Tapping into passenger rail by Swaziland Railway (SR) as part of its drive to enhance economic growth and exhaust all available business opportunities has been perceived as a move towards the right direction.

This transpired during the company’s presentation under the theme ‘Key Opportunities for Swaziland’ at the Swaziland Economic Conference 2017 hosted by the Swaziland Economic Policy Analysis and Research Centre (SEPARC), Central Bank of Swaziland (CBS) and the University of Swaziland (UNISWA) – whose main objective was to unpack some of the economic opportunities and policies that could be explored by the country.

Participants and stakeholders from the locomotives, logistics and transport sector pointed out that Swaziland Railway has to look further into other opportunities that would make it a pinnacle in driving economic growth. The speakers were of the view that the rail sector could be actively involved in the tourism industry through venturing into passenger rail, also as part of its product service diversity plans.

“Many countries have passenger trains, something which has worked quite well to boost their tourism sector. It’s an opportunity that Swaziland should consider. Many African people are quite adventurous and having this in place could work towards Swaziland’s advantage,” one speaker suggested.

Swaziland Railway Chief Executive Officer Stephenson Ngubane also noted that it would be prudent for the organisation to explore all existing opportunities, including having smaller passenger trains. He explained that with the proposed E12 billion investment project into the 100-kilometre Lothair/Sidvokodvo rail line, having the passenger train could be a reality.

“It should be noted though that passenger trains are not profitable by nature, especially for small economies like Swaziland. However, in future, as the rail transport continues to develop, this is something we can look into,” he said.

Apart from the passenger train, the company is further exploring other opportunities that will speak to its mandate and policy.
Sam Mzileni, who is the Director of Operations and Marketing, said as part of their five-year turnaround strategy, Swaziland Railway had plans to expand its dry port in Matsapha to maximise its capacity as well.

He said their main aim was to ensure that the company played a major role in the economic development of Swaziland through introducing services and products that would be beneficial and inclusive to all business people.

“We need to be seen moving with the economy. Research has shown that Africa is deprived due to its minimal investment in infrastructure. In fact, the World Bank noted that less than two percent of Africa’s investment is channelled towards infrastructure development and we need to change this. This is part of the reason Swaziland Railway has made great strides in unlocking some of the key opportunities that exist within its area while having its sights on further growth opportunities,” he said.

Mzileni mentioned that as part of maximising on their service delivery, they have come up with certain products tailor made to benefit their clients. Top of these is the carnage service, which basically allows the company to deliver imported items at their clients’ door step. He said to further enhance this, they were negotiating with various shipping lines internationally to partner with them and give a wider choice to their customers of service delivery companies to choose from.

SD Railway only utilising 67% of its capacity

Having the right policies in place will allow Swaziland Railway to optimally make use of all its locomotives, tankers and other equipment for the betterment of the Swazi business community.

The company has noted that currently, it is only utilising 67 percent of its capacity while the outstanding percentage remains untapped.
The Director of Operations and Marketing, Sam Mzileni explained that the parastatal was able to handle eight million tonnes per annum though they have increased their target to nine million for the current financial year. He noted that ideally, the enterprise has a capacity to handle about 12 million tonnes of commodities per annum.

“Reaching our target and exceeding it would translate to economic growth and maximum usage of our equipment. Swaziland Railway made a lot of investment recently in its locomotives and tankers to ensure that it delivers efficiently to its clients,” he said in brief.
Also making reference to this aspect was the company’s Chief Executive Officer Stephenson Ngubane, who said they were ready to transport anything to anywhere in the world.

He explained that in the mining sector specifically, they were working with Maloma Colliery though on a small scale and were hopeful that having the right policies and legislations in place, the mining sector would be fully revitalised and ultimately have positive spin offs to the larger Swazi economy.

In the coming years, Ngubane mentioned that they were optimistic that they would be handling over 20 million tonnes per annum, especially with all the growth prospects and development taking place in the railway industry in the African continent, making key reference to the Lothair/Sidvokodvo line that will be commissioned in 2019 at an investment exceeding E12 billion.

Currently, Swaziland Railway is allowing the large conglomerates, multinational corporations and other businesses to optimise on their value in terms of investment and cutting down on operational costs related to transport through the provision of rail services in an efficient manner.

Companies such as Total, Engen, Premier Foods, DD Williamson, Afrisam, Galp Energia, Swaziland Beverages, Swaziland Electricity Company (SEC) and Rhodes Food Group, among others, have managed to lower their transport costs and survive harsh economic challenges because of ‘knowing where to trim the fat’ in terms of their operational costs.

Ngubane noted that transport costs in Southern Africa equated to between 35-39 percent on input yet in other countries such as Brazil and North America, these were at a low 15 percent.

“In essence, this means that our industries will find it difficult to compete with products from these countries due to their affordable transportation costs. We want to drive Swazi businesses to be fully efficient and eliminate transport costs as a bearer to profitability,” he added.

Also as part of ensuring efficiencies to their customers, they have come up with a one stop shop at their dry port in Matsapha. Here, customers are able to do their clearance through the Swaziland Revenue Authority (SRA) as well as connect easily with shipping agents.
“We have eliminated all the inefficiencies. We can do everything for you at once with ease,” Ngubane added. Swaziland Railway is able to deliver in any part of Africa in a seamless fashion.

Through the Mananga railway line, the company delivers via Komati Port which then extends to other regional countries which include Zambia, Zimbabwe and the Democratic Republic of Congo (DRC). The company can also export or import directly through Maputo in Mozambique.

QUESTION AND ANSWER SESSION:

Q: “With such projects as the Lothair/Sidvokodvo railway line which will be implemented in partnership with South Africa, we have seen many Swazi business people being side-lined. Can Swazi Railway assure us that we will also benefit from the E12 billion investment project?”

A: “We will be working together with our South African counterpart (Transnet) on this. We recognise and appreciate the laws and regulations governing each country when it comes to procurement and other related issues. As such, even our counterparts cannot just run in and do as they please. As Swaziland Railway, we will ensure that Swazis get a fair share of the business opportunities that will be availed. However, the challenge is that as a country, we are lacking in some aspects of expertise such as geo-technology for soil testing and other high level expertise. This will then result in us having to rope in our SA counterparts to assist.”
– Stephenson Ngubane

Q: “Which is the better port to use when importing or exporting goods? Is it Maputo or Durban?

A: The response to this depends on what the client wants to transport. For instance, Maputo port is closest at 230 kilometres from Matsapha yet it is 558km to Durban. If you want to get things quickly, you would probably use Maputo. However, you need to be cognisant of the customs duties that are involved because Mozambique is not part of the Southern African Customs Union (SACU). Also, the Mozambican economy is closely linked with the US dollar, which may affect you as an importer if it fluctuates.”
– Stephenson Ngubane