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Infrastructure investment is beckoning a new era for Walvis Bay, as Aidan Grange explains. End Quote

(1888PressRelease) September 03, 2014 - The Namibian Government is investing heavily and also partnering with the private sector in its port and transport infrastructure upgrade programmes as it attempts to position the country as a competitive regional cargo hub and logistics centre for sub-Saharan Africa.

Critical to this objective is the development of a second container terminal at Walvis Bay, the building of a new railway link with Botswana and expansion of the Walvis Bay logistics corridor, which comprises the Trans-Kalahari, Trans-Caprivi, Trans-Cunene and Trans-Oranje links.

At a ground-breaking ceremony for the new container terminal earlier this year, Namibia's president Hifikepunye Pohamba said: "The Namibian Ports Authority (Namport) is a strategic economic asset for this country and the NA$3bn (US$282m) expansion project is part of a long-term goal to improve our infrastructure and promote intra-regional trade."

He stressed the significance of the bilateral agreement between Namibia and Botswana for the construction of the 1,500km railway, saying: "This will significantly contribute to and strengthen Namibia's position in terms of trade.

"In the same vein other landlocked countries will benefit from the railway as it will provide them with a choice of corridors to choose from. At the same time we are upgrading various roads that will also unlock economic benefits to the country."

Namport hope
But it is the new Namport Container Terminal (NCT), which is being developed on 40ha of land, that is viewed as being one of the most critical elements in the Government's plan to raise the country's trading profile.

NCT will add 600m of quay to the port's existing 1.5km wharfage line raising in its overall container-handling capacity rising to slightly over one million teu a year. Currently, Walvis Bay's annual design throughput is in the 350,000 to 400,000 teu range.

Funding for the project is in place with the African Development Bank (AfDB) having signed a sovereign guaranteed loan worth NA$2.9bn (US$272m) with Namport late in 2013. The terminal is being built by China Harbor Engineering Company Ltd.

In addition, AfDB has advanced about NA$ US$2.3 million (US$216,000) to the Namibian Government to support and encourage companies to invest in the infrastructure and systems needed to offer port users a wider range of value added freight and logistics services.

Grand ambitions
These activities are viewed as being important if Walvis Bay is to transform itself from a small port handling local and national cargo for a population of a little over two million people into a regional cargo processing centre serving Botswana, Zimbabwe, Zambia, the Democratic Republic of Congo, Angola and even locations as far east as Guateng province in South Africa. The Southern Africa Development Community is home to at least 330m people.

Bisey Uirab, chief executive of Namport and chairman of the Walvis Bay Corridor Group (WBCG) - the public-private partnership established to promote the utilisation of Walvis Bay and its inland freight networks - said: "Our logistics hub provides a seamless transport and logistics solution to ensure that these potential consumers get their goods at the right time and in the most cost effective manner."

He added: "We need to develop ahead of demand so that we can be a few steps in front of our competitors in capturing the region's emerging business opportunities. We must modernise and transform our modes of transport as well as infrastructure, including IT systems, so that they complement each other to provide a seamless cost-effective service and push for non-tariff barriers in the region to be reduced.

"Our transport community must co-operate and commit to the logistics hub as a matter of priority so that we can make Walvis Bay the Singapore and Dubai of Africa by 2030."

Walvis Bay's logistics hub concept is an integral part of the WBCG's plan to develop Namibia's largest port as the preferred gateway for southern Africa.

Recently, Botswana Railroads (BR) opened a dry port in Walvis Bay. BR's commercial manager Mthulusi Lotshe said the new facility, in which NA$60m (US$5.6m) is being invested, would "strengthen multimodal supply chain solutions and create opportunities for new services, while reducing total transport and logistics costs and journey times for the region."
The executive added: "Our objectives for the dry port are to improve cargo processing through co-ordinated operations, facilitate the collection and distribution of local, regional and international cargo and to better integrate Botswana and the SADC region into Walvis Bay port."

