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Professor Chirwa and the ZRL revival

10 Feb

Truth be told it is always a huge motivation when someone outlines refreshing aspirations. We need to dream more as a nation and it starts somewhere.

This is what I note in Professor Clive Chirwa’s vision for Zambia Railways Limited (ZRL). Having read the document that espouses this vision, one cannot help hoping for better things for our country.

A dream is born

The revival of ZRL is set out for a four year period (2013-2017) with an estimated cost of $1.5bn. The ambitious aspiration and vision is for the railway network across the country to be rehabilitated and upgraded. The current network spans 1,062km of mainline and branch lines.

Professor Chirwa spells out that the existing network will be revamped while a new one will also be constructed alongside the current. Links are planned into Botswana, Zimbabwe etc among others.

To achieve this, the project will be undertaken over three clearly laid out phases. The initial phase is likely to gobble $120mn to set it off.

There undoubtedly will be a lot of resources to construct an underground rail network, upgrade and electrify the entire chain cross the country. It can be noted that inspiration for the project is drawn from the structure of the United Kingdom (UK) network to some recognisable extent. Nothing ill about that. This is what is termed as best practice.

Financing the dream

When we dream, our aspirations spur us onto achieving what we desire. Zambia needs this adrenaline in barrels.

However, ZRL is a public asset as it stands. It therefore inevitably raises the resourcing question. $1.5bn has been cited as the investment required to actualise this plan.

How will this colossal amount be generated? I have not seen much on this detail in the presentation. I have however gathered that part of this will be through floating of a 48% stake to private institutions. It would be helpful to have an insight on the valuation of the business and what this 48% is worth in terms of meeting the $1.5bn cost.

This is a cardinal question as we ascertain whether the project is likely to increase the nation’s debt stock which currently stands at just over $2.5bn. How much are we adding, if at all, to the country’s external debt over the four year window?

This must be explicit from the onset and the business model should justify it so we know how this money will be repaid. Will the taxpayer foot the entire bill or is it a viable business that can pay for itself? How is rail transport business faring in other countries to support our investment?

This is a three to four year plan with a $1.5bn price tag. When one contrasts this with Kenya’s Konza tech city for instance, questions may arise. The Kenyan project is worth $8.5bn in 4 phases over 20yrs.

Is our roadmap too ambitious or is all well laid out to be attained over the stated timeframe? The two may be different but the scale and mode of financing can be analysed together for perspective.

Is Professor Chirwa all alone?

The intention to put together a competent team has been alluded to. This is a critical piece that Professor Chirwa and ZRL need for them to embark on the ambitious project.

A board has been announced. Whether it inspires or not is a discussion for another time. The imperative things now are the strategic and operational teams that will oversee the daily happenings at ZRL.

It is important that Professor Chirwa is not a lone visionary, dreaming alone or finding himself surrounded by a team that believes more in the salary than the bigger picture.

Furthermore, ZRL requires the full participation of political stakeholders. Without this political will, it may be a futile undertaking. With the amounts involved, it will call for this drive across the board so that its commencement and completion is guaranteed.

Government’s alignment

The team is one arm of the project. There is another component that highlights the issue of capacity. An Institute is to be set up at the Copperbelt University (CBU). Additionally, 75-80% of materials are to be sourced locally.

This is a good thing. But it calls for the government to be fully on board. How will the curriculum be developed, by who and over what time frame? Are there any lecturers available initially or all need to be trained over a three to four year period? Is the government financing this initiative or it is part of the $1.5bn?

The sourcing of materials locally is a desirable undertaking. What remains to be known is what these materials are, whether the locals have the capacity to supply these or this is a medium to long term aspiration. Is there an existing knowledge pool? Are the skills available to deliver on this to required standard and quality?

Again, the framework must be designed with government participation to create an environment that stimulates such progressive activity.

All these elements call for immediate engagement and articulation as the bedrock to hold the plan together. That is the only way to ensure the venture is sustainable.

Some potential distractions

The scale of investment is enormous. One of the immediate dangers pre and post construction is that of vandalism.

The reality in Zambia is that many people remain wallowing in poverty and uncultured elements exist. Therefore, security will be a necessity where this infrastructure will be put up.

This is a gloomy picture we have witnessed after the construction of the Levy Mwanawasa stadium as a recent example. Facilities will need to be safeguarded so that the network does not swiftly deteriorate and culminate in a state of disrepair. Local communities can also be courted as active custodians in achieving this.

Secondly and as cited earlier, government plans ought to be cohesive enough to support the sustainability of the project.
Specifically, employment and incomes will be factors in the utilisation of these facilities.

There are plans for cafes, restaurants, malls and pubs at the rail stations. People will need to invest to run these on one hand. On the other, people will need money to spend at such places so we avert investments in a white elephant.

Furthermore, the private sector commitment is equally cardinal. This is predominantly on the cargo side of the business.

It is good to note that Professor Chirwa seems to have engaged one of the mining entities with intentions of ferrying up to 3 million tonnes of cargo annually. This includes ore, anodes, concentrates and other products for production.

The key thing here also will be planning for slumps in mining activity when prices tumble especially for copper. What will drive the railway traffic during these spells?

The proposed plan allays this concern with a vision to explore new cargo from non-traditional routes such as uranium ore, manganese ore, nickel, gold, rare metals and agro products.

It will be imperative for this to take root urgently and diversify the cargo and routes. This too requires across the board endorsement for its explicit spin off benefit when heavy traffic is transferred off the road network.

Finally, corruption has become such a cliche in Zambia. Most of us are fatigued hearing it propounded by anyone that finds an appropriate platform or audience.

Much as the case may be so, corruption remains an active cancer we need to fight. The ZRL revival may be exposed to this rot and Professor Chirwa with the entire team must guard against this.

Closely scrutinising the phases of the project, one notes potential pitfalls. There is the supply of over 300,000 electricity poles for instance. We know of the famous and recent hot story regarding the supply of poles involving two prominent cabinet ministers.
This is only one item cited. There will be more given what the entire project requires.

The challenge this throws to Professor Chirwa and the ZRL team is for them to strive for transparency. This must be end to end with clear guidelines and mechanisms to support professionalism while eliminating corruption loopholes. Procurement is a major area of exposure and measures must be in place to mitigate such risks.

The fact that ZRL intends to source 75-80% of materials locally entails that this indeed will be a critical area of focus. It provides an excellent opportunity to do the right thing and offer an exemplary case study on credible corporate governance.

Final analysis

All in all, the project is a welcome aspiration. Zambia needs such grand plans to invest in infrastructure development. What matters more at this stage is laying that first rail. Setting the plan in motion and taking the first step towards execution will make the difference.

One can only hope to see this ambitious vision come to pass.

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Posted by on February 10, 2013 in Economic, Opinion

 

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