INVESTOR NEEDED FOR RAIL LINK PROJECT

MBABANE - A rail link project with an estimated value of E32.3 billion requires an investor with rail road knowledge.

The project entails the construction of a 150km long new railway line from Lothair (South Africa) to Sidvokodvo in Eswatini, that will provide a strategic rail link with the ports of Richards Bay and/or Maputo. As well as the development of the Mpaka Inland Container Depot (ICD), the Greenfield project requires a 22,000m² hardstanding for container staging, office buildings, a weighbridge and warehouses. The estimated cost of the projects was US$1.8 billion in total, with the rail link costing US$1.2 billion (E21.6 billion) and the ICD costing US$0.6 Billion (E10.8 billion), and the mean IRR value was 14.6 per cent at phased approach.

Seamless

This project is a joint inter-railway strategic initiative between the railway companies of the two countries, Transnet and Eswatini Railways.
The Eswatini Rail Link (ESRL) is a seamless regional railway network running across three countries, South Africa, Eswatini and Mozambique.
Eswatini Investment Promotion Authority (EIPA) Chief Executive Officer (CEO), Sibani Mngomezulu, said a feasibility study was completed for the rail link and the resettlement of the projected 235 affected homesteads was required.

Mngomezulu said construction of the hardstanding was completed in May 2022, but the access road paving was yet to be done, and there was a need for funding for the completion of the rest of the infrastructure. The CEO said the funding would be raised on the strength of take-or-pay offtake agreements to be signed between the Special Purpose Vehicle (SPV) and each railroad entity. He said the two railroad entities would be charged a track fee by the SPV for using the railroad line that has been constructed with the funding raised by the SPV. “Economic activity is expected to accelerate, with mining, agriculture, and manufacturing continuing to increase their contributions to the GDP,” he said.

Opportunities

The CEO added that approximately 5 000 work opportunities during construction for 36 months and 263 new permanent jobs during operations will be availed of by the project. Other benefits include the decongestion of traffic at the border and creating capacity up to 45 MTPA for general freight export. Mngometulu added that business opportunities had also availed themselves for the construction industry and small and medium-sized enterprises (SMEs) to provide outsourced services.

He also said an improved logistics chain, direct rail access to the South African (RSA) economic hub, and integration of the region’s freight logistics would not be excluded. The CEO said the project would further increase the movement of imports and exports and also provide a shipping hub in proximity to the sugar belt of Eswatini. “Appeals to the businesses in the Lowveld, the Maputo Port, and the North-South for corridor developments in close proximity to KMIII International Airport have been made,” he said.

Station

Mngomezulu mentioned that the station was already listed as a bonded station by the Eswatini Revenue Service (ERS), promoting ease of doing business, economical and safe movement of goods through the terminal, as well as the competitiveness of Eswatini in regional trade. Mngomezulu added that the government has also supported the project by providing land for the construction of the railway line and by bearing expenses for land acquisition and pre-construction activities. The need to attract a higher and more sustainable level of direct investment flows is imperative to the business sector of Eswatini. This would not only increase investments but also provide businesses with the opportunity to expand in terms of trade and market availability. Higher levels of direct investment flows contribute to the growth of industries like manufacturing, textile processing and construction.

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