Sunday, Oct 22, 2017
Infrastructure | Transport | Africa | Democratic Republic of Congo

National Transport & Ports Company (SCTP)

$1bn partners could turn DR Congo's wealth of potential into reality


1 year ago

Jean Kimbembe Mazunga, General Manager of the Société Congolaise des Transports et des Ports (SCTP, or National Transport & Ports Company)
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Jean Kimbembe Mazunga

General Manager of the National Transport & Ports Company (SCTP)

Mobility in Democratic Republic of Congo is one of the most important challenges for the country in its drive to become an emerging nation by 2030. Each mode of transportation, be it road, river, sea, air or rail, has enormous potential for development and investment. For this reason, infrastructure and transport have become a top priority of the government. Jean Kimbembe Mazunga, General Manager of the National Transport & Ports Company (SCTP) provides an in-depth look at the $1bn investment potential in DRC’s transport and infrastructure.

 

As a transportation expert, what is your vision of the sector and how does the National Transport & Port Company (SCTP) contribute to its development?

I would first say it is important that global economies and investors understand DRC has significant strengths in macroeconomic terms. The country is among the three most dynamic economies in the world, with a stable exchange rate and controlled inflation of 0.8%. The image that many people have of the country does not correspond to the reality, which is that it is safe both economically and socially.

The transport sector is a priority for our government. The head of state’s vision, called the Cinq Chantiers, are the five pillars on which depends the development of our country – in infrastructure, education, job creation, water, electricity, and health. The infrastructure pillar is made up of five sectors: road, river, rail, sea and air. DRC is really a subcontinent of 2,345,410 square kilometers divided into 26 provinces, and a population of more than 70 million.

In colonial times, Congo had about 145,000km of roads for 14 million people, as pointed out by our first President Joseph Kasavubu in 1960. From 1960 to 2015 the population multiplied by five, from 14 to 70 million, but what about the road infrastructure? From 1960 to 1965 the country experienced war. In 1971, with the World Bank’s support, the government of the day created the Office des Routes, in charge of managing and developing the 55,000km of roads. We went from 145,000km of roads in 1960 to 55,000km of roads in 1971. 80,000km were abandoned, returned to nature after two seasons without maintenance. This has contributed to the isolation of certain territories.

When I was a student studying civil engineering, I did my final internship at ONATRA’s (now SCTP) shipyard. ONATRA had nearly 1,000 boats to serve the Congo River and its tributaries, more than 16,000km of waterways; but now that I am SCTP’s General Manager, I only manage 20 boats at most.

SCTP also manages DRC’s shortest railway network. Our country’s continental dimensions impose multimodal transport solutions. Boats take manufactured goods to Matadi, passing through Matadi’s port, then go by train to the capital city of Kinshasa, an important center of consumption, and then transit the river to reach the various provinces. The multimodal model is the only transportation method that can service the diverse landscapes of the country.

SCTP, as the company in charge of water transport, has nearly 16,000kms of waterways to serve, as well as 366km of railway between Matadi and Kinshasa (it's shorter than the National Railway Company of Congo’s railway network, which spans nearly 5,000km of roads and railways in the east of the country). This section remains so far the most important because it connects the ocean to Matadi’s port to the capital.

The company had around 1,000 boats in the past but is down now to only 20. To face these challenges, we first have to upgrade our shipyards. N'Dolo shipyard in Kinshasa is among the most important. We require the rehabilitation of these non-decommissioned, non-functioning spaces, which represents a great investment opportunity.

Regarding inland ports and transport, everything must be upgraded. This also represents investment opportunities; we are open to the private sector. The head of state has often said that international financial institutions are there to support us, but to a certain extent. However, development will be done with the support of private partners; we must put the private investors wherever it suitable for them and accompany them, for it is the latter that will put DRC on the path to development.

The importance of reforms must also be highlighted. ONATRA owes its existence to reforms. In 1935, Belgium’s king understood that there were too many transport companies, and so merged them to make a single structure: the Office of Colonial Transport (OTRACO) – first reform.

In 1960, we went from the Office of the Colonial Transport to the Congolese Transport Office – second reform. Later, to be more accurate, we changed the name to the National Office for Transport (ONATRA). The government had assets in ONATRA before transforming it into a commercial company following the latest reform. Today we must think about reforming again in order to attract the necessary capital and thus rehabilitate our infrastructure.

