The Strategic Importance of Railways in Africa. Overview of the Present System and Challenges to Implement High Speed Rail Network,

1. AFRICA FORUM 2016 MAURITIUS High Speed Rail for Africa – A Conceptual View Elvin Harris: President CILT-SA

2. 2 Contents Africa high speed rail 1. An overview of High Speed Rail Systems 2. The case for intra-Africa integration and connectivity 3. Africa transport networks - current and future 4. Summary and recommendations

3. 3 High Speed Rail System – An Overview The High Speed Rail (HSR) System objectives are:  Support population and economic growth.  Enable social and economic development in regional and urban areas.  Relieve transport congestion of existing and future systems.  Help support land use objectives designed to achieve sustainable ecological and environmental outcomes given continued urbanisation, higher density living and the growth of regional centres. Lessons learned from international experience 1. Integration  HSR has the effect of examining how other modes will meet future transport, economic development and policy objectives.  Integration ensures that HSR complements existing transport modes.  Lesson learned: HSR must support complementary transport services. 2. Support for regional land use goals  HSR programs represent an opportunity to transform cities and regions over time.  Properly planned, HSR should link regional centres to major metropolitan areas and provide significant development opportunities.  If properly integrated into the transport system, population and economic growth can be directed to support regional land use planning goals.  Lessons learned: HSR stimulate regional development. 3. Capital costs  There are only a few examples of a HSR service fully recovering capital costs except in the very long term.  Operations and maintenance costs may be self-funding, but infrastructure costs are unlikely to be fully recovered without a significant government contribution.  Lessons learned: capital costs are unlikely to be recovered. 4. De-congestion of existing transport systems  Provides an opportunity to reallocate intercity patronage demand and improve capacity on existing constrained regional rail systems.  City-to-city HSR links can ease congestion  HSR projects can benefit freight operations by creating capacity on existing networks.  Lessons learned: Optimise infrastructure performance.

4. 4 Exploitation models • Complete separation between HS and conventional services, each with its own infrastructure. • One of the major advantages of this model is that market organisation of both HSR and conventional services are fully independent • Example: Shinkansen Model • HS trains run either on specifically built new lines or on upgraded segments of conventional lines. • Building costs are reduced, which is one of the main advantages of this model. • Example: French Model • Some conventional trains run on HS lines. • The main advantages of this model are the saving of rolling stock acquisition and maintenance costs, and the flexibility for providing intermediate HS services on certain routes. • Example: Spanish Model • Allows for the maximum flexibility, since this is the case where both HS and conventional services can run (at their corresponding speeds) on each type of infrastructure. • The price for this wider use of the infrastructure is the significant increase in maintenance costs. • Example: German intercity trains

5. 5 High speed lines in the World (as at 1 November 2013) Country Region In Operation (km) Under construction (km) Planned (km) Total distance (km) Speed (km/h) Gauge (mm) China Asia 9,867 9,081 3,777 22,726 200-350 1,435 Spain Europe 2,515 1,308 1,702 5,525 200-300 1,435 Japan Asia 2,664 779 179 3,622 110-320 1,435 Turkey Europe/Asia 444 603 1,758 2,805 160-250 1,435 France Europe 2,036 757 2,407 5,200 300-320 1,435 Germany Europe 1,334 428 495 2,257 230-300 1,435 Italy Europe 923 0 395 1,318 250-300 1,435 South Korea Asia 412 186 49 647 300 1,435 Saudi Arabia Middle East 0 550 0 550 300 1,435 Other Various 1,277 272 5,585 7,134 TOTAL 21,472 13,964 16,347 51,784 Source: Own analysis and International Union of Railways, High Speed Lines Around the World, Updated 1 November 2013

6. 6 High speed rail systems in the world - 2013 Source: International Union of Railways, High Speed Around the World, 1 November 2013

7. 7 High speed rail systems in the world - 2025 Source: International Union of Railways, High Speed Around the World, 1 November 2013

