Programme director, Ms Brenda Horne, MCLI CEO
Minister of Transport and Communications, Mozambique; Honourable Mr P Zucula
Representatives of the diplomatic community
Members of the executive council of provinces
MCLI South Africa Chair, Dr Matthews Phosa
Distinguished guests
Ladies and gentlemen
We would like to express our sincere appreciation for having been invited to address this important gathering today, the fifth Annual General Meeting of the Maputo Corridor Logistics Initiative (MLCI). We are, indeed, privileged and honoured.
Ladies and gentlemen, the political challenges that faced a colonised Africa brought us together, as brothers and sisters, in struggle. After liberation, we continue to seek each other out and, together, attempt to fashion a peaceful and proud gathering of nations of Africa. As we seek the respect of the world as politically independent entities, we must realise that an even bigger challenge stands in front of us; in order to become truly politically free, we must be economically liberated.
Today’s gathering comes against the background of a world in recession. This is a reality faced by the old super powers of the west and east, but it is also a challenge facing developing countries such as those in the Southern African Development Community (SADC) and the rest of Africa.
We, therefore, suggest that globalisation has placed in front of us similar challenges, irrespective of whether we are poor or rich nations. The global recession reminds us, therefore, just how the global economy links countries across the oceans, irrespective of their development index. Ladies and gentlemen, it is clear that the economic challenges that face a liberated Africa, today, must bring us together, as brothers and sisters, in the struggle for an economically liberated Africa.
This stage of our struggle requires the discipline a guerrilla, sometimes the stealth of a counter-intelligence officer. This stage of struggle calls for supreme self sacrifice that places humanity, and not the individual, as the object of liberation.
This struggle calls on individuals to subsume their individual needs to those of the nation; yet, this struggle calls on nations to subsume narrow national interests to those of the region; it calls on regions to recognise their place as part of the continent and, further, as part of the global world. This is a time of united action for a better world for all.
Freight logistics
In Africa, scarcity of skills, the inadequacy of technology and a lack of infrastructure development are stunting our economic growth and our capacity to take advantage of opportunities in the rest of the world. Economic development cannot be achieved without improved and increased infrastructure in our countries and within our borders.
The development of Freight Logistics and economic corridors has the potential to add value to trade and development and facilitates the movement of goods and people throughout the region. Freight logistics supports economic growth by channelling goods and services into key areas of the economy such as telecommunications, transportation, rail and road, manufacturing, automotive, energy and power sectors. It is clear that we must prioritise freight logistics and corridor development as a pillar for economic development.
In this regard, the MCLI marks a key thrust of our attempts, not only to grow our respective national economies but also, to contribute to the overall growth of the region. Under the MCLI, we have a corridor linking the east coast port of Maputo with Gauteng, Limpopo, Mpumalanga and other land-locked countries, within the SADC region and the continent. The key elements of this corridor are the N4 toll road, the rail corridor, the Lebombo/Ressano-Gracia border post and the Maputo port and terminal facilities.
By way of illustration, the port of Maputo is only 590km by road from Gauteng and 581km by rail. This presents the shortest route to a port for South African exporters from Gauteng, Mpumalanga, Limpopo and surrounding areas. Cargo through the Lebombo border post has grown significantly from almost zero in 2002 to above 3.5 million tons per annum over the years. Transnet freight rail (TFR) moves 3.5 million tons of cargo per annum, mostly being coal and magnetite exports.
The rail sector in the corridor has capacity to handle seven million tons depending on the economic up-turn; however, the long-term aim is to increase its capacity to 15 million tons. TFR works closely with CFM, the Mozambican rail operator, on operations and marketing, and Grindrod, the South African head-quartered operator of the Maputo port terminal. TFR rolling stock runs through to the port of Maputo, with the change of drivers at Komatipoort. These trains return largely empty, due to insufficient cargo imports from Mozambique to South Africa.
Major commodities transported on the Maputo corridor by road include fuel, sugar, timber, vehicles, paper and cement. Commodities transported by rail include coal, phosphate, ferrochrome, fuel and ore. Some of these commodities have moved from rail to road, because of certain efficiency challenges on rail. We are glad that progressively TFR and CFM are addressing these challenges.
Public private sector partnership
The MCLI was established in October 2003 by a group of infrastructure investors, service providers and users of the Maputo Development Corridor, to integrate, coordinate, communicate and facilitate development and movement of freight along the corridor. We are pleased to confirm that the Department of Transport in South Africa will continue its representation at the MCLI board of directors.
Both government and the private sector have made significant strides in making the Maputo Development Corridor a corridor of choice, and in the streamlining of freight logistics in South Africa, the region and the continent towards international competitiveness. Through its relationship with government, information sharing and understanding the government agenda on SADC and continental issues, the private sector, in this case MCLI jointly with government, have managed to place the Maputo corridor high on the local, national and international agenda.
