Waterway project raises $2.5bn
by Taonga Sabola, 23 February 2006 - 07:44:25
Prospects of having the Shire-Zambezi Waterway in the near future look promising as the project has netted $2.5 billion of the estimated $6 billion required to see it through.Victor Lungu, Director of Transport Planning in the Ministry of Transport and Public Works, said in an interview last week there are very high hopes of getting the balance because more people have shown interest in the project.“We just need to put in place proper institutional structures to get the remaining money,” said Lungu.He said the money is mainly coming from foreign investors—the Development Bank of Southern Africa (DBSA), the Amalgamated Banks of South Africa (ABSA) and International Finance Corporation (IFC), a development financing arm of the World Bank.Lungu said the local private sector’s response has not been all that encouraging. “But they [private sector] need to play an active role by investing in this project which will bring high returns in the future once operational,” he said.He added that his ministry will conduct a number of meetings with the private sector to enlighten them on the benefits of the project.Members of the private sector last year asked the authorities of the project to come up with a feasibility study before they can pledge their support. This is yet to be done.They also asked government to give a breakdown of the $6 billion project cost which they said was scaring.The local private sector expressed its sentiments during a meeting with port authorities organised in Blantyre last July to lobby for their support.The Shire-Zambezi Waterway project is expected to provide the shortest route to the sea for landlocked Malawi as it connects the southern district of Nsanje and Indian Ocean port of Chinde over a 238-kilometre distance.A short route to the sea will mean a significant cut in costs for Malawi’s imports and exports which are high due to equally high transport costs.The country has one of the highest transport costs in the world estimated to contribute 30 percent to cost of exports and 50 percent or above to import costs, representing about $175 million total annual import bill which is currently growing at a rate of 7 to 8 percent annually.The project has generated interest in the region as indicated by the visit of Common Market for Eastern and Southern Africa (Comesa) Director of Infrastructure Amos Marawa who inspected the waterway last October.Marawa said the project will benefit many countries as it will make Malawi one of the main transportation hubs in Comesa. He said it will also help countries like Zambia, Zimbabwe, the Democratic Republic of Congo (DRC), Burundi, Rwanda and Tanzania by providing access to Indian Ocean ports through the Mtwara, Nacala and Sena corridors.Zambia and parts of DRC are expected to benefit from the project through the rail connection from Mchinji to Chipata. Lungu said studies are underway to connect the now dormant Lilongwe-Mchinji rail line to Zambia.The Egyptian Government also promised to support the project. Its experts were supposed to visit the country last year but failed due elections in their country, according to Lungu.“It’s not that they have withdrawn their interest in the project. We are still discussing with them on when they can come and they should be able to visit the country any time within the first quarter of the year,” said Lungu.Construction of Nsanje Port started with pomp last October but halted due to the rains.