North-Western Railways (NWR) has agreed a $250 million financing package with lenders from Britain, South Africa and United States to build a rail link in a copper mining region, its chairman said on Tuesday.
Enoch Kavindele said NWR would receive funds from investors and lenders in the three countries to construct a railway line that will eventually link Zambia and Angola’s Benguela railways.
Kavindele said the railway line will initially link the Lumwana Copper mine in the new mining town of Solwezi, northwest of the capital Lusaka, to the Copper Belt town of Chingola to enable the copper mines to use it for carrying copper and cobalt.
Kavindele said an Environmental Impact Assessment (EIA) was currently being done by a South African firm and construction work would start as soon as it was completed.
“We have finally secured the $250 million needed for the railway project. Our financiers, mostly from the United States, the United Kingdom and South Africa will get the project started once the EIA is completed,” Kavindele told journalists, giving no further details.
Kavindele said NWR has since appointed Nedbank Capital of South Africa as its financial advisor.
The project had initially drawn the interest of some Chinese investors who later withdrew, Kavindele said.
“The Chinese also had agreed to finance this project. However, their conditions were onerous in that they wanted a guarantee by the Zambian government. As this is a private project, we opted for other investors coming in individually and through loans,” Kavindele said.
Kavindele, a former Zambian vice president, also disclosed that he had received a grant of about $1.4 million from South Africa’s Capital Equipment and Allied Services (CEAS) to complete the design of the railway project.
Kavindele said the $1.4 million grant was given to NWR on the understanding that 60 per cent of the technical services for the project would be imported from South Africa as recommended by the financiers.
Kavindele said NWR last week signed a consultancy agreement with South Africa’s Kwezi V3 Engineers and DB International of Germany for the rail project.
Good Job man. We need many more Zambians like you who know how to invest.
If only there were more men of vision.We wish you best.
The EIA is not complete???I make no apologies for my scepticism on the eventual success of this project under the current promoters.$250million ukubika njanji?? Ala bane tulinoku tamba ifintu!!The very copper this railway will transport is needed by China and they refused to part with any money for it ??The Chinese are not even part of the consortium given their experience and past history with railway building both in China and Africa ??? $1.4million has been received to COMPLETE the design of the project (which does not have a complete EIA)!!!! Among the contributors to this forum please can someone allay my fears!!Particularly welcome would be comments from bloggers with project finance expertise.
What about Enock Kavindele for Pres in 2011? I am just floating E.K to memebers of this blog and see how you can rate him. He has shown some good investing abilities and prudence in his financial capacity. He is already rich and no need to worry about him stealing the public confers but uf you elect a poor fellow like FTJ you can see the results.Your comments please!!
Kavindele would make a good president, I agree.
AGAIN # 4 AND 5 MEANINGLESS,PHONE KAVINDELE,LET HIM STICK TO BUSINESS.
no hidden agendas on this blog
It is quite obvious 4 and 5 know nothing about this man.His political history eliminates him instantly.Woe be tide should we reveal his business history. Word of advice guys…….look at somebody else for 2011!!!
A few weeks ago I read somewhere that Government were thinking of constructing a rail line to link CB with NW province. So how does this private venture (NWR) now fit into the whole picture?
Obviously such an investiment is good for the local economy, but I’m concerned by the clause that 60 percent of technical services must be provided by South Africa, what about home-grown industry?
Kavindele for president Hell no, the man is Kongole prone, we shall borrow more than we can sustain, let him borrow for himself not the tax that i will pay. Running a country is different from running a business, so really i cant back calls advocating for EK’s candidature besides we would be recycling the same people who have failed us in the past. He belongs to the old school and in the end we could see people as irellevant as RP comming back into cabinet because such people do not belive there time is up,what we need is new clean blood.
Cosmos(Sweden..8),maybe if the nature of these technical services is explained we would understand!!Governments usually build rail lines,bridges etc etc.For such capital intensive projects to succeed Government participation by way of direct financing or long term incentivisation is cardinal.With this in mind and the points in my earlier submission(3), i am wondering whether or not this private sector intiative will succeed.
4# Kavindele can not make it for president. Remember he caused all this confusion at Mulungushi Rock of Authority in the run up to 1988 general election when withdraw on the 11th hour his candidature for president. Pundit is right not all people are meant to leaders he is a businessman let him concentrate on this area. He was once vice president I believe the short lived one amóng Zambians vp. Look he is borrowing yet he has the money himself why not lend the govt this money? This not wealth for the economy borrowing is burden for the coming generation. We making ourselves slaves forever. Over the Pundit there is nothing wrong we have no qualified man power in the area. We need to train such people is any one a trained rail engineer – I mean not maintaining something but bui´lding something from a scrach.
