A Spoornet consortium signed a concession agreement with the Mozambican government on Monday for the upgrade and running of the Maputo corridor line for the next 15 years.
The agreement, signed between Spoornet and its partner New Limpopo Bridge Projects Investments (Pty Ltd)(NLBP) will pay the Mozambique authorities an estimated $67,7-million over the initial 15-year period of the concession.
In addition, the Spoornet consortium will invest $10-million to rehabilitate the railway line to bring it up to the same standard as the current Spoornet network. The possibility of electrifying the line from Komatipoort to Maputo will also be considered if traffic volumes increase.
The agreement allows for a 15-year concession that can be extended up to a maximum of 25 years, enabling Spoornet to operate trains on the line that runs between Ressano Garcia and Machava, on the outskirts of Maputo.
For the first time in its history, Spoornet will run trains from South Africa through to Maputo in Mozambique.
The agreement took more than 10 months to negotiate with both parties having to make certain concessions. It allows for a balance between the profit objectives of the Spoornet consortium and the social needs of the Mozambique government.
The process to grant a concession for the railway line started in 1997 with a technical and financial feasibility study by Spoornet.
The Spoornet consortium, known as the Ressano Garcia Railway Company, is made up of Spoornet and NLPI, an international group of companies that focuses on infrastructure investment projects.
It is projected that the traffic will increase from three million tons next year to more than 6,8 million tons annually in 15 years time.
Potential projects like the Maputo Iron and Steel Plant will contribute to the growth. The consortium also expects coal exports through Maputo to increase to more than the expected 4,3-million tons in 15 years if investment is made in the coal terminal at the port of Matola.
The next phase of the process will start with the Spoornet consortium putting in place a transitional team and finalising the financing document with financial institutions.
The 15-year concession period begins on April 1. – Sapa