Any idea needs a great team to make it a reality. We are pleased to announce the Capiro! team who will lead the CapetoCairo initiative. Tana, Jack and Vivek bring with them industry, strategy and technology experience that together will build the momentum. Check out their bios on the Capiro! team page.
To make a success of an idea, however, requires collaborators and supporters from a multitude of industries and interest groups. One of the key priorities for the team will be to build this support base alongside growing the capabilities of the team. If you wish to become a support simply get in touch and get on board.
In 2011 the African Development Bank (ADB) concluded that in order to enhance the economic integration of the Southern African Development Community (SADC) – A region that represents 40% of sub-Saharan GDP – a key piece of infrastructure had to be built at the fairly nondescript town of Kazungula.
Location of Kazungula Bridge
Some Context
Located approximately 60km west of the famous Victoria Falls, the location of the Zambian town of Kazungula is unremarkable save for the following fact: the 4 national borders of Namibia, Botswana, Zambia and Zimbabwe meet at a single point in the middle of the might Zambezi River. In the days when the Zambezi was thought to be navigable (and therefore able to link the rich African interior to the Indian Ocean), access to it was considered vital. Thus came about the curious wedge of Namibia (then known as German Southwest Africa) between Angola (then a Portuguese colony) and Zimbabwe (what was then a British territory).
The Zambezi is not navigable along its entire length (we draw your attention to the Victoria Falls), but Kazungula nonetheless remains a strategic crossing point due to its position in the north-south trading corridor through the SADC region. A ferry service currently acts as a border crossing between Zambia and Botswana, but it is notoriously inefficient. According to ADB, commercial traffic can take up to 10 days to clear immigration. However, this is mercifully more expedient for tourists who are on their way to Chobe National Park in Botswana, which is bewilderingly rich in wildlife.
The bridge under construction
The Corridor
The ‘North-South Corridor’ is a key trade route identified by ADF. Approximately 2800km long, it stretches from the mining region of Lubumbashi in the Democratic Republic of the Congo to the port city of Durban in South Africa. Along the way it passes though the Copperbelt (Zambia’s industrial heartland) and Gaborone, the capital of Botswana. With spill over effects, corridor further integrates Namibia, Zimbabwe, Lesotho and Eswatini.
This north-south corridor is primarily road-based and the Kazungula crossing point is a critical bottleneck that prevents the flow of goods due to the inefficient infrastructure. An improved crossing not only provides the opportunity to increase the capacity and speed of transit, but it also introduces an alternative mobility mode: railway transportation.
The Bridge
At the time of writing, the project is well and truly on its way to completion. The most obvious physical aspect of bridge is the curved route it takes across the Zambezi. The mystery dissolves once the national boundaries are revealed. We speculate that the curve allows the bridge to cross through the opening in the Zambian border, which is only 150m, formed by the Botswanan border. This avoids crossing Zimbabwean airspace – and the obvious complications that would accompany a tripartite agreement.
Here are some key data for the project due to open in late 2020:
It is a 925m long, 18.5m wide viaduct across the Zambezi River
One-stop border crossing facility located on the Zambian side
A strategic crossing over the Zambezi River
Financing the Project
As the Victoria Falls Bridge demonstrates, crossing the Zambezi is no small feat. And whilst Botswana is a middle-income economy, the project would be an extremely costly undertaking (approximately 1% of Zambian GDP).
Recognising the potential regional impact of the crossing, the ADF through its African Development Fund (ADF), the Japan International Cooperation Agency (JICA ) and the EU-Africa Infrastructure Trust Fund (ITF) provided a loan to the governments of Zambia and Botswana amounting to 90.8% of capital expenditure (see table), 1.8% presenting a grant by ITF for the establishment of the Kazungula Bridge Authority that will manage the asset.
The loans from ADF and JICA are zero interest (we at Capiro! note with glee), with a tenor period of 50 years inclusive of a 10 year grace period. The executing agency for the project is a combination of the Zambian and Botswanan road authorities. Adjusting for the usual capriciousness of projects, from what we can observe the governance of the project is meeting its objectives and the crossing is expected to open late 2020.
