Railways look to private sector for funding

While governments in southern Africa may not have embraced privatisation, they are increasingly looking to private sector participation to help fund upgrades to equipment and infrastructure. According to Charles Batize, minister of works and transport for Tanzania, the Tazara Railway, which is 100% owned and operated by the government, is changing its policies to allow private operators to sell cargo-carrying options to their customers, using Tazara’s services. “We found that the operations ran at a huge loss during the privatisation period so we reverted to making our railways 100% government-owned,” he said. Transnet Freight Rail (TFR), meanwhile, has designed a private sector participation (PSP) model which can be used as an alternative procurement option for mega projects, according to TFR funding consultant, Patrice Vusi. Marketing director of Realty Africa in Zimbabwe, Carlo Chima, told FTW that a Dutch-owned company was introducing crowd funding options for major projects in Africa. “Funding options are opened up to multiple third parties via the social media, almost the same way a stokvel would operate, which considerably lowers the risk of investment and banks are more liable to support this kind of investment platform,” he said. He quoted the World Bank as saying recently that southern Arica had a crowd funding potential of up to US$2.58 million.