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Mozambique: Railways and Ports Restructuring Project

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Photo 1: by World Bank showing a rehabilitated Rail (Dondo, Sofala province -2009)
Revitalize the Railways and Port System
Promote Concessions and Improve Efficiencies in Mozambique

Overview

Drawing upon International Development Association (IDA) funding and expertise since 1999, the Mozambique railways and port system staff productivity increased five and seven fold respectively in 2009. The rail traffic in 2008 was 4.3 million tons compared to 3.4 million tons in 1999 and the port traffic exceeded the target of 10 million tons in 2009 for the first time in decades (from 8.2 million tons in 2002). The public company that runs the ports and railways system registered an operating surplus of more than US$80 million by 2009, which enables the company to invest continuously in the expansion of its infrastructure and services.

Challenge

Despite a strong economic growth since the mid 1990's, Mozambique remains one of the poorest countries in the world with a gross domestic product (GDP) per capita of US$440 (2009). Transport infrastructure in Mozambique’s vast territory remains one of the most critical challenges facing the country’s development. Furthermore, the potential represented by the country’s geographical location as natural transit corridor and an access point to the sea for a number of landlocked countries remains largely untapped. In addition, the 16 years of armed conflict that ended in 1992 completely destroyed the rail system and paralyzed most of the ports throughout the country. The IDA-financed Railways and Ports Restructuring Project has been instrumental in bringing in private concessions to run the ports, fund the rehabilitation of infrastructure, and improve efficiencies and capacities within the public company that runs the system and at the ministerial level.


Approach

IDA support to the transport sector has been diversified and consistent over the years. The IDA-financed Railways and Ports Restructuring Project (2000-2009) supported the government of Mozambique’s priorities in the sector by: (a) increasing the operating efficiency through private concessions of Mozambique’s major port-rail systems thus enabling the country to increase its share of international freight traffic from neighboring countries; and (b) strengthening the transport sector policy, the regulatory framework, and the institutional capacity through training and the provision of capacity building for the staff of the Ministry of Transport and Communications.


Results

The IDA-financed project, has helped to support improvements in several key outcomes:

  • Staff productivity in the railways and ports increased five and seven fold respectively by 2009 compared to 1999. For instance, there was an increase in the index tons/ship/day reaching 3,658 in 2009 as compared to 2,280 in 1999; the wagon turnaround time reduced from 7.3 days in 1999 to 5.4 days in 2009; and the derailments also reduced substantially from 326 in 1999 to 167 in 2009.
  • The port traffic in 2009 was 11.3 million tons compared to 8.2 million tons in 2002, exceeding the target of 10 million tons set at the project start.
  • The rail traffic in 2009 was 4.3 million tons compared to 3.4 million tons in 1999 at project start.
  • The restructuring of the public company that runs the ports and railways system resulted in an operating surplus of more than US$80 million by 2009, compared to being unprofitable in 2004, which enables the company to invest continuously in the expansion of its infrastructure and services.
  • The Ministry of Transport and Communication acquired the ability to evaluate bids for concessions, lead concession negotiations, and plan large-scale infrastructure projects through technical assistance and capacity building provided by IDA.
  • The rehabilitation of jetties used for ferry services and a total of six ferries and boats were acquired and put into use. These transport services are faster, safer and more comfortable for passengers compared to the old slippery jetties and the small boats, which could only transport 10 to 12 passengers, often without any cover or roof. These upgrades resulted in more people using the fluvial transport system. Thus, in Maputo for instance, 3.40 million people used the new system as compared to 1.9 million in 2000; in Inhambane 0.7 million used it in 2009 compared to 0.57 million in 2000; and in Quelimane 0.63 million used the new transport in 2009 compared to 0.36 million in 2000.

Bank Contribution

IDA’s advisory and technical support helped improve capacities and efficiencies in the ports and rail system, increase staff productivity, and support profitability at the public company. IDA invested a total of US$106 million (actual disbursement at project completion) in the project, which was implemented from 1999 to 2009.


Partners

In addition to the IDA contribution of US$106 million, the project also benefited from additional funding from the government of Mozambique in a total of US$16 million, and another US$8.7 million from the public company that runs the ports and railway system, putting the total project cost at US$130.7 million.


Moving Forward

The current arrangements are expected to ensure the sustainability of port and railway performance and the maintenance of the infrastructure in reasonable condition, especially the Nacala, Beira, and Maputo ports and Nacala and Beira railway systems, which are under long-term concessions. In addition, given the strategic importance of the Nacala Corridor for landlocked neighbors, such as Malawi and Zambia, the African Development Bank (AfDB), Japan International Cooperation Agency (JICA) and IDA are collaborating to review the corridor (Roads and Rail) to assess any further support needed to upgrade the transport infrastructure in that corridor. IDA is also currently funding the Beira Railway Project, which focuses on the rehabilitation of the rail system in the center of Mozambique. In addition, IDA’s long-term funding in the road sector is helping improve the entire transport sector.


Beneficiaries

The rehabilitation of jetties and acquisition of passenger ferries are highly rated in terms of satisfaction by the users – providing faster, safer and more comfortable service for passengers compared to the old slippery jetties and the small boats, which could only transport 10 to 12 passengers, often without any cover or roof. The new boats (2 catamarans) have the capacity to accommodate 100 passengers and 2 tons of cargo; the two smaller ferries can carry, respectively, 58 passengers plus 10 tons and 90 passengers plus 2 pick-ups and 10 motorcycles. The larger ferry, operating at Maputo carries 293 passengers plus 4 trucks and 10 cars. Due to the improved ferry services, more local people are crossing the river, either for school, work or for market opportunities, which results in more exchange of economic activities between the two sides of the waterways.

 


For more information, please visit the Projects website.

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