There needs to be less cargo transported by road and more by rail that was the message from Trade and Industry Minister Rob Davies as he launched the Musina Intermodal Terminal (MIT) on Monday.
The terminal, which is funded by public-private partnership, is situated about 10km from the Beitbridge border crossing on the SA-Zimbabwe border and aims to facilitate shipment of cargo from road to rail and by doing so reducing the cost of cross-board trade.
By some estimates, the cross border road traffic volumes of all cargo types at Beitbridge is about 11-million tonnes per annum. MIT is aiming to pursue 10% of that volume to switch to rail.
In his address Davies said that the terminal was an important stepping stone in what government wanted to achieve in the area.
The Department of Trade and Industry in 2016 announced the Musina-Makhado special economic zone which prompted the creation of the terminal.
Davies said that the terminal was key to removing decongestion at the Durban port.
“This project is designed to improve transport logistics which is key to interregional trade,” he said.
Davies said that the biggest cost of doing trade on the continent was not tariffs but the cost of infrastructure.
The terminal is being backed by two Musina based businesses, Lionshare Developments, a property developer, and Musina Associated Carriers, a transport and logistics company.
Lionshare CEO Isaac Chalumbira said they are investing R110m to upgrade the existing infrastructure in phase one which should be completed in the next 18 months. Phase two will focus on coal and while some of the infrastructure needed is already in place they will need a further R200m to build a bigger cement slab to accommodate the coking coal.
Chalumbira said he wants more of the R100bn worth of goods that moves through the border town to benefit the community and reduce transport costs, he said, otherwise there is “no reason for it”.
A truck takes about two days to move its cargo from Musina to Durban if its documents are in order but that can be extend by days if it is not. Ash Ganasen, project director from MIT, said the bigger problem was at the Durban port. He said that congestion from all the trucks heading to the port creates at some points a 12-14 hour wait just to get into the terminal.
Rail removes some of that congestion as containers can be staked easily and then transported to freight ships without the delay.
The terminal can handle up to 3-million tonnes per annum of cargo, both bulk and in containers, but the capacity of the terminal can be increased to over 8-million tonnes per annum. Ganasen said that they can scale the capacity depending on the demand.
He said that by moving cargo from trucks to trains is expected to result in drop in logistics costs and road congestion.
Ganasen said that the key now was to change minds on making the shift from transporting cargo by train.
“We feel like there is no way you can convert people from trucking to rail without offering at least a 10% saving to them, just to change the mindset … otherwise people just continue doing what they have been doing,” said Ganasen.
In the short to medium term MIT is aiming to handle about 2.1-million tonnes of cargo per annum onto rail, including about 1.5-million tonnes per annum of locally produced coal.
Ganasen said that they are hoping to move by rail chrome, nickel and copper down to Durban and transport wheat and pharmaceuticals out of South Africa through Musina.
The terminal was established during early 2017 to facilitate the interchange and use of road and rail as a catalyst to use either, or both, where commercially sustainable.
Davies also announced that Scania, a heavy freight vehicle company, will launch a service dealership to be rebuilt in MIT to service its vehicles passing through the boarder point while it will train local residents.
The terminal is expected to create 500 new jobs in Musina and Davies said that it had the potential to create over 10,000 jobs.