Africa for most of its trade.

An alternative route may also attract companies in South Africa, offering shorter travel than to the nation’s own ports, Molale said.

Coal shipments on Transnet freight-rail network have plunged to 30-year lows and iron-ore railings are at their lowest in a decade. Port gridlock has led to delays to the loading and offloading of ships and some fashion retailers have resorted to flying in apparel.

“We see ourselves as best placed especially for companies in the Johannesburg, Pretoria area of Gauteng because either way, going west or east, they cover the same distance and some of them, like vehicle manufacturers have come to us,” the Minister said.

The Trans-Kalahari Railway has been slow to develop since Botswana and Namibia signed an agreement in 2010. The original impetus was to export coal from eastern Botswana, yet prices declined and financiers have shunned backing the fuel. It will rather focus on exports from the fast-developing Kalahari Copperbelt in the west of the country.

The line would run from Gaborone, through the Kalahari desert to Gobabis in Namibia and Walvis Bay on the Atlantic Ocean.

Nations in the region are seeking ways to better get their goods to global markets. The US is backing a rail line from the copper and cobalt mines in Zambia and the Democratic Republic of Congo to Lobito in Angola, while China’s government selected a state-owned company to negotiate a concession to operate a railway connecting Zambia with the Tanzanian port of Dar es Salaam.

Copper and cobalt are important minerals in the global transition to cleaner fuels.

Botswana and Namibia set up a bi-national project office in 2015 to push the project. According to its website, 12 companies submitted expressions of interest last month. A request for proposals will be released in March and construction is due to begin in January 2025.

“There is a lot of money out there in the world and unsolicited bids have been coming in,” Molale said.

Edited by Creamer Media Reporter

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