Jan. 22 (Bloomberg) -- Japan today joined Germany, China and France in bidding to build a 157 billion rand ($18 billion) high-speed rail link between South Africa’s eastern port city of Durban and Johannesburg, the country’s commercial hub.
Funding models include partnerships between government and private business, with a combination of yen loans and equity, Yoshimasa Sakon of Japan International Consultants for Transportation Co., told officials from government, the construction industry and business in Durban. The railway will be built in two phases, with completion in 2025, according to Sakon’s pre-feasibility presentation made on behalf of the state-owned Japan External Trade Organization.
In the national budget last year, the Finance Ministry lists 3.2 trillion rand of infrastructure projects it is considering implementing by 2020, including 300 billion rand for a high-speed railway, to boost economic growth and create jobs for the one in four South Africans who are unemployed.
In South Africa, “currently only 7% of passenger and freight transport is by rail,” Sakon said. The study proposes that the first phase, between King Shaka Airport, north of Durban, Durban and Pietermaritzburg, 80 kilometers (50 miles) inland, be completed by 2020, he said. The second phase to Johannesburg would be completed by 2025 at a total cost of 157 billion rand, he said.
South Africa wants to increase the amount of goods and passengers transported by rail to 80% by 2025, Ruth Bhengu, chairwoman of the government’s portfolio committee on transport, said in an interview after the presentation.
The committee visited France, Germany, China and Japan to assess their transportation systems, Bhengu said. One of the conditions of foreign investment in the project would be the creation of local manufacturing hubs to supply the rolling stock and rail components, she said.
“We define transport as the heartbeat of economic development,” Bhengu said. “We must use transport to develop social standards, to make the movement of people and goods easy and to make trading with South Africa easy.”
The trains would be able to transport 48 shipping containers, known as TEUs, of 160 kilometers per hour (100 miles per hour) and 600 passengers at 300 kilometers per hour, Sakon said.
“Passengers would travel between Johannesburg and Durban during the day, and freight would be transported at night,” he said.
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