#4. Power 2 the people – USA
You are naive.
Just because Kavindele is rich does not mean that he is immune from stealing public funds.
As a matter of fact, rich people, if they mean to steal, steal Big.
At least Kavindele is one Zambia who Just talks, he is a very innovative and astute businessman.I Know he will succeed with this project.
I remember him many years being the local agent for General Electric of America and signing contracts with Zambia Airways for the supply of spare airecraft engines.
Like BY he must stick to business and not politics
At least Kavindele is one Zambia who Just does not talk, he is a very innovative and astute businessman.I Know he will succeed with this project.
I remember him many years being the local agent for General Electric of America and signing contracts with Zambia Airways for the supply of spare airecraft engines.
Like BY he must stick to business and not politics
Ba EASY..dont talk about subjects you dont understand. what Kavis is doing is called opportunity cost. Let me educate you. Say he has $250M which he can invest @ 25% interest. At the same time he can get a loan from out side Z @ 10% interest. as a business man it is good business to invest his money at 25% and get a loan @10%. Lets stick to discussing politics investmenst and loan procurement is a complex subject.
Ba Citizen (13), what ever happened to the General Electric franchise,the Isuzu franchise, the IBM franchise, Woodgate House and Holdings,the building by the round about opp. ZRA,the presidency of MMD, the vice presidency of GRZ,the seat in Parliament……..Fine Tuning !!!!!
Innovative yes…..astute ????????
SAGe in any you prefer to get a loan outside even if you have the money. Kavidele is rich and if the railway was of any benefit for his home area why borrow. We Zambians are used leaving on handouts and when they lender ask there money you you start complaining at iyo expoilation. The other day you were talking of local investments so why now foreign investment abruptly good. Is it because its not coming from the head of state. Pundit don talk Zambia airways and Kavindele the plane never came back it was impounded because of paying bills. So Kavidele maybe was get percentages from such dealings. Ba Kuku long term investments are well paying so long there costumers.
SAGe in any you prefer to get a loan outside even if you have the money. Kavidele is rich and if the railway was of any benefit for his home area why borrow. We Zambians are used leaving on handouts and when they lender ask there money you you start complaining at iyo expoilation. The other day you were talking of local investments so why now foreign investment abruptly good. Is it because its not coming from the head of state. Pundit don talk Zambia airways and Kavindele the plane never came back it was impounded because of paying bills. So Kavidele maybe was get percentages from such dealings. Ba Kuku long term investments are well paying so long there customers.
EASY.. This is private investment. kavindele is the investor looking for funding for his project. Again “OPPORTUNITY COST” The best way to invest is to use other peoples money at a low interest rate and invest your money at a higher interest rate. Remember a rail line is a long term project. If Kavis invests his $250M it might take him may 5 years to get operational and probably another 5 years to break even. Nomba unfwa Loans for capital projects can go for 10 years interest free. and part of the loan may even be a grant for as long as it is benefiting the people. That means the total cost of ownaship(TCO) will be lower for Kavis while the ROI will be high do the math Personal money $250M @25% over 10 years. Loan $250M @ 7% over 10 years with a posibility of 20% of the loan amount being a grant. If you analyse the data you will realise that the ROI on his $250M would pay for the $250M borrowd for the project. This will offset the impact investing his personal money in railline which
would probably start making a profit in 15 – 20 years. Separete private investment from government borrowing. When GRZ borrows you can not see where the money goes. We end up with a $7BN debt with nothing to show for.
Gents, natuchindike impiya!I doubt there is a Zambian worth $250million.Furthermore, there is no Zambian who has the collateral to secure borrowings of $250million either!!!!Sage(19), i mean no disrespect, but i strongly suggest you consult someone who can explain the intricate nature of project finance to you.Long term financing is very expensive and is complicated business that is why developmental projects of this nature are Govt. sponsored or involve govt participation.I eagerly await guidance from project finance specialists.
