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Maputo line privatisation canned
Brendan Ryan
Posted: Fri, 24 Mar 2006
[miningmx.com] -- THE proposed privatisation of the railway line from the South African border at Ressano Garcia to the Mocambiquan port of Maputo has been cancelled by the Mocambiquan authorities after nearly four years of negotiations with Spoornet.
This was confirmed at the Coaltrans Conference held in Johannesburg by John Muller, MD of the Maputo Coal Terminal (MCT), after Spoornet CEO Siyabonga Gama evaded questions on the status of the privatisation agreement.
The cancellation of the proposed privatisation is understood to be highly embarrassing for Spoornet which launched it with great fanfare in February 2002.
At that time Spoornet sent its flagship train, the five star luxury Blue Train, to Maputo with a load of political and business VIPs on board and hyped the agreement as an example of South Africa encouraging the economic development of the broader Southern
African sub-region.
The plan was for Spoornet - in collaboration with consortium partner New Limpopo Bridge Project Investments (NLPI)- to spend US$100m on upgrading the railway line. The consortium was expected to take over management of the line by mid-2002.
Instead, nothing happened. The last official statement from Spoornet on the privatisation was received in reply to written questions submitted by the Financial Mail in August 2004.
At that time a Spoornet spokesman said; "According to the agreement a number of conditions had to be met before the concession could commence - the most important being the land mine clearance certificate that was received only in May 2004. It was only from the end of May 2004 that the process could consequently move towards financial closure."
Gama declined to comment on the concession agreement when this was raised with him in February this year when Spoornet announced its decision to spend R3,5bn on the
purchase of 110 locomotives for use on the Richards Bay line.
In his presentation Muller said the privatisation agreement was cancelled by the Mocambiquan authorities in December last year.
He said state-owned Mocambiquan railway operator CFM will now spend US$22m on repairing the line in two phases. Initial emergency repairs are expected to be completed by June this year while full rehabilitation of the line to be able to handle axle loads of 22 tonnes should be completed by the fourth quarter of this year.
Coal exports by the MCT have been hamstrung for the past four years by the inability of Spoornet to deliver contracted volumes of coal and it is significant that Muller himself raised this issue with Gama from the floor during question time after Gama’s presentation.
Muller pointed out that the allocation of resources by Spoornet to the Witbank-Maputo line had been "very limited" and he asked what Spoornet’s plans were for the future of the
line.
Gama’s reply was; "we have many plans and we shall continue to hold discussions with you."
Muller also dealt with the implications for the MCT of the decision by the Richards Bay Coal Terminal (RBCT) to implement its Phase 5 expansion which will increase coal exports through Richards Bay by 20Mt/year to 92Mt/year.
He said the MCT would continue to have a viable role in meeting coal export requirements from Southern Africa and would cater for junior and BEE coal miners which did not meet RBCT criteria as well as for certain "niche" coal markets.
The MCT is owned by shipping and transport group Grindrod which Muller said has committed to spending R186m on upgrading and expanding the facilities at the MCT.
This will be done in two stages. The first will be to raise the MCT’s throughput capacity to 3Mt/year through upgrading existing facilities and this would be carried out by 2008.
The second stage is intended to increased throughput
capacity to 6Mt/year. That should happen by 2010 but Muller said it will only take place once management is satisfied there will be an increase in railage capacity to get those volumes of coal to Maputo.
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