African Railway Development and Intermodal Solutions: Dr. Lubinda Sakanga Calls for Competitive, Customer-Centric Railways
During the panel discussion, African Railway Development and Intermodal Solutions – Outlook for African Railways with Modal Shift from Roads to Rail at the AfDB Transport Forum 2024, Dr. Lubinda Sakanga, Director of Technical & Operations at the Southern African Railways Association (SARA), addressed critical issues hindering the competitiveness of Africa’s railway sector. His contribution to the discussion focused on enhancing railway policies, building a customer-centric approach and transitioning to new operational models that can attract private sector investment.
Understanding the Shift: What Railways Need to Compete
Dr. Sakanga opened by acknowledging that the majority of freight is currently moved by road, prompting the railway sector to self-assess: “What are we doing wrong or what are we doing differently?” He emphasised that for railways to become more competitive, they must identify what makes road transport attractive and plan to match or surpass that appeal. Dr. Sakanga urged member states to adopt comprehensive railway policies that are not solely government-owned but involve both the public and private sectors.
He envisioned railway policies as long-term investment blueprints: “The railway policy should not be a document which only sits in government… It should be one which, if it’s at a price of $10 or $20, the private sector should be able to buy it,” thus giving the private sector confidence in the future investment opportunities within the railway sector.
Customer-Centric Approach and Private Sector Involvement
Focusing on the need for a customer-centric railway system, Dr. Sakanga underscored the importance of understanding the specific needs of customers on various corridors. This includes the types of wagons required, security standards, and specialised containers for goods like perishables. “If we need containerised refrigerated wagons to move perishables,” he stated, emphasising that the government alone should not bear the responsibility. Instead, governments should incentivise private sector investment by offering initiatives such as “wagon bonds.” This approach could be applied across various sectors, including fuel, copper and agricultural commodities.
Dr. Sakanga highlighted that leaving railway planning and investment entirely in the government’s hands, without incentives for the private sector, would limit the sector’s growth and fail to meet customer needs. “If you leave it not incentivised for private sector investment, then you won’t get the investment, and the customer would not be satisfied,” he warned.
Building a Railway Ecosystem: Infrastructure, Regulations, and Policy Alignment
Another key point Dr. Sakanga raised was the concept of the “railway ecosystem,” which involves not just rolling stock but the entire infrastructure and regulatory environment. He posed critical questions: Is the current infrastructure ready for private investment? Is there an established industry to provide necessary spares in case of derailments? Is there clear regulatory compliance to instil confidence in investors?
Addressing government officials, he called for the formation of transport parliamentary committees at both regional and continental levels to monitor the progress of railway infrastructure master plans over a long-term horizon, such as 20 years. “This is the commitment we have made. With that kind of planning, you have an ecosystem which supports your manufacturing base to grow,” Dr. Sakanga stressed.
He also criticised the current state of local suppliers within the railway value chain, describing them as “middlemen” who are often outpriced due to a lack of competitiveness. To remedy this, he called for building a railway ecosystem that includes capacity building and support for local suppliers.
Transitioning to New Operating Models
Finally, Dr. Sakanga highlighted the need to transition to new railway operating models to meet the growing demand for rolling stock and wagons. “The demand for rolling stock is huge. The demand for wagons is huge. So the business is there,” he remarked. However, he noted that the current model of trade within the Southern African Development Community (SADC) is skewed, with 95% of railway traffic accounted for by exports and only 5% by imports, indicating minimal intra-regional trade.
He questioned the current concession models, asking whether they truly benefit African private sector operators or if they are merely fronting arrangements for foreign entities. To address this, he proposed opening up railway access while ensuring a clear policy mandate, regulatory alignment, infrastructure management, and a robust arbitration institution to resolve conflicts between customers and operators.
Dr. Sakanga concluded by outlining three key points necessary for railway sector growth:
- Enabling a Competitive Environment: Developing policies and strategies that encourage competition and attract private investment.
- Building the Railway Ecosystem: Focusing on infrastructure readiness, regulatory compliance, and capacity building.
- Transitioning to New Operating Models: Shifting towards inclusive and transparent models that serve the long-term interest of Africa’s railway sector.
He called on stakeholders to “stop installing railways” and start constructing them with a focus on developing Africa’s own capabilities. “All our new railways are coming in a box. We are reading a manual to construct railways,” he pointed out, urging for homegrown solutions that build long-term sustainability.