Our country’s history had a negative impact on many sectors, including transport. During war times, it produced nothing; there were no more agricultural activities; boats stopped working, some were even requisitioned by the rebels, others by the army to lead the fight. Now the war has ended, it is now necessary to reintroduce the boats to the water and order new ones, but we need money. We must seek funds from donors and the private sector. This must of course be done through mechanisms allowing private sector investments to be profitable; it must be a win-win relationship. The private entity invests its money against collateral from us.

In order to rehabilitate the Kinshasa-Matadi railroad to modern standards, we need more than $300 million in investment. Some sections are limited to 50 km per hour, others to 30 km per hour, some to 40. Today, when a train leaves Matadi at 7am, it arrives in Kinshasa at 3pm, which is a feat. Commercial speed is limited to a maximum of 55 km per hour, but it could reach 90 km per hour if not for the poor track conditions. We must inject capital to restore this railway that is over 117 years old. The Kinshasa-Matadi line was opened in 1878; it is time to act.

Matadi’s port also needs to be upgraded. We have two harbor cranes that were designed at a time when we did not know to handle containers; docks must also be improved. All these updates require no less than a billion dollars of investment to rehabilitate and modernize SCTP’s assets. For this reason, we need to build partnerships between the private and the public sectors, thus a new reform has to be put into place.

 

How would you define the collaboration that exists between the government and the private sector, and in which fields would it be necessary to strengthen these agreements?

I was in primary school when I learnt that my country was potentially rich, and Congo is still “potentially rich”. The big challenge it is to convert this potential into tangible wealth: to bring to the foreground the appearances of mines and lands and transform them into wealth for the population; take the wood of forests, cut it, transform it into wealth, and even transform food. There is progress to be made in all sectors. Our growth has to depend on our production and on the transformation of all of which is still at the “potential” stage; it is the only way to boost our growth. We possess oil fields, and are among the rare countries that have oil sand fields. But there, also, it is necessary for us to attract capital in order to convert what we have into tangible wealth.

In terms of farming, we have more than 80 million hectares of arable land, of which only 10% is exploited; it is necessary to take the Bukanga-Lonzo agro-industrial park concept that the government recently implemented and apply it in other zones. It is crucial to establish industrial parks to add value to agricultural products, and to domesticate these arable hectares to support growth.

These are vital sectors; the infrastructure, mining and agro-industrial sectors require partnerships with some private partners for their development. It is necessary to underline that we are among the rare countries of the world where the government still organizes public transportation. Everywhere else, private companies are responsible for transportation.

As a relevant illustration, from 2001 to 2003, while we were ruled by the transitional government after the war, a load of legal instruments were put in place, such as the investment code or the mining code; commercial courts were established, as well as the National Agency for Investment Promotion (ANAPI). All these mechanisms and instruments were established to create favorable conditions for investment; investors suddenly had all the required instruments to lead businesses with confidence.

The way is thus already drawn. Attractive measures are now needed; to apply all these legal instruments it is necessary to attract investments. As SCTP’s managing director, I have to work for the development of the transportation sector; it is necessary to provide the means for development, like increasing commercial speed and reducing all the blocking points including railroad standardization. Investors are not expected to do everything; it is not paternalism, but partnerships that we want.

The government has implemented a strategy for the sector in order to open up the provinces, through larger national and regional connection projects. How does SCTP contribute to trade and to regional integration?

SCTP, or ONATRA as it was previously known, is considered the country’s economic backbone. In colonial times, OTRACO’s president also held a deputy governor position. Nowadays, SCTP operates in 7 of the former 11 provinces.

The interior of the country was once terribly isolated. Once President Joseph Kabila was elected, the effort was made to connect centers of production with transit and consumption centers. Secondly, it was fundamental to connect the administrative center with the provinces, through waterways, roads, etc. Back then, the administrative division of the country was built in such a way that nearly two weeks were needed to travel from Matadi to Kinshasa versus just four hours of travel time today.

