The North South Corridor (NSC) rail project identified by the Afri-ID during the desk’s project identification phase is fast becoming a major rail success story for the SADC region. Through Afri-ID facilitation and coordination, railway operators and administrators from South Africa, Zimbabwe, Zambia and the DRC have been jointly working together to develop and implement rehabilitation and upgrade plans on railway networks on the NSC.
Through the Afri-ID’s efforts in close collaboration with the rail operators that have implemented the block train on the NSC, operational efficiency has increase significantly. Grindrod (a member of the Afri-ID) recently ran a round trip by rail on behalf of a client with containerised freight from Johannesburg to Kitwe in Zambia and then back to Durban. The transit time for the freight was six days in each direction, a vast improvement from the previous times that averaged in excess of 15 days for the same trip.
In November 2015, at a SADC committee meeting of Ministers responsible for transport and meteorology held in Livingstone Zambia, the NSC was officially presented by SADC Secretariat to the Ministers. The SADC Ministers noted that, as part of development of the SADC Regional Infrastructure Development Masterplan (RIDMP), the Regional Railways Revitalisation Initiative, Programme for Infrastructure Development in Africa (PIDA) and the Presidential Infrastructure Champion Initiative (PICI), the NBF would be the coordinating and facilitating development organisation for the NSC rail infrastructure investment and operating study. The Ministers also noted that the study was intended to make a meaningful contribution to the broader SADC regional rail masterplan process to be rolled out by SADC.
In December 2015, the NSC study also received first level approval for funding by the Infrastructure Investment Programme for South Africa (IIPSA) steering committee. The DBSA is currently busy with the full due-diligence in Q1 2016 for second level approvals that will allow disbursement of funds to finance the NSC study. The IIPSA Fund is currently being managed by the DBSA and the review process is anticipated to be completed in Q2 2016.
During the recent 3rd International Conference on Financing for Development held in Addis Ababa, Ethiopia from 13 to 16 July 2015, the Afri-ID found opportunities to showcase and market the desk based its success in unlocking port and rail projects in the Southern Africa region. The event was the third International Conference on Financing for Development, which gathers high-level political representatives, including Heads of State and Government, and Ministers of Finance, Foreign Affairs and Development Cooperation, as well as all relevant institutional stakeholders, non-governmental organizations and business sector entities to discuss the funding of Africa’s projects.
Currently the Afri-ID is continuing to work on its rail infrastructure projects in Zambia and Tanzania as well as actively engaging rail operators from neighbouring countries to participate in the rolling stock leasing pool project.
The NBF partnership with the the SADC-PPP Network hosted the second ‘Public-Private Dialogue Forum on Infrastructure Projects’ on 17 and 18 March in 2015 at the Hyatt Regency hotel in Rosebank. The project-focused annual forum brings together public and private sector project owners, financiers and project promoters from the Southern African region, with the purpose of engaging key stakeholders on how to accelerate the implementation of infrastructure projects through better partnering.
Designed much like the inaugural Public-Private Dialogue Forum on Infrastructure Projects, this event outlined the work still required to resolve political, policy and trade barriers to unblock infrastructure projects as well as provide a perspective on the priority projects of the NEPAD Programme for Infrastructure Development in Africa (PIDA) and the SADC Regional Infrastructure Development Master Plan (RIMDP).
Keynote speakers Dr. Ibrahim Mayaki, CEO, NEPAD Planning and Coordinating Agency, Remigious Makumbe, Director of Infrastructure and services, SADC Secretariat and Stanley Subramoney, Chairman of the NBF provided insight on regional and continental infrastructure development plans and the status of such projects. The event also featured delegates from across the region who delivered infrastructure project presentations and participated in panel discussions in the Rail; Ports; ICT and Energy sectors.
Transnet SOC Ltd and the NEPAD Business Foundation launched the Africa Infrastructure Desk on Monday, 3rd June 2013 at the annual NBF Founding, Platinum Members and Ambassadors luncheon to government officials, ambassadors, NBF’s corporate members, private sector and development agencies.
Infrastructure continues to be Africa’s missing link to developing integrated intra-Africa regional trade. With less than 10% intra-African trade, increased infrastructure availability is a critical means to promote trade and investment. However, it is noted that Africa’s infrastructure projects have not been financed nor implemented quickly enough. Lack of information, inconsistent cross-border policy and poor project bankability has limited the pursuit of commercial and investment interests in infrastructure.
In order to tackle these issues, Transnet SOC Ltd and other blue chip companies have partnered with the NEPAD Business Foundation (NBF) to establish an Africa Infrastructure Desk (Afri-ID). The Afri-ID will focus on researching and developing projects, linking private and public sectors in deals across Africa and managing relationships that ensure implementation. This innovative research, linkage and relationship platform will contribute to the development of investment and commercial opportunities for participating companies, allow coordination on pursuing projects, provide leading information on developments in infrastructure and allow engagement between public and private sector. The Africa Infrastructure Desk will have meaningful impact for spatial and industrial development, as well as regional integration in SADC and the North South Corridor.