9. 9 Economic growth in the ‘African Lions’ expected be 7.2% on average over the next 9 years from 2014 to 2023 Economic growth in Africa is expected to be spearheaded by the ten economies below known as the ‘African Lions’. These countries are poised for rapid growth over the long term, and therefore investment opportunities abound. Country Average Annual Real GDP Growth 2014-2023 % Nominal GDP 2014f US$bn Business Environme nt Rating Population 2014f Mn Mozambique 9.9 17 34.3 27 Tanzania 8.5 36 39.0 51 Côte d'Ivoire 7.9 33 33.0 21 Uganda 7.6 27 40.2 39 Nigeria 7 351 39.9 179 Zambia 6.9 24 43.5 15 Angola 6.5 168 30.0 22 Ghana 6.4 48 46.0 26 Kenya 5.9 51 41.5 46 Ethiopia 5.6 43 32.9 97 Source: Business Monitor International

10. 10 Top 20 most populated economies in Africa (overlaid with South African Airways direct routes) Nigeria 173.6 2896 48.9 502.9 Ethiopia 94.1 426 36.3 40.1 Egypt 82.1 3159 49.4 255.1 Congo (DRC) 67.5 314 27.4 21.2 South Africa 52.8 6646 58.5 350.8 Tanzania 49.3 644 49 31.7 Kenya 44.4 966 46.2 42.9 Algeria 39.2 5384 49.8 211.1 Sudan 38 1587 23.6 60.3 Uganda 37.6 671 46.8 22.8 Morocco 33 3132 54.2 104 Ghana 25.9 1519 51.8 39.4 Mozambique 25.8 603 44.1 15.6 Madagascar 22.9 459 34.6 10.5 Cameroon 22.3 1328 43 29.6 Angola 21.5 6187 47.3 132.9 Cote d`Ivoire 20.3 1396 44 28.4 Niger 17.8 422 37.9 7.5 Burkina Faso 16.9 724 46.7 12.3 Malawi 16.4 375 46.4 6.1 POPULATION: Population, mn GDP: GDP per capita, USD RATINGS: Composite Rating, % GDP: Nominal GDP, USDbn South African Airways direct routes Source: Business Monitor International, South African Airways

11. 11 African population is expected to grow rapidly to 2040 and so will urbanisation Africa’s middle class, at more than ~300 million people and growing at a rate of 3.2% p.a. since 1983, will provide a formidable source of consumer demand; thereby increasing intra-Africa trade. Source: Socioeconomic Data and Applications Center (SEDAC), 2015; United Nations, 2011

12. There is significant Africa intra-trade potential Africa’s intra-regional trade is low and can only grow with industrial integration and infrastructure development 87 79 67 12 AsiaEuropeAmericaAfrica Africa’s intra-regional trade compared to major continents % 1 Port Management Association of Eastern and Southern Africa

13. 13 Through increased regional connectivity, intra-Africa trade has potential to grow from 12.8% (2012) Source: WTO Secretariat  Intra-African exports are fairly diversified, though still dominated by primary products.  Manufactured and intermediate goods appear to be of more significance in trade within regional groups.  Trade remains characterised by a small number of lightly processed exports with petroleum products accounting for nearly 33% of the value of intra-African exports in 2012, up from 25% in 2010.  There are different trading patterns in different regions and also in the pattern of goods traded within a region. In two of the five regions, North and Central Africa, intra - African exports account for only a small or trivial share of total exports by member states.