We need boats to transport agricultural goods. Agricultural activities drastically fell without river transportation. Farmers may produce, but no transportation means exist to bring the products to processing centers. Today, each time the new ITB Kokolo boat berths, markets are flooded with many different products therefore decreasing the price per unit. The boat allows us to have the cheapest means of transport. With trucks, we are limited to 30 tons, whereas boats can ship up to 1000 tons; with 300-ton barges we can ship 1200 tons. Waterways are very important for an economy like ours that wishes to thrive. During the Prime Minister’s visit to Chanic’s shipyard, where the MB Gungu ship is in rehabilitation, he insisted on the fact that this latter was undoubtedly a growth driver, benefiting the entire economy.

That's not all. Our railroad network may be smaller, but it is even more strategic. A train takes 12 hours to ship 750 tons at once between Matadi and Kinshasa: in comparison a truck can, fully loaded, ship up to 30 tons.

Yes, railways are fundamental to our country’s economic stimulus. We understand it. We understand the company’s importance in the multimodal transport chain, and its contribution to the country’s growth. By looking closer, it is true that the growth is steadier in the mining industry; infrastructure is also growing. With river ports, there is a great deal of infrastructure to be built, harbor facilities to upgrade, railroad stations to be standardized. These are all investment opportunities.

 

There's a major race between countries to become the main logistics hub in the region. Many have strategic ports; the competitive environment is fierce. DRC has one unique feature: unlike other countries in the region, the two maritime Boma and Matadi ports are actually located on the river. Where is DRC in this race to become the regional logistics hub? What new infrastructure, like the new deep-water port of Banana, may help DRC achieve this goal?

Yes, the solution to becoming a regional hub must pass by the deep-water port of Banana. Matadi is not a seaport, but an internal transit port to the river. This port was created to allow the construction of the colony; to transport manufactured goods to Kinshasa; to build the city that would later become the national logistic hub; to distribute goods by boat towards the provinces of the interior. Matadi‘s port is not competitive in regard to other ports because it is inland; it is necessary to cross the maritime reach that must constantly be swept of sand. Operating conditions require that boats stay at anchor until there is a trained captain available who is capable of navigating the boat through the maritime reach; yet this reach is inescapable, all of those who want to come to DRC have to go that way. To be competitive, a deep-water port must be built at Banana, the country’s only access to the Atlantic Ocean.

Today we have many problems with the port; some ship owners who cannot travel the river to Matadi stop instead in Pointe-Noire, in the neighboring country of Congo-Brazzaville. Then, the goods must pass through Brazzaville to Kinshasa by railroad. It represents a substantial loss of time and money, raising the cost of goods. In the end, consumers pay the price yet it is of our responsibility to protect them. Otherwise, people pass through Angola, by crossing Lufu by road into DRC. All these useless logistic stages should be able to be avoided so that end products can be affordable.

 

A little more than a year after taking office, you have managed, with SCTP’s own funds, to boost productivity in each of the departments of the company, therefore restoring hope to the workers and to the Congolese government that the company can flourish again. What has made these good results possible?

We had to believe in our mission. I have the advantage of having worked my entire career in this sector, much of the time in this company that I know so well. In the past, I temporarily replaced the Minister of Transport, thus I was informed about problems that existed inside this company. For 10 years, as special advisor to the President, I saw things from a higher perspective; we saw there were things to improve, and we offered solutions. Upon my arrival here, this experience allowed me to put my colleagues, civil engineers and economists back on the right path. There was a tremendous potential in this company, but it was necessary to find ways to re-motivate troops; it was necessary regain an entrepreneurial spirit; every department worked in isolation, it was necessary for us to break this mentality and to re-connect the company. I believe that it worked well; our staff trusts us. When I began as Managing Director, the department directors – the highest managers below the managing director – left the office at 4pm. Today, we meet every day for an evaluation meeting, sometimes late at night. Private companies have accompanied us in this transition.

We found several months of back pay, leading to strikes that were eventually detrimental to the previous team. We visited two banks to accompany us in fixing this problem; SCTP has a legacy based on property owning – in the colonial times, it seems to me that we were the owner of half of the country’s real estate. How, with such an asset, could a bank not trust us? I think that it was necessary to surround ourselves with trusted people, to clearly present objectives and include them in relaunching railroad activities and the transport discussions.

Today, our company’s success was quoted in one of the President’s annual speeches at the close of 2015; it is flattering but it is not a reason to rest. My role is to remind those who are here that they are there to work. And if one day things turn bad, we shall have to feel responsible. For the moment it is necessary to be proud, because what we have done is working. 



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