Good points pandit.. I dont think Kavindele has $250M either. I was merely responding to the claim that Kavindele should use his money using the principle of opportunity cost. The reason why we dont always use our personal money to fund projects is because you can always find cheaper money.I had an order for 10 Computers from Dell for export to Z. Dell offered me to buy the 10Pc at 5.5% interest loan over 12 months. Considering that i was going to sale the Pc’s at more than 50%. I took the offer. This also gave me an opportunity to sale the same computers on a 12 month term to my customers. In the end it didnt cost me anything to conduct this transaction. I made a profit and still kept my cash. The principle here is that you dont always have to use your cash to do business. Shop arround. If you are in a technology business you will atleast make 60% profit. It doesnt hete for you to get a loan at 25% from ZANACO to conduct business. Do some math before spending you cash.
#3 I agree with you about this project.Firstly the govt is not being transparent on how they awarded this deal to EK.Not long ago we were told govt was looking into building the line from NW to CB.I have my fears over EK, this guy contributed to the collapse of Union Bank because of his over borrowing and not paying back.This project has alot of questiosn than answers.We know world wide the cost of borrowing is not as much as it could be in Zambia.EIA is not compelete but already funding has been secured?? Where is our own ECZ in this regard? 60% of techinical services will be imported and I hope the 40 % will be local.EK is an opportunist and at the same time he is a chancer.We need alot of info to analyse this project adequately but Iam not comfortable with the whole deal.Its hair raising and govt needs to be cautious over this.
#23 You have not made a single point on this subject except the fact that you dont trust EK.ECZ just analyses the impact a project will have on the enviroment. What really is your problem with EK’s project?
#24 My fears about EK is based on what he has done previously and secondly how this whole lucrative deal has not been floated to every zambian,its not transparent.Now coming to the project itself we all know that The development of complex financial instruments and the spate of loan arrangements without traditional covenants suggest another maxim: EK not long ago was involved in another scandalous dela that ended in a very desreputable way where he was supposed to be mining the old slag from Nkana mine and was only served becuase of his position.
Concerns have been mounting around the world that years of low interest rates has encouraged a climate of risk-taking, fuelling an asset price boom that may not be sustainable as borrowing costs rise or conditions change.I would like more details as what sort of loan it is and what future repurcussions are.
Excessive leverage is the common theme of many financial crises of the past. Has EK beocme cleverer than in the financiers of the past?
‘You have to speculate to accumulate’ or ‘the greater the risk, the greater potential reward’ — these are both aphorisms that people freely trot out as we go through life. However, it is not a good idea to base your investing career on the ‘truth’ of this advice. In fact, if you turn the advice upside down it may serve you better ‘if you speculate you may lose what you have accumulated’ and ‘the greater the risk, the greater the potential loss.’
Speculation in investing can often involve investing in businesses that are not yet making any profit, but which you hope will go on to make a lot of profit. The theory is that spectacular business vol rises may occur because you got in early enough.
However, exactly the opposite can happen.Critically look at Tazara, its the sole business line to the east cost but it didnot mean it will monopolise the freight business, the same can happen to NW line hence my more questions than anaswers
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#24 SAGE look at #27 and compare the capital outlay in constructing 100KM of a stretch and $250m between CB and NW how many KMs are there? This project sounds more of ncekelako than anything else.EK to be honest with you he nearing bankrupcy and this loan will believe you me be undoubtedly be misused and there is every possibility of this project failing or not taking off , we need more details to make informed decisions.The govt has been slippery to let such a project of such magnititude to opportunists like EK.Its a sensitive project that deserved serious attention
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#29 Mwaice Easy there is no need to doubt this project ,its real if you dont know EK has just capitalised on your Leadership which is in a hurry to put its name on the global market.The question you can ask yourself why did the Chinese back out? Because Chinese these days can not ignore a business whose future is certain.Am sure they compared likes to likes and asked for govt guarantee?Understand hat to guarantee means?
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#29 Easy get to their website its quite a fantastic one just punch in POYRY.COM all the details are there, why could not your inept govt shopped around before sinking so low as to award this contract to people with crooked past?Let us learn to be analytical when dealing with our economy that is the only way we shall avoid future mishaps like the SPOORNET saga.IT pays to research around before making decisions.
Ba Kuku…..bravo bravo !!! excellent contributions.Being ignorant of the intricate nature of railway development, I am now much wiser.The Govt. has NOT awarded any rail build contract to EPK…..he has exercised his right to build whatever he wants subject to rules and regulations of the land. Even we can call a press conference and announce we intend to build a railway from Nakonde to Shang’ombo!!!My initial contribution (3) questions this private intiative.Maybe GRZ is giving an opportunity to EPK and very soon, because it is not likely to take off, they will step in with proper and feasible arrangements to have this railway built. GRZ must not be seen to stifle private sector intiatives !!!