14. 14 Africa can benefit from integration and connectivity resulting in the free flow of goods, services, capital and people Source: ECA calculation based on COMTRADE Database  Economies that are more integrated into global production networks received the lion’s share of Africa’s imported intermediates (Egypt, South Africa, Algeria, Nigeria, Morocco, and Tunisia). These economies tend to source less than 5 percent of these inputs from the region, and this share has remained rather stable over the period considered.  This could indicate that the intermediate inputs required by these economies are too complex to be conveniently produced in other African economies.  At the other end of the spectrum, countries in Southern Africa appear to import roughly 75 percent of their intermediates from the regional market, due to the presence of a well-diversified neighbouring economy such as South Africa, capable of supplying the required inputs.  The low levels of connectivity between African economies are largely due to an incomplete legal architecture for regional integration, poor physical infrastructure and one-way trading relationships. Share of intermediate imports sourced from Africa (%)

16. 16 Africa has about 2.09 million km of roads of which 21.17% is paved • Many of Africa’s 54 countries are very small, with populations of fewer than 20 million and economies smaller than $10 billion—too small to grow on their own. • The infrastructure systems, like Africa’s borders, are reflections of the continent’s colonial past, with roads, ports, and railroads built for resource extraction and political control, rather than to bind territories together economically or socially. • The road infrastructure statistics in Africa show that 65% of the missing links in the Trans-African Highway (TAH) network are situated in Central Africa. Of all existing sections, only one third is paved in this part of the continent. • These issues indicate the particular difficulty that landlocked countries face in establishing international trade and transport. Source: Study on Programme for Infrastructure Development in Africa (PIDA), Africa's Infrastructure Outlooks 2040 (Nepad, African Union, AfDB)

17. 17 Current state of transport infrastructure in Africa The World Economic Forum’s 2012/13 Global Competitiveness Report show that only seven African countries’ transport infrastructure is above the global average. The African countries with better infrastructure are generally located in North and Southern Africa. Source: World Economic Forum, Global Competitiveness Survey 2012/13

18. 18 Current state of road infrastructure in Africa There are 11 African countries where the road infrastructure is better than the global average. The best ranked African countries are Namibia (35th), Rwanda (40th) and South Africa (42nd), while the worst-ranked are Guinea (140th), Gabon (138th) and Mozambique (135th). Source: World Economic Forum, Global Competitiveness Survey 2012/13

19. 19 Current state of rail infrastructure in Africa 19 There are only six African countries with better railroad infrastructure than the global average. Three of them (Morocco, Tunisia and Egypt) are in North Africa, while the remaining three (Namibia, South Africa and Swaziland) are from Southern Africa. Source: World Economic Forum, Global Competitiveness Survey 2012/13

20. 20 Cost of export from African countries by cost component (2012) At a global level, between 2006 and 2012, import/export costs have increased by 23% in nominal terms. A similar upward tendency has taken place also within Africa, mainly on account of rising costs for document preparation and inland transport. Source: ECA calculation based on Doing Business Database

21. 21 Cost of import into African countries by cost component (2012) PIDA’s vision for Africa infrastructure integration is to slash transport costs and boost intra-African trade. Transport efficiency gains will be at least $172 billion in the African Regional Transport Integration Network (ARTIN), with the potential for much larger savings as trade corridors open. Source: ECA calculation based on Doing Business Database

22. 22 Ease of travel within Africa compared to other regions  Free movement by people is supposed to be the hallmark of African integration, facilitating trade growth across the continent.  Research by McKinsey (2013) found that Africa’s laws on free movement remain generally restrictive despite political commitments to bring down borders.  Central Africa is the most restrictive region and West Africa the most liberal in terms of visa free travel.  Some African countries fail to provide even for strategic regional preferences when deciding visas.  North Americans, followed by Europeans, enjoy the most liberal entry into Africa. They get visa-free travel or can obtain a visa on arrival in at least half the countries on the continent.  Africans need visas to get into at least two thirds of other African countries. 1. No distinction made between tourist and business visa. Results are for tourist visas. Business visas may be required before arrival. Note: Based on data available end 2012. Source: This work was done as a collaborative effort between McKinsey, the AfDB and WEF Global Agenda Council on Africa.

