$41.5 Billion Long Term Railroad Upgrades in Africa Rolling Out

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). Government approval for major investments in heavy rail development and re-furbishing are coming out of Africa, which has an urgent need to modernize its transport infrastructure to cope with the planned expansion of intra-African trade and the efficient delivery of exports of manufactured product and raw materials to coastal export points.

A $40 billion, 25 year development plan has been approved to put the decrepit state owned Nigeria Railways Corporation into shape. The linking of all state capitals and major towns to the national network and the long awaited execution of plans for the Lagos-Abuja fast train project are scheduled for the first phase of the plan, which includes the rehabilitation of the corporation's locomotives.

Also in the first phase, the Ajaokuta-Warri rail line, the Ajaokuta line, and the Port Harcourt rail line would all be completed. These centers are crucial to Nigerian industrial development. A major state owned steel complex is under construction at Ajaokuta. Oshogbo and Warri are the sites for several multi national oil installations and have large state run steel rolling mills.

Funds for the rail projects will come from government budgetary allocations and from the international investment community. An implementation committee has been set up headed by the junior transport minister. Earlier this year, the Nigerian government appointed Canac, the Canadian consulting firm, to assist in repositioning the 100 year old corporation. Canac has a representative on the committee and is training rail employees in the running of an efficient and profitable railway.

In South Africa, the transport parastatal Transnet is preparing to accept tender offers worth around $1.5 billion to upgrade the fleet of locomotives and rolling stock, which have an average of 26 years in service, of its railway company, Spoornet. The investment will be planned for the long term with the first tender covering three years. The plan will then be re-assessed every three years. Alternatives suggested in terms of main line locomotives include various levels of upgrades on 654 locos of the existing fleet, the supply of up to 379 new main line, dual operational mode AC/DC locos supplied to Spoornet over a period of fifteen years, and/or a combination of new locos with AC or DC traction motors balanced with the existing fleet. Whichever alternative is offered, it must contribute towards sufficient tractive effort (TE) to sustain the traffic demand at the lowest fleet like cycle over a period of thirty years.

Spoornet is the largest railroad and heavy haulier in southern Africa with an annual turnover of over $1 billion, which comes from the annual transport of 180 million tons of freight. The strongest single contribution to the bottom line comes from the dedicated coal and iron ore export lines Coallink and Orex. The latter runs the world's longest trains at 7.5km. Transnet hussled through a record $330 million profit in 2000/1. It has warned of lower profits this year.

Upgrades are crucial to cope with expanding export and general freight. Recently there has been a standoff between Spoornet and major exporting clients caused by the government company's high-handed, take-it-or-leave it attitude in response to a litany of specific service failures. Once precipitated by the granite company Marlin, part of a $200 million per annum export industry, complaints about bottlenecks grew from all sections of industry and these are now being dealt with.

Spoornet also provides required services and rolling stock in 17 other African countries. This is another reason for urgent upgrades for the region's heavy hitter. The major transport and traction international companies are forming a bidding queue and local companies who have supplied about 80% of rolling stock since the 1950's are hoping to take a major slice of the $100 million a year rollout.

Currently Spoornet has 123,580 freight wagons, 3,285 locomotives, and 30,617 km of track, of which 20,041 km is actual route distances.