#32 Building a rail line is not like building a road, it calls for serious expertise cos of the nature of business and more over its dealing with clients who hold the lifeline of our economy.The scanty data about this deal is what Iam worried of,the rules and regulation, are they in place, BIG NO, IF THEY WERE SPoornet would have not been a tragic.I would have loved a situation where govt partner with NWR, the way #27 is dealt with, long term plans so that all pros and cons are cautiously taken care of.Otherwise it will be the collapse of another Union bank, Woodgate holdings,Kubota tractor,Woodgate computers,the ugly building at Kabwe roundabout etc and will have wasted time with jokers
The mines in the North West have a serious bottleneck looming…….we do not have enough haulage capacity to transport finished products to the existing points of export.It is this need that has precipitated the “apparent EPK innovation” of a rail line.Most would be financiers have noted this deficiency and are reluctant to lend these mines money because to be paid back….the product has to be transported to the market and sold!!! We need to pressurize govt to 1. build a reliable railway network as soon as possible(cast all jokers aside) 2. in the interim, reduce or zero rate duty on heavy haulage vehicles (this will attract more players into heavy haulage and allow existing fleets to replace the junk they call heavy haulage fleets!!!) I eagerly await contributions to refine my humble ideas/observations/proposals.
#34 The problems in this area are immense, the roads are in a bad state,this where we need a private partnership with the Mining Companies or is it rather fair trade arrangement ploughing in part back of their profits in the development of infra structure becoz it will just be a one off project.But that aside , your recommendations ‘Pundit’ are credible and feasible but the question comes in ,how do you implement the zero rate policy?Not all truckers carry copper others carry maize but they are all heavy haulage trucks, it becomes a bit dice to do that,some win win solution which is through joint efforts(govt,mining co) is the only way out to seek a more plausible remedy
Ba Kuku(36),i wouldn’t think it would matter what use a 30 tonne and above truck is put to.The result would be an upgrade and increase in haulage capacity.Increased haulage capacity will inadvertently bring down the price of all goods that are transported countrywide.The govt. zero rated minibuses a few years ago…..the overall transport situation improved did it not?? The road levy in the price of fuel coupled with the re-introduction of toll gates and modernisation of weigh bridges would make available locally sourced funding for road rehabilitation.Our economy,as you have highlighted,must look to private and Govt. partnerships to jump start capital intensive developmental projects.Railway development should be extended to the transportation of human capital as well. Imagine if we had a proper and reliable rail service from Kabwe to Kafue.people could live in Kabwe but work in Lusaka, Kafue or vice versa.Mobility of labour,goods and services are cardinal for industrial development
#36 Now you are talking, I appreciate your analytical skills, articulate and conscise analysis, I hope some one who either answers by the name of Magande or Chuchu should take note of some of these points.If applied can build Zambia.Well done Pundit.
SAGE, doesnt this make you happy for now?We need your further analyses,zero in to conclude.
BaKuku(37), many thanks, but i’m merely following in the footsteps of great contributors such as yourself.
Ba Sage, the ball is in your court for concluding remarks !!!!!
Kuku.. You are forgeting that after construction of the rail line you also need to buy locomotives(train) also hire employees to run the train system.
Ba Sage(39), i hope you are talking about the acquisition of electrically powered trains.Gone are the days when steam/coal fired locomotives were the in thing. We can be environmentally friendly and at the same time give ZESCO more business!!!
#39 Umwana pa kwenda abalilapo ukwamfula, we are in the crawling stage of course when we come to the walking stage will have hired you as Chief commercial offcier ,Easy as Director of Planning , KC as CEO but like #40 says we need electrically powered trains dont forget NW is in a hive of activities , there is oil also so cash flow is not an issue, the issues are strategies and getting things to run.Mr Mumba from Mporokoso will be the Chief Electrical Engineer-Power Generation, and moreover this will be cost effective power generation method, a tractor rim and some Ifa tyres no turbines and digging 100 or 500m under rivers to create the force,then we create a damn on Zambezi river or Kafue river ,done deal.But nuclear power will be ideal so that we dont have these load shading stuff by Sisala and Co.
