Zim needs billions to bring infrastructure to acceptable levels
http://www.engineeringnews.co.za
By: Natasha Odendaal
8th February 2013
It would take several years and at least $15-billion to bring Zimbabwe’s
basic infrastructure back to an acceptable level, said Frost & Sullivan
environmental and building technologies research analyst Derrick Chikanga.
Speaking to Engineering News Online, he said the infrastructure in the
country had endured a decade of neglect and was in urgent need of
refurbishment, but funding for infrastructure development projects remained
elusive as the country attempted to revive its economy.
The economic difficulties between 1999 and 2009 had a severe impact on the
overall quality of the country’s infrastructure, with the transport and
energy sectors worst hit.
A recent report by the African Development Bank (AfDB) noted that coverage
and quality of infrastructure had fallen from being the best in the Southern
African region in the early 1990s, to in line with that of its peer
countries by 2009.
The AfDB estimated that focusing on infrastructure development could see the
country gain 7% growth, with a jump in gross domestic product from
$4.7-billion to $9.5-billion in the next eight years.
Further, by 2020, Zimbabwe could ensure that over 80% of the roads were in a
good condition, 100% urban and 80% rural areas had sufficient water supply
and sanitation coverage and about 15-million tons of road freight shifted
onto rail.
The 391 000 km2 country, with a population of 13-million, had seen signs of
improvement in recent years as the government attempted to set aside 13% of
its total yearly budget for infrastructure development projects.
However, the country faced a shortfall in its attempt to inject $430-million
into infrastructure projects last year, further emphasising the fact that
the country would not be able to develop sufficient infrastructure without
external support, said Chikanga.
The government needed to partner with external funders to obtain strong
financial assistance for projects, after which the country should be able to
position itself to maintain and further improve on the assets once in place.
The formation of public–private partnerships would be critical in ensuring
reasonable infrastructure development in the country, he commented.
Zimbabwe established the Zim-Fund in 2010 to lobby for development finance
from major European and Asian countries and secured commitments of about
$100-million from seven countries.
Further, several development banks, including the AfDB and the Development
Bank of Southern Africa (DBSA), had directed funds to Zimbabwe.
ROAD AND RAIL
Meanwhile, Zimbabwe’s 88 133 km road network was in a dire state as over
ten-million tons of rail freight had shifted to roads over the past decade.
In the mid-1990s, the AfDB said, rail carried about 14-million tons of
freight, but this fell to 2.7-million tons – 15% of the design capacity – in
2009, owing to limited available locomotive and rolling stock capacity, as
well as deterioration in the quality of the rail network.
Chikanga commented that, currently, only about 50% to 60% of the rail
network was currently functional and only 40% to 50% of the locomotives were
operational.
The 3 109 km rail network, which was supposed to be the backbone of the
country’s economy, was expected to take about $4.5-billion to revamp over
the next ten years – excluding locomotives and wagons.
Earlier reports indicated that $200-million was required for road
maintenance in 2012, but only $35-million was allocated, while only
$209-million was set aside for a $2-billion road rehabilitation programme.
That development banks, such as the DBSA or AfDB, were increasingly looking
to Zimbabwe for infrastructure development projects, was a positive sign,
Chikanga commented.
Last year, the DBSA had granted a R1.4-billion loan to Infralink, a 70:30
joint venture between the Zimbabwe National Road Administration and South
Africa-based construction firm Group Five, for the rehabilitation and
implementation of tolling on a 801 km national road network linking Harare
and Bulawayo, as well as Mutare, near the Mozambique border, and Plumtree,
on the Botswana border.
Last week, the Department of Roads in Zimbabwe commissioned Royal
HaskoningDHV to undertake a feasibility study determining the viability of
construction and tolling to improve the road between Harare and the
Beitbridge border post.
The cost of rehabilitating and improving the 580-km-long single carriageway
was estimated to be in excess of $600-million.
ENERGY
Meanwhile, the development of Zimbabwe’s energy sector had been hampered as
uncertainty surrounding the country’s 51% in-local-hands indigenisation
legislation restricted investment.
Chikanga said there was no clear indication of how the legislation would be
enforced and how it would apply to energy producers.
Many of the current licensed independent power producers, which were
expected to play a key role in increasing the country’s energy generation
capacity, had halted many projects until this became clear.
The indigenisation law, while finding its feet – with difficulty – in the
mining sector, created uncertainty in the energy sector, he said.
The past few months have seen TSX- and Aim-listed Caledonia Mining’s
Zimbabwe-based Blanket gold mine, as well as Anglo American Platinum’s Unki
mine and Impala Platinum’s Zimbabwe subsidiary Zimplats, concluding
indigenisation deals with the Zimbabwe Ministry of Youth Development,
Indigenisation and Empowerment.
Mining Weekly earlier reported that the Zimbabwe Investment Authority
recorded a fall in approved new investments in all industries, falling to
$930-million in 2012, from $6.6-billion in 2011, on the back of uncertainty
arising from the indigenisation programme.
Zimbabwe had approved 172 projects in 2012, a decrease from the 227 projects
approved in 2011.