23. 23 PIDA’s Vision 2040  Africa's competitiveness will be established in niche markets and in a growing spectrum of mainstream activities, including agriculture and manufacturing.  Africa's share of world trade will be much higher, at least twice today's share of 2%.  Up to 15 million new jobs will be created for the construction, operation and maintenance of PIDA projects, with many more millions created indirectly through the increased economic activity they will enable.  Intra-African trade share will double from the current levels of 12-13%.  Water resources and basins will be secured for future generations.  ICT bandwidth will handle demand swells by a factor of 20.  Access to electricity will be no less than 60% in any African country, providing access to an additional 800 million people. Source: Programme for Infrastructure Development in Africa (PIDA), Africa's Infrastructure Outlooks 2040 (Nepad, African Union, AfDB)  PIDA assumes that the average economic growth rate for African countries will be 6% a year between 2010 and 2040, driven by a surging population, increasing levels of education and technology absorption.  This growth implies that, over the 30 years to 2040, the GDP of African countries will multiply six fold, and the average per capita income will rise above $10,000 for all countries. This continuing growth and prosperity will swell the demand for infrastructure.  Assuming that this growth is achieved, transport volumes will increase 6-8 times, with a particularly strong increase of up to 14 times for some landlocked countries. Port throughput will rise from 265 million tons in 2009, to more than 2 billion tons in 2040.  This growing infrastructure demand presents a critical challenge for Africa as it competes in global and regional trade markets that rely on just-in-time production and flexible, speedy and reliable delivery. Thereby closing the infrastructure deficit is vital for economic prosperity and sustainable development.

24. 24 Planned transport networks according to PIDA 2020 & 2040  The essential benefit of regional infrastructure is to make possible the formation of large, competitive markets in place.  Regional infrastructure does this by lowering transport costs (in particular to and from hinterlands and landlocked countries); establishing connectivity so that goods can reach markets and people can exchange information and reach jobs; providing lower- cost energy for expanding agricultural, industrial and mining production.  The transport programme links the major production and consumption centres, provides connectivity among the major cities, defines the best hub ports and railway routes and opens the land-locked countries to improved regional and continental trade. Source: Programme for Infrastructure Development in Africa (PIDA), Africa's Infrastructure Outlooks 2040 (Nepad, African Union, AfDB)

25. 25 The African Regional Transport Integration Network (ARTIN) in 2009 and 2040 Source: Africa Transport Outlook 2040

26. 26 Forecast capacity gaps in African Regional Transport Integration Network (ARTIN) corridors Source: Africa Transport Outlook 2040

27. 27 African Action Plan (AAP) priority programmes in transport 2010–2015: Railway projects Title Region Estimated Cost & Commitments Development Stage Description Regional Contact Isaka‐Kigali‐Bujumbura Railway East US$ 4 billion * US$ 1.5 million (feasibility study) IPPF Stage 2: Feasibility/ Needs Assessment A feasibility study is underway for the extension of the railway line from Isaka (Tanzania) to Kigali (Rwanda) and Bujumbura (Burundi). This project is part of the Dar es Salaam‐Kigali‐ Bujumbura Central Transport Corridor. The new railway line would provide an alternative route to the seaport of Dar es Salaam for landlocked countries Rwanda and Burundi, promoting inter‐state trade and integration. EAC AfricaRail West US$ 1‐1.5 billion (Phase 1 Cotonou‐ Parakou‐Dosso‐ Niamey) US$ 4 million (detailed studies) Stage 3: Programme/ Project Structuring and Promotion AfricaRail is a project to rehabilitate and construct 2,000 km of new railway to link the railway systems of Ivory Coast, Burkina Faso, Niger, Benin and Togo (all 1,000 mm narrow gauge), including a train service linking the ports of Lomé and Cotonou. Specifically, the project involves the following sections: Benin to Niger from Parakou‐Malanville‐Gaya‐Dosso‐ Niamey (334 km); Burkina to Niger from Kaya‐Dori‐Terra‐ Niamey (430 km); Dori‐Tambao (90 km); Togo to Benin from Lomé‐ Anecho‐Segbohue (90 km); and Burkina to Togo from Ouagadougou‐Blittaw (746 km). A future stage of the project would link Mali (1,000 mm), Nigeria (1,067 mm gauge changing to 1,435 mm) and Ghana (1,067mm gauge). ECOWAS Brazzaville‐Kinshasa Rail/Road Bridge and Railway Extension Kinshasa ‐ Ilebo Centra l US$ 7.7 million (Feasibility Study) *ABD/ADF Stage 2: Feasibility/ Needs Assessment This rail and road bridge will link the two capital cities of Brazzaville (Republic of Congo) and Kinshasa (DRC), across the Congo river. The bridge will complete a missing road link of the Trans‐African Highway 3 from Tripoli‐Windhoek‐ Cape Town, and with the railway extension will fill a major gap (700 km) in the Point Noire‐South‐Eastern Africa railway network. The bridge and extension will promote regional integration and economic development in both countries, and also serve as an inter‐state and sub‐regional Trans‐African link. A feasibility study is underway. ECCAS Source: The AU/NEPAD African Action Plan 2010‐2015 (2010)