Ba Kuku (41), on load shedding…..are you aware ZESCO cannot meet the demand for power at the moment and becoz NW province is not on the SADCC grid they will find it difficult to import to satisfy the new mines?? This is a big issue among foreign financiers who are jittery about lending out money for mines that are not sure of a reliable source of power??? Maybe we have started running before we can even walk ??? Have a word with the Zesco engineers and they will explain how only one line can go to the mines without a backup.(financiers are only comfortable if there are contingencies and if there aren’t any…..the cost of credit goes up!!!)
#43 ZESCO got funding $3m from Barclays to boost power in NW what did they do with that money?And this is about 4years ago.It boils down to one thing ineptitude executive from Chuchu down through ZDA down to Zesco.I dont understand the managerial abilities of these guys.Structures must be in place before commissioning a project but in our case everything is done differently and the converse is always the case.Ala twanaka amaka yonse yaba mu kwikata FTJ whenareas needing development are suffering.That Chi Sisala man is not fit for purpose.Chuchu is dili darling about him just because he is his nephew, he should just fire the chap.Farmers are affected,they should target govt official house for load shedding so that they sit up,even Chuchu’s residence for a change
#40 i agree we need env friendly trains. but the point is EK has to secure funding for the trains before the rail line is constructed.#43 Kuku my friend we are still operating on 1964 capacity. KK didnt have a plan for the expansion of ZESCO but he didnt syphone the money out of ZESCO becuase he had ZCCM to milk. FTJ and Mwansa finished of ZESCO. $3M is northing in the nergy industry. $3M cant even build a small power station. LPM is also milking ZAMTEL and ZESCO you will soon see when everybody goes VOIP and ZAMTEL still wants to use PSTN lines how messed up things will look. Right now instead of doing reaserch and investing in the future GRZ is passifying ZAMTEL. Zambia has no say in which direction technology goes. we are consumers . We invent nothing. The world over is talking Bio diesel LPM is incinuating that Jethropa plants will distroy the soil. India has been planting Jethropa for more than 20 years. Istead of taking advantage of the opportunity that has presented itself …
we are busy trying to shoot down the idea. I know bio diesel involves mass plantations , may be that is the problem, we are lazy ha?
#44 this $3m wasnot meant for setting up another generation power plant, this was a feasible done project specifuically to feed into NW Kansanshi and Lumwana mines and alot of consultants from all over including World Bank came for reality check and gave it a go ahead, so I dont see it being a problem unless those consultants they brought in cooked figures like Kalembe Kafyuke does in his project management.Look at it from this,ZCCM operated on the same grids effeciently so the $3m was just about right to extend into NW, it was a booster not a reconstruction capital outlay of a generation plant
Hi you Guys Kuku, Pundits, SAGE sorry I missed your very viable discussion because I was out. Thank u 4 the nice and constructive ideas. The Debate was of at high level and very creative. Real if we want to develop our country we can do because we have people with brilliant ideas and suggestions. Definately I can help in Planing there is just too much opportunities to be exploiated. Gentlmen dont forget the other mines in Kalomo and our old coal mine in Maamba which will mean improving the already existing railway from Kitwe to Livingstone it must be also be electrified. This will mean to improving network and mobility at the same reducing climate changes impact. We have deversify real deversification not only just in words but in act. Remember Zambia Sugar and Mpulungu port providing Kapenta and finish.We have to think also of western province what kind of Business it can offer. In eastern province we must expand the bicycle plant this will save our surrounding from envirnomental….
ctd.. hazards for many people will opt to cycle. A creation of research institutions collecting data must be done instead of relying on CSO always which govt controlled.
Kuku by the way when I put the adress of Provy I was not doubting the contract made by NWR I wanted someone to compare because one of a bloger here brought in the construction of a railwy line in Algeria at lesser cost. That is all I wanted to be done. You know the problem we face over corruption and over withdrawing our accounts for projects with less costs. This is the reason why we have Stella, Katele in court due to the fraud business
We need to put Zesco under the LusakaTimes microscope.They ultimately have the responsibility of distributing “power to the people”!!!It is quite obvious they are unable to meet the growing demands of our economy.We can put all sorts of industries up but ZESCO cannot “power” us!!!I’m very worried that alot of projects are going to be suspended due to the inability of the power monopoly to do their part.We have heard of the rural electrification project.Is it still in existence……are ZESCO still paying teachers,soldiers etc ??? Having seen their year end accounts their wage bill is a horrific percentage of their expenses. Are we serious about industrial development given that we cannot “power up” any new major industries ??Could someone “shed” some light on this !!!
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