Zambia connection
In Zambia, the government is focused on improving its transport links, with five main rail line corridors under development, including the construction of a link between Livingstone and Katima-Mulilo which in turn connects to Walvis Bay. Such a line would reduce the cost of moving goods to/from the southern and western regions of Zambia.

But highways are not being ignored, with the Road Development Agency of Zambia planning to build a new road linking the border town with Namibia of Sesheke with Mulobezi, Kaoma and the Copperbelt region of the country. This also borders Congo's mineral-rich Katanga Province.

The new routing will cut travel distances by a third to 800km, resulting in faster transit times and significantly reduced transport costs for cargo moving to/from Walvis Bay. Ultimately, this will raise the Namibian port's overall competitiveness in this transit corridor and could lead to more importers/exporters selecting this routing option rather than traditional connections via South Africa.

Meanwhile, Namport is also planning to build an entirely new cargo-handling complex to the north of the existing port and located between the existing facilities and the town of Swakopmund. Dubbed the Southern African Gateway Port (SAGP), it will eventually comprise of 10km of berthing line and have the capacity to process up to 100 million tonnes of bulk cargo a year.

A bulk fuel storage and cruise terminal will also be developed within the 1,330ha complex in a project that is expected to cost in excess of NA$30bn (US$2.8bn).

According to Namport's Mr Uirab, SAGB will be financed with a mix of state funding and private investment and be developed over several phases. To date, the Government has pledged NA$1.5bn for the construction of the oil storage facility which is expected to be completed during 2018.

Future plans
Namibia's president Mr Pohamba views the new developments will boost the port's throughput volumes substantially and sees the new container terminal and associated developments as allowing a doubling in volumes by 2017.

This represents a huge challenge. While Walvis Bay has emerged as an effective and alternative trade route for southern Africa, traffic volumes remain modest and a considerable number of beneficial cargo owners and logistics service providers use Durban in South Africa as their gateway into southern Africa. This is particularly the case for cargo moving to/from Zimbabwe, Zambia, Botswana and Asia.

Meanwhile, Transnet SOC, South Africa's state-controlled company which owns/operates most of the nation's ports, container terminals, freight rail and pipelines networks, is keen to extend its role across Africa with the primary objective being to attract more cargo to its facilities.

Despite the competition, Walvis Bay looks to be on track to become a bigger gateway for southern African landlocked nations.

Taking the coal line
Botswana's coal mining industry is likely to be among the biggest beneficiaries from the construction of the 1,500km Trans-Kalahari railway linking the landlocked country with Namibia. The link will help to open up the vast reserves of coal - estimated at 212bn tonnes - in the eastern region of Botswana and provide a cost-effective supply chain solution to move that commodity to the port of Walvis Bay.

At a signing ceremony in March 2014 between the governments of Namibia and Botswana for the rail project, Erkki Ngmintina, minister of mines and energy in the Namibian Government, said: "The signing of the Trans-Kalahari Railway agreement provides an added impetus and lays the groundwork for industrialisation. It does not hamper existing gateways, but creates a new path for additional role players."

Potentially, the port will see a substantial increase in cargo volumes and revenue, thus justifying Namport's decision to invest in its Southern African Gateway Port project where at least 65m tonnes of coal exports alone are expected to be processed.

In addition to the railroad's primary purpose of moving coal, opportunities are expected to open up for shippers/consignees of project, general cargo and containers and new intermodal railyards are expected to be developed, thus creating new transport options for Malawi, Zambia and Zimbabwe.

Tom Alweendo, director-general of Namibia's National Planning Commission, believes the new rail line will significantly boost trade between Botswana and Namibia, which he said amounted to less than NA$300m a year, excluding diamonds.

He also sees the railway and expansion of the port as assisting the WBCG's SADC's regional economic and social integration programmes.

It is hoped that the railway and associated infrastructure, which will cost between US$9bn and US$10bn to build, will become operational in 2019.

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