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Zambia Railways concessioned

01 Apr 2003

ZAMBIAN Finance Minister Emmanuel Kasonde and the Chief Executive of New Limpopo Bridge Projects Investments Eitan Dvir signed a concession agreement in Lusaka on February 14, under which a South African-led consortium will upgrade and operate the Zambia Railways network over the next 20 years.

The consortium of NLBI, Spoornet and Canarail was selected as preferred bidder by the Zambia Privatisation Agency almost a year ago (RG 3.02 p164). Representing South African business interests, NLBI will hold an 80% stake in the operating company. The rest will be held by Spoornet's parent, the South African transport holding company Transnet. Dvir said the consortium aimed to make ZR the main freight hub for southern Africa. 'This is a highly strategic line serving one of the richest mining regions in Africa. We believe in our ability to convert this railway network into a vibrant system', he said.

The deal covers both freight and passenger operations, which were originally offered as separate concessions. The consortium is expected to invest US$20m within two years, followed by a further US$60m over the concession period. Top priorities are the upgrading of 510 km of track, plus rolling stock and the communications network. Kasonde said the government would get annual payments of US$253m plus 5% of turnover.