Once operational, the bridge will be managed by the Kazungula Bridge Authority, which will be set-up using the ITF grant. In effect, the project will be run similar to other trans-boundary projects that are essential for landlocked countries such as Botswana and Zambia (especially the latter). Notable examples are the Tazara Railway and Kariba Hydro Electric Dam.
Economic Sustainability
Delivery of the project is one thing, ensuring that it survives to fulfil its purpose is quite another. An anecdotal survey of major infrastructure across the continent paints a dismal picture of asset management. Simply put, adequate maintenance regimes aren’t in place. The Kariba Dam down the river is a fine example of this phenomenon. Therefore economic sustainability was placed at the heart of this project.
Evaluation of economic sustainability was based on the economic internal rate of return (EIRR) and the net present value of toll revenue. With an assumed opportunity cost in Zambia of 12%, the base case of the project yielded an EIRR of 23% and a benefit-cost ratio of 2.34. Even with an increase in costs of 20% and reduction in benefits of 20%, an EIRR of 17.5% and benefit-cost ratio of 1.56 provided a convincing case for financing the project. The opex (cost of operating the bridge) was intended to be covered by the toll revenue. A conservative assumption of 2.5% annual growth in traffic and 5% annual growth in opex were assumed and found to be covered by projected toll revenue.
We find it interesting that this was based purely on the current modes of transport serviced by the ferry crossing. Therefore this did not account for rail mobility – such as Capiro! – or even the commercialisation of lands adjacent to the crossing (i.e. renting land near the bridge). This means that the bridge should more than be able to pay for itself!
Implication for Cape to Cairo
Achieving the vision of connecting Cape Town to Cairo by rail, uninterrupted, will require the construction of strategic assets similar to the Kazungula Bridge. This project is an excellent example of how assets with broad regional – or continental – importance can be delivered: Through the concerted effort of the right stakeholders, sound economic rationale and execution capability. (We will aim to demonstrate this through a feasibility study we will conduct.)
Of course, what this project does mean is that another potential route opens up for the Cape to Cairo route – via Botswana! With the Kazungula crossing, it appears as though the governments have committed to constructing a railway line between Livingstone (in Zambia) and Mosete (Botswana). A very exciting prospect indeed!
The main concern we at Capiro! have is that the railway track on the Kazungula Bridge will be narrow gauge rather than the standard gauge. One of the greatest obstacles to the vision is interoperability, which on an obvious level requires the tracks to be the same width. One step at a time…
In the meantime, this corner of Africa looks set to become a strategic economic asset with regional importance. It will cease to be a quick of the past and instead become a link to power future economic grown in the SADC region.
Activity abound in Africa! There is a lot happening out there – and we were pleased to see this project being announced recently: A brand new railway line between Zambia and Mozambique! It is being promoted by USA-based Railnet International, through what appears to be a special purpose investment vehicle, Magcor International.
The scheme itself is very exciting, and from the announcements, this is what we have been able to learn about the project:
Start: Copperbelt Province in Zambia’s industrial heartland. Likely to start in the copper mining centres of Chingola or Kitwe.
End: the port city of Beira in Mozambique, which act as a key access point to the Indian Ocean for the landlocked countries of Zambia, Zimbabwe and Malawi.
Length: ~2100km. According the company’s announcement, it will be built parallel to the existing line.
Travelling speed: 120km/h for freight trains and 160km/h for passenger trains.
The exciting news for us Capiro! (Cape to Cairo!) fans is that approximately 1000km of this new line will be along a vital link of the Cape to Cairo link. The total distance of Capiro! is approximately 9800km (depending on route), which means this project could create approximately 10% of the line infrastructure.
Overall we are pretty excited about this prospect. At the time of the announcement – just as Covid-19 has shutting down global activity – the stated ambition was commencement of construction in January 2021. This now seems ambitious. In addition, it is not clear what the track gauge (width) will be – which is one of the major stumbling blocks for the Capiro! ambition. But for the speeds required, it would be reasonable to assume standard 1.435m gauge. There are many different gauges in use across Africa, which means that you would have to change trains many time on your way from Cape Town to Cairo.
At the time of writing, neither the cost nor the identities of the investment firms have been identified. However, we estimate the cost around US$15Bn for a standard gauge railway. A major undertaking that could potentially bring much needed modern infrastructure to the region. We will keep a keen Capiro! eye on the project!