29. 29 High Speed Rail System as a tool for regional integration and development Around the World  High Speed Rail (HSR) has become worldwide one of the most prominent transport modes in recent years.  Several countries in Europe, America and in Asia are extending their networks and pushing these developments through the planning and construction of new lines.  Apart from connections between two metropolitan areas; cities and regions also benefit in a social or economic way from HSR and obtain HSR connections as a location advantage in comparison to cities or regions without such a link.  The benefit is through shorter travelling times and lower travel costs for users. These benefits are assumed to be an initial starting point for additional development in cities or regions. Potential benefits for Africa  Potential to connect metropolitan areas, cities and regions and help to reduce travelling times and lower travel costs for users.  The project implementation can fast-track Africa’s laws aimed at allowing free movement of goods, services, capital and people, leading to the formation of large, competitive markets Africa.  The HSR can link major production and consumption centres and open up land-locked countries in order to improve inter–Africa trade and allow these countries to access seaports.  Will boost Africa’s economic growth, through the development of Africa’s manufacturing industry and increased job creation opportunities.  Can attract and generate proprietary rail technology and investments to the continent.  Dual use of rail infrastructure for freight transportation must be investigated to reduce financial risk and improve investment appraisal of project (refer to exploitation model).

30. 30 Scenario 1: High Speed Rail System route and construction phases

33. 33 BACK UP SLIDES

34. Economic Benefits of High Speed Rail • High speed rail delivers fast, efficient transportation so riders can save time, energy, and money. • HSR is extremely reliable and operates in all weather conditions. • HSR is not subject to congestion, so it operates on schedule every day without delay - especially during rush hour and peak travel times. • HSR spurs the revitalization of cities by encouraging high density, mixed-use real estate development around the stations. • HSR also fosters economic development in second-tier cities along train routes. • HSR links cities together into integrated regions that can then function as a single stronger economy. • HSR broadens labour markets and offers workers a wider network of employers to choose from. • HSR encourages and enables the development of technology clusters with fast easy access between locations. • HSR also expands visitor markets and tourism while increasing visitor spending.

35. High Speed Rail in Nigeria • Nigeria’s high speed rail project initiated by President Goodluck Jonathan has been rated among the global top 100 world-class infrastructure projects by KPMG. • The rail will connect Lagos, Kano, Kaduna, Warri, Bauchi, Abuja, and Port Harcourt and will cost the country $13 billion, much of which will be financed with a loan from the Export Import Bank of China. • The China Railway Construction Corporation has secured the contract to build the 3,218-kilometre network, which will be digitally operated using fibre- optic cables, radio communication and wireless services. • The project is designed to cover 54 stations and will take 25 years to build.

36. High Speed Rail in Morocco • The first of 12 Alstom Duplex high speed trainsets for national railway ONCF was unloaded at the Port of Tanger on June 29. It had been shipped from the Port of La Pallice near La Rochelle in France onboard Ville de Bordeaux, a roll- on roll-off vessel custom-built to carry Airbus A380 aircraft sections. • The double-deck trainsets are based on the TGV Duplex design that has been in service with French national operator SNCF since 1996, but adapted for local operating conditions.

