Rail link will make movement of goods easier

The 146-kilometre railway line soon to be constructed between South Africa and Swaziland will help reduce the cost of doing business between the two countries.

In fact, this railway line will not only facilitate trade between the two countries and neighbouring Mozambique, but is also part of development.

Swazi businesses, which import most of their wares from South Africa, feel this infrastructure will also have positive spinoffs for the consumer by lowering the prices of commodities because of the potential reduction of transport costs.

“We’re very excited about this development because it is part of the project to establish trade corridors in the region,” said chief executive officer of the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC) Zodwa Mabuza.

She said this initiative is similar to the Maputo-Mombasa Corridor, which has also proved to be beneficial to the region.

Mabuza said promoting railway for the transportation of goods would also increase the volumes of commodities exported and imported into the affected countries. Mabuza said it makes a lot of sense for a small country like Swaziland to partner with a bigger economy like South Africa to be able to unlock its potential to develop itself.

“Integration is very important and when it comes to trade, size should not matter because we’ve seen countries like Singapore and Mauritius developing to greater heights although they are both small in size and population,” said Mabuza.

Currently Swaziland Railway (SR) transports 4m tonnes of goods annually. Swaziland Railway imports petroleum products and exports commodities such as timber, sugar, coal, wood pulp and canned fruits. The country’s railway network system has a capacity for 80 wagon trains.

Swazi Link Railway Line will cost around E16 billion. Construction will start next year and end in 2016. It will run from Lothair (Mpumalanga, South Africa) and Sidvokodvo (Swaziland) while there will be other links from the South African side to Mozambique.

Announcing this project in Johannesburg, South African Minister of Public Enterprises Malusi Gigaba said his country will cater for about E12 billion of the costs when also taking into account the links to Maputo while Swaziland takes care of the rest.

Together with his Swazi counterpart, Minister of Public Works and Transport Ntuthuko Dlamini, Gigaba concurred that this railway line is aimed at reducing the traffic density on both countries’ roads.

Federation of Swaziland Business Community (FESBC) vice-chairman Hezekiel Mabuza was also excited about the idea.

“Transport is one of the reasons why the cost of doing business in this country is a bit too high,” said Mabuza.

Swaziland imports more than 80 percent of its goods from South Africa while about 70 percent of its exports go to the neighbouring Republic. Swaziland’s main exports include coal, sugar, beef and citrus fruits.

Recently the country revived its iron ore mine where Salgaocar Swaziland will set up an iron-ore reprocessing factory to extract the mineral from the dumps that previous miners left many years ago.

But the reprocessing factory has not been constructed yet and Salgaocar ferries dumps to Mozambique for reprocessing by road. Everyday 30 trucks travel between Swaziland and Mozambique transporting the iron ore dumps and many citizens are concerned about the number of heavy vehicles in the roads.

“The high density of heavy traffic will deplete our roads and that’s why we’re excited about this project because we hope that Salgaocar will also seize the opportunity to use the railway line,” said Mabuza.

Mabuza said that what makes it even more expensive to transport goods in Swaziland is that it is a landlocked country and has limited access to the sea.

“When transporting goods by ship we still have to spend more money getting them by road from here to either Mozambique or Durban,” said Mabuza.

Minister Dlamini said this project will not only improve the transport infrastructure in the region but also provide employment opportunities for many people in the affected countries.

“The project is taking place at marginalised areas, Sidvokodvo and Ermelo and we hope this railway line will reduce poverty levels in the two countries,” said Dlamini.

He expressed his appreciation to the South African government for ensuring that it also takes Swaziland onboard in its development initiatives to help improve the economy of the Kingdom. 

About 63 percent of the 1.1 million Swazi population lives below the poverty line of E4 a day. The country is currently facing an economic crisis after a global recession that saw the country losing 60 percent of its revenue from the Southern African Customs Union (SACU.

More than half of the country’s revenue used to come from SACU. Foreign direct investment is very low while the economic growth rate is at two percent.

This collaboration between the two countries through their state-owned enterprises, Transnet and Swaziland Railway, will provide the necessary environment for economic growth.

 “We expect industries to develop along the rail infrastructure and jobs created for the communities,” said Swaziland Railway chief executive officer Dr. Gideon Mahlalela.

Mahlalela said, in fact, this is a development project, which cuts across three countries, Swaziland, South Africa and Mozambique because it also targets the ports in Maputo and Richards Bay.

“We are also looking to connect with other ports in the future which might develop along the eastern coastal belt,” said Mahlalela. “Railways without ports solutions are not the answer to customer logistical needs.”

Besides transporting goods, Mahlalela said this railway is also aimed at improving the lives of the people, unlike during the colonial era where such consideration was not made.

Although this railway line will predominately transport coal, said Mahlalela, it will also unlock the potential for other minerals not only between the two countries but the whole region.

Financial institutions are already salivating over the project and Mahlalela said money for constructing the railway line will not be a problem and that the project will fund itself through the demand it will create.

Ministers Gigaba and Dlamini marked the start of the project at a sod turning ceremony on January 12 at Lothair. Hailed as the first large scale investment in Southern Africa since the Richards Bay line was constructed in 1976, Swazilink Railway Line when complete will create an additional capacity of 15 million tonnes for transport.

“Globally, rail infrastructure is undergoing a major renaissance as an investment and a vehicle for the upliftment of citizens in an environmentally friendly and cost effective manner,” said Brian Molefe, Transnet Group chief executive officer.

He said Transnet has done a high-level risk assessment to identify the strategic planning, funding, construction and environmental risks to ensure that the infrastructure sees the light of day.

“We expect the first train to run in three years time after the necessary land purchase agreements and environmental approvals have been resolved,” said Molefe.

He said this project is complementary to the coal investment including the Waterberg and Eskom’s road-to-rail migration programme.

Gigaba said this project is strategic in the region because it has the potential to attract traffic to Maputo and Richards Bay corridors, providing alternative exports corridors critical to the southern African ports and encourage economic and rail transport in Swaziland.

“The capacity created for general freight via this link line will relieve pressure on the Coal Line,” said Gigaba.

He said Africa’s competitiveness in the global economy demands that countries take measures, both individually and collectively, to modernise the continent’s infrastructure systems.

Gigaba said that there is sufficient empirical evidence that for Africa to be competitive and improve intra-African trade, concerted effort is required to improve the performance of the continent’s transport and logistics systems through appropriate policies.

“Strategies to promote regional integration should involve opening up the North-South Corridor through collaborative infrastructure investment and participating in regional energy markets,” he said.

However, Gigaba pointed out that African countries should address the insufficient customs procedures, complicated rules of origin and other non-tariff barriers. There is still a lot to be done to improve the transport infrastructure in the continent because the Minister observed that most of the existing facilities were conceived and constructed to meet the colonial system and not Africa’s development.

“This has paralysed Africa’s economic development, placed a huge social cost both to the peoples of this region and the rest of the continent,” he said.

“This has translated to loss of investment and meant that we could not create the most needed jobs and income, or improved standard of living of the African people.”