Expressions of interest for the contract to build the new railway through Swaziland will be sought before the end of this year. The line will take about 16 Mtpa of general freight off the existing coal line from Ermelo to Richards Bay Coal Terminal (RBCT) in the short term, opening up capacity on that railway.
It will therefore benefit coal exports from mines in both the established centre of the South African coal industry, Mpumalanga Province, and also the Waterberg Basin in the north of the country. It could also be used to transport South African coal to Matola Coal Terminal, next to the Mozambican port of Maputo, plus Botswanan coal to RBCT.
The line is being developed as a joint venture between Swaziland Railway and South Africa’s Transnet Freight Rail, but it remains to be seen who will operate the project.
Stephenson Ngubane, CEO of Swaziland Railway, commented: “The model we are working on now is the SPV [special purpose vehicle]. What does that mean? It means that we are looking to attract project financing, and that the revenue generated will be used to pay back investors and meet operating costs. After maybe 20 or 25 years, or when the loans have been repaid, the SPV would dissolve.”
The line would start from Lothair in Mpumalanga Province, passing through Swaziland before heading back into South Africa. Construction costs for the 150 km Swazi Rail Link are estimated at R20B (US$1.6B). The feasibility study has already been completed and environmental permits secured. Talks are underway with homeowners whose properties will have to be vacated, and land acquisition has begun. Permission has also been granted to exhume and relocate 120 graves.