Enabling Private Sector Development along the

North-South CorridorWorld Bank Office, Lusaka

3 May 2011

Dr Paulo Fernandes, Econogistics (Pty) LtdAn MCLI Member

Overview

• The Maputo Corridor• The Maputo Corridor Logistics Initiative (MCLI)• Role of the MCLI• Successes of the Maputo Corridor• Government and the Private Sector• Key challenges and lesson from the Maputo

Corridor• Key success factors• Contacts

The Maputo Corridor

• A economic corridor linking the economic hub of South Africa to the Port of Maputo

• Launched as a tri-lateral initiative between South Africa, Mozambique and Swaziland in the 1990’s

• The initiative has seen massive investment in transport infrastructure over the last decade – road rail, ports

• There has also been significant economic investment

• Socio-economic impact has been independently evaluated and demonstrated to be significant

• The initiative therefore has been and continues to be considered one of the more successful corridor development programmes in the region

The Maputo Corridor Logistics Initiative (MCLI)

• The MCLI is a non profit corridor management institution established with the objective of revitalising the transport route, the investment in key infrastructure, and removal of bottlenecks and constraints to trade

• It is multi-lateral (SA, Mozambique, Swaziland) and multi-stakeholder membership organisation working with a PPP model

• It operates within the framework of NEPAD, SADC and AU transport corridor development policy and has its emphasis on the promotion of cross border trade and investment and regional integration

• The initiative began after a hiatus of some years in the formal corridor development process following the failure of the institutional mechanism set up at the time by the Mpumalanga Provincial Government

• Achievements– High visibility, particularly in freight and logistics sector– Successful interface between Government and the private sector to the highest level – Acknowledged on African continent as model corridor institutional framework– Wide stakeholder reach and communication on the corridor– Increased usage of the corridor– NEPAD Infrastructure Award

The role of the MCLI

INTEGRATE – COORDINATE – COMMUNICATE - FACILITATE

•Act as a platform for engagement/interface between the public and private sector stakeholders to resolve constraints•Promote the Maputo Corridor and market the strategic benefits and opportunities of the Corridor•Coordinate and disseminate information and research on the Maputo Corridor•Participation in key National and Regional bodies and forums

Successes of the Maputo Corridor• N4 – Road Concession

– Ongoing rehabilitation of infrastructure– Nelspruit Bypass – R1BN– Freight volume has increased by 11% p.a. at the Nkomazi Toll Plaza and 28%p.a. at

the Moamba Toll Plaza• Upgrade of the rail corridor to Maputo

– Maputo Corridor – 5th SA Rail Corridor– Private sector investment in rolling stock

• Port of Maputo– Private concession on the Port of Maputo (>2043)– Massive upgrades in port infrastructure

• Investment $750M – early 5 years• e.g. Container Terminal – 100K TEU to 180K TEU, Coal Terminal - expand from 2M to 6M

ton, Car Terminal, Passenger cruise terminal• Channel dredging programme completed Jan 2011 to increase current draft from 9.4m to

11m, with the tide, which will accommodate Panamax size vessels– Increased throughput from current 8.7 Million tons to 48 million tons – Port Masterplan envisages a further capital investment in the port of USD

$750million in the next 20 years

Successes of the Maputo Corridor

• The Lebombo/Ressano Garcia Border Post– Upgrading of Lebombo border post (S.A.) in 2010 - separation

of freight traffic, busses, passengers and pedestrians– Design allows later incorporation into the OSBP– Rail facility development is on the cards– Km 4 upgrade and km 7 upgrade on he cards– 24 hour operation during Festive season and lobbying for year-

round opening of the border on a 24 hour basis– Border process improvements - SA Customs modernisation,

MOZ – Single window system• MCLI has successfully maintained a multi-sector

participation at all levels, including its Executive and sponsorship structures

174 Members and Cooperation Partners from Mozambique, Swaziland and

South Africa

Government and the Private Sector

• The PPP model adopted by the MCLI has enabled– Shared responsibility and mutual accountability– Access to key sector relationships and institutional knowledge– Access to important strategic partnerships– Maximisation of synergies between public and private sector

skills, knowledge and expertise– Alleviation of capacity constraints and bottlenecks through a

shared approach and shared mobilisation of resources and expertise

– Maximising the use of public and private investment for the benefit of all corridor users

Key challenges and lessons learnt from the Maputo Corridor

• Vision– Clear, consistent and long-term vision– Addressing the needs of multiple stakeholders – “what is in it for me?”– On-going communication and sharing of the vision

• Mandate– Support the Vision - clear, consistent and long-term (across several political administrations)– Needs to be strong enough to allow and ensure effective participation across multiple Government

departments in various countries, and in regional structures– Needs to be neutral enough to ensure objectivity between the needs of various stakeholders

(“minefield”)– Should not be seen as threatening - making any one stakeholder look bad and non-performing– Some level of diplomatic status

• Structure– Should reflect the Vision – non-profit allows clarity of Vision– Should ensure transparency, good governance and representative participation - important that one

country is not perceived as the “leader/benefactor” to the detriments of the others– Should facilitate the necessary funding arrangements

Key challenges and lessons learnt from the Maputo Corridor

• Sustainability– Should reflect the Vision – long-term– Should allow neutrality of mandate and not be hijacked by key funders

or the need to “sell” services to survive– Should not detract capacity from delivering on objectives – ensuring

financial sustainability at times becomes a full time job at the expense on corridor development activities

• Capacity– Executive participation by private sector and Government

representatives is key – continuity of participation is a challenge• Government – frequent changes of staff• Private sector – sometimes participate only until certain issues are addressed

– Must support the Mandate and be supported by funding – should ensure top level technical capacity is put in place, sustained and retained

Key success factors

• Passionate leadership• An active secretariat and committed board of directors from both

public and private sector out of both countries• An institutional framework with the right mix of partners• Relationships built through MCLI’s interface between public and

private sector through weight of membership mandate• Strong stakeholder support base• Bilateral agreements at national level• On-going political will in the region• …….

Contacts

Brenda Horne-FerreiraCEO: Maputo Corridor Logistics Initiative

Tel: +27 (0)13 755 6025 Mobile (SA): +27 (0)82 802 2338 Fax: +27 (0)13 752 5453 Mobile (MOZ): +258 84 397 4180

brenda.horne@mcli.co.zawww.mcli.co.za

Dr Paulo Fernandes CEO: Econogistics (Pty) Ltd (a subsidiary of PDNA Holdings (Pty) Ltd)

Tel: +27(0) 11 566 8309 Fax: +27 (0) 86 600 7699Mobile: +27 (0) 82 655 5170

paulo@econogistics.co.zawww. econogistics.co.za