We have no doubt that the continued engagement by the South African, Mozambican and Swazi governments, with the private sector; will ensure that the remaining constraints are resolved. This engagement will also ensure that the corridor can become the first choice for both regional importers and exporters.
There is also a close relationship between MCLI and the Mpumalanga Flagship programme, which concentrates on transport issues on the Moloto and Maputo corridors. Our government recognises the need for growth within the freight industry and its importance to sustainable economic growth. It is against this backdrop that the South African Cabinet, in 2005, approved the implementation of the national freight logistics strategy. The objectives of this strategy include:
* lowering the cost of doing business in South Africa
* a new public-private sector balance
* integrated planning amongst all relevant stakeholders within the Country, region and the continent and
* seamless movement of cargo between first and second economies.
The strategy, further, identifies the role of the public sector within the transport sector, which are:
* to regulate the freight system to ensure economic efficiency
* to promote better physical and operational integration of seaports, airports and land transport networks and
* to contribute to the trade facilitation process at all borders and interfaces, and thus to help ports and land transport entities (whether public or private) to act as creative partners in international trade development.
For its part, the private sector must play the following role:
* to invest in infrastructure from both a debt and an equity perspective
* to provide superstructure and/or operations investments and
* to promote operational integration and efficiency, in order to foster economic growth and development.
National initiatives supporting regional strategy
On our side, to date, the Department of Transport has established good platforms for engagement with the private sector and transport entities. Jointly with the Departments of Public Enterprises and Trade and Industry, the Department of Transport has agreed with the shipper’s council to work on a programme of action, on how to take forward the policy statement of shifting cargo from road to rail. The draft programme of action will be tabled in the next few weeks for a broader consultative process. It is encouraging that the Chief Executive Officer (CEO) of MCLI is also part of the core group from the shipper’s council who will launch this platform.
Ongoing bilateral engagement on the implementation of the freight logistics strategy has started and we will continue our consultation with Business Unity South Africa (BUSA). We will also ensure that the leadership of the Mpumalanga provincial government plays a bigger role in directing and re-directing ownership and joint corridor vision with regards to the Maputo Development Corridor.
The department has committed to a joint quarterly bilateral meeting with Transnet, to raise every issue that needs immediate intervention with regards to freight logistics infrastructure and operations in South Africa and across the borders. We have established freight and logistics forums, in all our nine provinces, to allow joint government and private participation in the streamlining and implementation of freight logistics interventions. Key to this process is the identification and implementation of projects such as the N4 truck stop.
We aim to have all these fragmented government and private sector platforms integrated and streamlined to form one seamless freight logistics in the country and also lower the cost of doing business.
Branch line strategy
At the same time, our branch line strategy seeks to mitigate the adverse impact on our secondary road network, as the network of roads has a lifespan of between one and five years for it to face a total collapse. The main aim of the strategy is to breach the economic gap between secondary and primary transport networks. It is also to enhance local economic development and job creation in the rural areas where these lines are located. Currently, there is a joint consultative process between Transnet, Department of Public Enterprises, National Treasury and the Department of Transport in the development of the Strategy, which will culminate in the provincial consultative process.
Cross boarder optimisation plans
The department is currently developing the cross border optimisation plans, with a view to establish a comprehensive steering committee that would include our neighbouring countries. There are over 400 trucks crossing the Lebombo border post, on a daily basis, with an approximately two to three hours of truck traffic delay, hence, a cross border plan is being undertaken to deal with these challenges.
Road freight strategy
The process of drafting the national road freight strategy has begun. Its intention is to begin a better management of the road freight industry and deal with, amongst other things, the possible review of the axle mass limits, overload control and the weighbridge network. In essence, the strategy will shift commodities not meant for road, such as bulk commodities, to be on rail. Optimum split of cargo between road and rail will apply in this regard.
With road and rail freight modes being the dominant in the freight environment of South Africa, both constitute 99 percent of the total logistics cost contribution, with the remaining one percent shared amongst pipeline, coastal shipping and air. As of 2008; 1.533 million tons is carried by both road and rail, of which 1.337 million tons are on road and the remaining 196 million tons on rail.
Conclusion
Distinguished guests, the importance of freight logistics and corridor development within our economies cannot be over-emphasised. Today’s event is a clear manifestation of our commitment to map a clear way forward for our economies. We recognise the important role that transport must play as the engine of our regional economic growth.
It is, again, a stage in our struggle that calls on us to work together for the benefit of our region and our people. Like the struggle for political liberation, which we won, we have no doubt that we will win this war decisively and convincingly.
Together we can do more!
I thank you!
Issued by: Department of Transport
6 August 2009
Source: Department of Transport (http://www.transport.gov.za/)
