In the years since the signing of the bilateral agreement between Botswana and Namibia in 2014, seaborne coal prices have sharply declined as the world has moved towards cleaner energy sources.
A feasibility study has never been done for the TKR and while one was planned in 2016, only a market study was produced focusing on the project economics of running coal on the 1,500-kilometre line.
Officials said the feasibility study would update the project costs from the original estimate of $11 billion and guide the funding model, which is expected to be a private-sector-led affair.
Johannes Tsimako, deputy permanent secretary in the Ministry of Transport and Public Works, told the recent Africa Mining Summit that while the feasibility would underpin the project economics, there was also a social element to the TKR.
“The feasibility is very key and there were a lot of heated debates that took place with many saying the project has to be done. “We need that information to give to those who would want to develop the project. “Socially the project makes a lot of sense, but there are chances that the feasibility may not say so,” he said.
Separately, analysts close to the latest developments told BusinessWeek the eagerly-awaited project was facing key decisions going forward.
“Kazungula Bridge failed a feasibility; it said no but they went ahead and now look at it. “Feasibilities are to say what is possible, what should be avoided and what is the best option. “This one is likely going to be half feasible and half social or dominantly social,” an insider close to the project told BusinessWeek.
The project enjoys strong political will in Botswana and Namibia, with the responsible ministers from both countries meeting frequently for updates and stock-taking. SADC also regards the TKR as a key regional economic corridor, which would connect the Indian Ocean to the Atlantic Ocean in Southern Africa, providing a desperately required alternative to the congested port at Durban.
Transport and Public Works minister, Eric Molale, previously told BusinessWeek that investors from across the world had been making unsolicited bids and other forms of interest for the TKR, as it represents the strongest alternative away from troubled ports in South Africa.
The regional powerhouse’s rail and port network is dilapidated due to years of non-maintenance, while corruption and increasing traffic have worsened the waiting times and costs at the different ports, especially Durban.
“The world is telling us that they are awash with money. The UAEs, the Qataris, the Chinese, and the Indians have all come to say this is not a long line for them and comparatively it is a very short line which they can do very quickly. They say they have built longer. “Both our governments do not have money, but the business has a very good payback and investors can be able to recoup their investment quickly. “There are other private sector players waiting to evacuate their products through that rail,” Molale said.
