Presented By: Dominic R. Ntwaagae

Chief Executive Officer

Botswana Railways

Powering the Economy into the Future

Rail Infrastructure Developments in

Botswana & Coal Transport via Rail as a

Strategic Transport Mode

Date: 17thApril 2013

1

Background Who is Botswana Railways (BR)?

BR’s Strategic Intent

Botswana Railways Achievements

Development of Rail Infrastructure Green and Brown Field Railway

Coal Trial Run to Mozambique

Key Challenges in the Development of Coal Infrastructure

Key Issues

Outlook

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Who is Botswana Railways (BR)??

BR is a Strategic Government Enterprise

Botswana Railways (BR) is given a mandate as a sole

operator of railways since establishment in 1987 (BR

Act 1986; Amended in 2004)

◦ BR’s mandate is to provide transportation of goods and passengers; efficiently, safely and cost-effectively; &

more importantly to meet customer’s expectation.

◦ Amendment of the Act provides for BR to form Joint Ventures, Subsidiary companies and to exploit other investments.

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Transports Passengers, bulk freight, parcels & containers

Bilateral Business Agreements for efficient interchange between BR & NRZ & BR-TFR are in place

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Botswana Railways Current Group Structure

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Botswana Railways (Botswana Railways Act)

BR Properties (Pty) Ltd (Companies Act)

100% BR

Gabcon Joint Venture 64% BR

JTTM Properties 64% BR; 3% BR

Properties

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Source:www.botswanatourism.us/experience_botswana/railway_network_map.html

Type of

Wagon

BOH (Coal Hoppers) BHS (Botswana High

Sided)

Current On

order

Current On

order

Number 35 34 200 334

Load 52.55t 52 t 45.0t 45t

BR’s Rolling Stock in Use for Hauling Coal

“Cecil-Centric”

“Customer-Centric”

Channel Operator

1. Deteriorating profit

2. Increasing cost structure with huge

fixed cost (60/40)

3. Maintenance Backlog

4. Major Exposure/Potential Business

Collapse

Supply Chain Integrator

1. Bulk Freight Railway/ Customer & Profit driven

organization

2. Unlocking Botswana Railways’ capacity e.g.

export of coal, soda ash, salt, etc.

3. Integrated logistics solutions

provider/Container Business, etc.

4. Commercial Exploitation of BR’s property

portfolio

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BR’s Strategic Intent

The BR Turnaround Strategy was adopted in 2006 and

achievements are as follows:

Installation of new trains operating signalling system (Safe Working System: completed in 2008).

Recapitalization: Botswana Govt injected P300 million for

procurement of wagons.

Procurement of 562 wagons ongoing: ◦ 290 salt wagons, 204 high sided wagons, 34 coal hoppers &

34 down sided wagons

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Integrated logistics services:

◦ Dry Ports Development:

Gabcon Joint Venture

Palcon to exploit container business in the Central region

Francon

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Safety:

◦ Implementation of NOSA 5 system: Achieved 3

stars (2013).

◦ Acquired a 3 year Rail Safety Regulator License to

cross into TFR lines (2012).

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Trial runs from Francistown via Zimbabwe to Maputo Coal Terminal-Mozambique (1300kms):

April 2012: moved 1 wagon (44 tonnes); reached

destination in 3 days to Maputo

November 2012: moved a 34 wagon train (1300

tonnes); reached destination in 3 days; the consist

was 17 wagons from BR & 17 wagons from

National Railways of Zimbabwe.

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Trial runs from Francistown via Zimbabwe to Maputo Coal Terminal-Mozambique (1300kms) Cont’d..:

The successful trial was conducted in

partnership with African Energy, Morupule Coal

Mine, Grindrod Mozambique Limitada & Vitol

Coal South Africa. Rail operations carried out

by BR, NRZ & CFM.

Movement of coal via Maputo was proven

feasible; has provided invaluable technical

expertise for the service in this route.

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Lack of synergy between coal miners and the rail

industry and off-takers.

Botswana is landlocked with no heavy-haul

infrastructure that allows direct export of coal to

port.

Due to involvement of other countries in the

development of rail infrastructure to ports there is

slow turnaround of Implementation.

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Rail infrastructure is highly capital intensive and

therefore requires huge funding.

Most regional railways are confronting major

infrastructure problems primarily associated with

aging track.

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Coal Mining Houses – Readiness

Commencement of Production

Rapid Loading Infrastructure

Railway Industry

Railway Infrastructure

Heavy Haul --- Light Rail

Standard Gauge --- Cape Gauge

Rolling Stock

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Port Capacity

Space Availability

Handling (Automation – manual)

Off-Takers

Market Availability

Off-Take Agreements

Competitiveness

Landed cost

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Export of Coal through existing rail

infrastructure to international markets via

Mozambique & South Africa

Integrated Transport Policy

Green Field Heavy-haul Railway

Developments.

Investment In Railway Assets – Recapitalization

Long Term Solution

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Thank you!