Speaking about the partnership Lynette Chen, CEO of the NBF said, “Africa’s infrastructure deficit is crippling the continent in terms of trade and investment. Through the Afri-ID, companies will access, collaborate and implement infrastructure project opportunities across Africa. Transnet and the NBF’s partnership reflects the potential that private and public sector could have to harness resources and skills to tackle the huge infrastructure deficit while ensuring local empowerment.”
Also speaking at the luncheon on infrastructure investment opportunities in West and East Africa were the Ambassador of Tanzania (HE Zacharia Masanja), Ghana (HE Martha Pobee) and Kenya (HE Patrick Wamoto) and of who highlighted rail, pipeline, gas, oil and energy opportunities in their countries. Her Excellency Martha Pobee said, “Working with the private sector and with NEPAD will be important to Ghana’s development. We welcome and are eager to explore opportunities on working together more closely. The opportunity to present at this forum is most appreciated”.
As the sponsor of the establishment of the Afri-ID, Brian Molefe, Group CE of Transnet SOC Ltd said, “We envision an Africa without borders that is seamlessly linked from Cape to Cairo by efficient infrastructure. But in order to achieve this vision, closer collaboration, partnership and coordination between all stakeholders including government and private sector is required to find joint solutions to implementing these large scale infrastructure projects. On this basis, we decided to support the Afri-ID to ensure that there is high level of coordination between stakeholders to ensure implementation takes place.”
The NEPAD Business Foundation hereby invites tenders from interested parties to participate in the development of a North-South Corridor (NSC) rail infrastructure investment and operating study. The study will be used as a blueprint to grow the freight volumes hauled on the NSC and to ultimately reduce the cost of rail transportation through better price and service strategies. Tenderers are specifically invited to execute the following work-streams of the study: Infrastructure upgrade requirements, new infrastructure requirements, customer analysis, development of an operational improvement plan, development of an operating model and development of a funding model and implementation plan.
A compulsory clarification meeting will commence at 10h00 on 08 December 2014, Building 9, Tuscany office Park, Coombe Place, Rivonia, Sandton. Prospective tenderers are requested to contact Ms Patricia Malaba on (010) 596-1910 for directions to the venue. Attendance is compulsory. Tender documents are available for download at http://nepadbusinessfoundation.org/index.php/research-and-knowledge/project-and-tender. Tender documents will not be made available at the clarification meeting.
All submissions are to be made to the NEPAD Business Foundation. Tenders must be sent to the following address, Building 9, Tuscany Office Park Coombe Place, Rivonia, Sandton on or before the closing time and date, being 10h00 on 16 January 2015.
The selection process will be subject to the procurement policy of the NEPAD Business Foundation. The NEPAD Business Foundation will not necessarily accept the lowest price or any proposal and reserves the right to withdraw a tender without furnishing reasons.
Many African countries are currently embarking on major infrastructure development programmes and projects. This development drive presents an excellent opportunity that holds the potential to benefit the local (both host country and the continent in general) community and businesses across Africa.
However, in order to ensure that this potential is realised, appropriate planning is required to guarantee that suitable procurement arrangements are implemented. Equally important are the efforts to ensure that these procurement arrangements support the Local Economic Development objectives of African countries and the region.
The priorities of Africa’s infrastructure development drive in the immediate and foreseeable future will focus on stimulating economic activities on both a national and regional level; protection of national/ local industries against foreign competition; improvement of the competitiveness of certain industrial sectors; remedying regional disparities and achieving social policy functions relating to the wider scope of sustainable job creation.
The NBF’s Afri-ID operation models and intervention processes for infrastructure development prize the promotion of local economic development and increased local content and continually measures the impact assessment of each project on the basis of local beneficiation and participation.
The Afri-ID with the assistance of Lestema Consulting (a member of the Afri-ID) has finalised the draft of a discussion paper that considers Africa’s ‘Economic development principles and practices’. The paper outlines possible procurement mechanisms that stimulate economic development and also provides background on current practices in South Africa offering the case studies of Transnet SOC, PRASA and Eskom. Further alternatives in the paper describe procurement arrangements in Tanzania as used by Development finance institutions.
The discussion paper makes some of the following assertions and conclusions:
1. Infrastructure development programmes present a huge opportunity for the African private sector but there is a risk that only international businesses will benefit from the investment.
2. There are a variety of different methods for including economic development requirements in procurement.
3. Although there is no specific local content policy for infrastructure projects, the existing procurement arrangements in Tanzania do allow for preferential procurement which includes domestic preference (limited to 10-15% margin of preference). No specific contractual mechanisms and/or specifications were noted. Further development of the Economic Development requirements in addition to domestic preference may have a larger impact.
4. The World Bank supports local economic development and allows a margin of preference to domestic contractors (up to 7.5%).
5. Successful economic development initiatives have been implemented on the Continent (e.g. South Africa) and can be leveraged. However, initiatives that have failed must also be considered to ensure that mistakes are not repeated.
6. Some regional economic development initiatives have not been fully realized due to misalignment between the objectives and the realistic local capacity available.