37. • They are to be used on Tanger – Casablanca services, using a 320 km route including a 183 km high speed line between Tanger and Kénitra which is being built for operation at up to 320 km/h. From Kénitra to Casablanca the services will use a conventional line upgraded for speeds up to 220 km/h. • Opening of the new line was planned for December 2015 when construction was launched by King Mohammed VI and French President Nicolas Sarkozy in September 2011, but delays to the infrastructure works mean this has now been put back to 2017. • The rolling stock contract worth almost €400m was signed by ONCF and Alstom in December 2010. The trainsets are to be maintained by Société Marocaine de Maintenance des Rames à Grande Vitesse, a 60:40 joint venture of ONCF and SNCF under a separate 15-year deal worth €175m. High Speed Rail in Morocco

38. 38 Interconnectivity & interoperability  Cape-gauge (1067mm) provides flexibility for SADC rail growth as an existing interconnected system  Restore rail infrastructure to agreed standards  Axle loading, bridge and tunnel structures  Re-establish disconnected rail links  Introduce minimum maintenance standards  Ensure longevity and sustainability of: Infrastructure, and Rolling stock  Productivity and Efficient use of rolling stock Cooperate to enhance inter-connectivity and interoperability Enhanced through Collaboration - Corridor approach Angola Algeria Botswana Burkina Faso Cape Verde Egypt Gabon Côte d’Ivoire Djibouti Ghana Guinea Namibia Nigeria Zambia Mauritania South Africa Sudan Senegal Swaziland Tanzania Uganda Zimbabwe Burundi Western Sahara Democratic Republic of Congo South Sudan Ethiopia Kenya ChadNiger Libya Tunisia Gambia Sierra Leone Liberia Lesotho 1435 mm 1065/1067 mm Main gauge 1000 mm 1000/67 mm No railways 1435/1000 mm 1435/1055 mm 950 mm African Railways Gauge

39. SADC Challenges The SADC region is regarded as the next growth frontier due to its extensive minerals wealth, growth in consumer populations and relatively good infrastructure, road in particular:- • Key challenges hinders its growth and trade remain strained; • Poor infrastructure, low density across transport networks, inefficient border processes and fragmented regulatory environments continue to dog it; • Much of rail and port infrastructure was built for resource extraction rather than to facilitate trade; • Landlocked countries within the region require efficient transport links to and from the sea in order to enjoy competitive prices for landed goods and exports to global markets; • Most ports within the region currently operate near capacity and experience delays due to poor integration with other transport modes and slow clearance processes; and • The SADC region must attain the goal of becoming a seamless, cost-effective, fully integrated and internationally competitive region with appropriate and substantial investments in road, rail and ports to secure the future of the region.

40. Mineral deposits are scattered around the SADC region and it needs close collaboration with regional countries for these minerals to be transported 40

41. 41 The North South Corridor will play a Vital role in the region and will handle over 70 million tonnes in 2040.

42. Corridor Focus Building on Inter-Railway Agreements…  Bilateral agreements aim to promote inter-operability between SADC railways and typically define operational, safety and technical standards between corresponding countries …To Develop Corridors  Corridors are a broader concept defined by flows of goods across railway and country boundaries in a seamless manner and require cooperation between multi-role players Zambia Botswana Namibia Tanzania Democratic Republic of Congo Angola South Africa North-South Corridor East West Corridor Maputo Corridor

43. As part of the AU initiatives, South Africa is the Champion for the North South Corridor This corridor is strategic to Sub Saharan Africa Source: Transnet Africa Research, PIDA projects, NEPAD 43

The Strategic Importance of Railways in Africa. Overview of the Present System and Challenges to Implement High Speed Rail Network,

Chartered Institute of Logistics and Transport (International)

The Strategic Importance of Railways in Africa. Overview of the Present System and Challenges to Implement High Speed Rail Network,