05 December 2016 – Botswana and Namibia have expanded the scope of the Trans-Kalahari Railway Line project from being a dedicated coal export route to a multi-sectoral project designed to unlock the potential of other economic sectors along the corridor.
Addressing parliament in Gaborone last week, Botswana’s Transport and Communications Minister, Kitso Mokaila said the project was planned in 2010 as a 1 500 km railway line for the transportation of European-bound coal exports to the Mmamabula Colliery, in Botswana, to the port of Walvis Bay.
However, he said the project had to be remodelled in 2015 as coal prices slumped and ruined the viability of the single-commodity railway corridor business model.
“A project development plan study was undertaken in February 2015 by a consortium of Australian firms led by Aurecon,” Mokaila said.
“The study identified all the risks and challenges associated with the project, the main challenge being the low price of coal which currently renders the project non bankable. The price of coal has drastically gone down from US$114/t in 2010, when Botswana and Namibia signed the MoU, to US$78/t in 2014 when the bilateral agreement was signed. It slid further down to US$60/t in 2015,” he said.
Furthermore, he said in 2015, the two governments expanded the project into a regional development corridor that would go beyond the construction of the railway line to include the development of sectors such as agriculture, mining, transport and logistics, manufacturing and real estate.
To date, the two countries have signed the project management agreement, identified and refurbished buildings to house the project.
Mokaila said Botswana had approved all policy manuals for the project and was now waiting for Namibia to do the same. A feasibility project for the economic corridor is yet to be concluded.