Tuesday, Oct 24, 2017
Infrastructure | Government | Africa | Democratic Republic of Congo

Infrastructure, Public Works & Reconstruction

More PPPs to bridge huge infrastructure gap


2 years ago

Fridolin Kasweshi Musoka, Minister of Infrastructure, Public Works & Reconstruction
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Fridolin Kasweshi Musoka

Minister of Infrastructure, Public Works & Reconstruction

The DRC government has prioritized the modernization and reconstruction of the country’s basic infrastructure. Public-private partnerships (PPPs) are proving a successful model, particularly with the Chinese. Minister of Infrastructure, Public Works & Reconstruction Fridolin Kasweshi Musoka provides an in-depth look at the scope of work available for the right partners, where the opportunities lie, and why community participation and local expertise are essential for foreign contractors to successfully complete infrastructure projects.

What is your assessment of the progress currently registered in the infrastructure sector and what are the projects that you would like to highlight to an international audience?

Infrastructure needs in our country are many; it must be noted that the DRC covers 2,345,000km2. It should also be remembered that the current infrastructure is mostly inherited from colonial times; in the 1960s the country had 153,000km of roads, 58,000km of which were of public interest. These are important roads that can be considered main arteries, feeder lines of major hydraulic, rail and airport structures. Unfortunately, since the 1960s the country experienced a decline in economic activity, mainly focused on agricultural production and some mining activity, resulting in a significant deterioration of infrastructure, which by the 1980s had degraded by over 90%.

By the time of the 1997 Liberation War, which allowed the country to achieve democracy in 2003 by forming a national coalition government and paved the way for the 2006 democratic elections, the country counted no more than 4,600km of accessible roads out of the 58,000km of roads of national interest. Today, this country counts nearly 23,000km of roads thanks to the support of numerous technical and financial partners, such as the World Bank, the European Union (EU), the African Development Bank (AfDB), and various bilateral cooperation agreements, mainly with Western countries. We must highlight that we have also built roads with our own funds, although inconsistently up until 2010, as well through public-private partnerships (PPPs).

The focus on roads is linked to the fact that roads are the principal mode of transport in the DRC. The rivers, once the major transport route for large cargo, are currently under-used due to the low level of domestic production, mainly the production of palm oil, cotton and rubber, which has suffered a great setback, if not completely come to a halt.

As for air transport, it is much more limited to wealthy consumers because the income of the general population is still too low to deal with these types of expenses. Rail transport has not been spared, having also experienced a huge downturn. It was essentially just focused on collecting products in areas of high agricultural production, which are today very weak.

Today our priorities are such that we should first ensure national cohesion through the main roads that would essentially connect the 26 new provinces, compared to the 11 provinces of the previous system that has been recently changed. We must also ensure the delivery of the products from high-production areas nationwide to consumer areas, which are essentially the cities. Lastly, the aim is to guarantee the transport of persons and services across the country. The annual requirement is estimated today at about $1.1 billion – of which the majority is for the rehabilitation of road infrastructure and the remaining 10% for their maintenance. The current budget achieves only about 20% of that amount, which proves sufficiently that there is still much work to be done to fully meet this need in terms of rehabilitation and modernization of existing infrastructure to meet international requirements and standards.

 

Business opportunities in the infrastructure sector exist in the form of PPPs and cooperation agreements with the aim of exchanging of technology, training and funding. What is the current role of the private sector and how can capital-intensive projects benefit from PPPs?

Historically speaking, unlike the countries colonized by the British and French, who favored a development policy focused on human capital, Belgium was experiencing financial difficulties at the end of the Second World War, and therefore major basic infrastructure was not in the scope of the Belgian budget. As a result, Belgium turned to the private sector, who primarily developed the segments of cross-border infrastructure needed to move agricultural and mining products to consumer countries: in the south, through the route leading to the port of Durban in South Africa and Dar Es Salaam in Tanzania, in the north by the transatlantic route through the ports of Matadi and Boma, and in the south-east to the port of Lobito via Angola. These were essentially the three main export axes.

The country had actually, at that time, a certain industrial activity which facilitated the production of manufactured products. However, this development, which was essentially carried out by the private sector, favored regional infrastructure rather than national ones, as they were the most profitable.

56 years after independence, there had been unfortunately a slowing down of domestic production with no diversification of the economy. The country remained dependent mainly on the mining and natural resources sector. Therefore only a part of these cross-border routes allowed for return on investment on the infrastructure and thus public-private partnerships.

To date, there are only two major bankable segments, namely, the transatlantic corridor from Kinshasa to Matadi, which sees road traffic of about 2,800 vehicles per day, well below the ideal figure of 15,000 vehicles per day needed to create a good profitability scenario for the paved roads. The current results are almost five times less, and the government is trying to support the profitability of the projects by in some cases applying toll rates that are beyond the rates allowed and applied in countries of the different sub-regions that the DRC belongs to.

In the south, we principally have mining activity, although the contrast is quite strong as the quantity of material required to produce certain metals is often more substantial than the quantity of metals produced; on average, three tons of material are required to produce one ton of metal. Foreign-owned companies often transport these metals, and it is quite likely that out of three vehicles entering the country, two vehicles return empty and only one vehicle leaves with mining products, which must cover the entirety of the transport costs. This is why the government must undertake a concerted effort to diversify the economy and make this activity much more national, in order to develop the other sectors. Unfortunately, to do this, due to the country’s difficulties, it must look to PPPs.

In the interior of the country, many highways barely meet a certain level of traffic. For example, in the east (on the Mombasa–North Kivu route), the maximum traffic reached is a flow of about 200 vehicles per day. In these cases, the country may only seek partnerships for compacted dirt roads rather than paved roads. It should be noted that of the 58,000km of roads of public interest, only 3,000km are paved, which is nearly 5% of the entire road network, compared to an average of 15% in general in Africa, 70% in the Maghreb and nearly 30% in southern Africa.

This is sufficient proof that there is still a lot of work to be done and it is the reason why the Belgians had resorted to the PPP system to develop the country’s infrastructure, often highly capital-intensive investments.

 

How important to national competitiveness is decentralization and improving access to the country’s interior? (The objective being to ensure the transport of people and goods from production hubs to consumer centers.)

The development must start from local communities, which should develop strategies adapted to their location, based upon the President’s vision as defined at the national level, the “Revolution of Modernity” development program, which aims to overcome all the challenges that have heretofore hindered the country’s development.

In this sense, many initiatives have emerged to effectively stimulate actions likely to improve the conditions of people’s lives within these local communities. The Constitution also advocates that jurisdiction should be attributed to these communities over the road network, exclusive of the national highways; that is to say the regional roads, which constitute a large portion of the road network, and local roads, which are currently under the authority of these provincial or local entities. A certain consistency is required with national policy, but policies that are defined at the national level are implemented taking into account the environment in which they must be applied.

There are many initiatives that have been adopted, and there is also a growing trend in the transfer of human capital from urban to rural areas, thus enabling a more consistent development in these local communities.

 

How can the construction industry assist in the creation of a high added-value economy, so that the country can continue this trend of sustained growth and increase its competitiveness in the international arena?

The construction sector today is amongst the key sectors for the development of the DRC. We must currently find solutions adapted to each context. However, some projects, entrusted to international companies, suffered from a lack of control of the environment in which they evolved. It is important to be acquainted with local knowledge and expertise to be able to set up the appropriate works and infrastructure, at competitive costs, to meet the genuine needs of the population. The fact is that almost 30% of the infrastructure projects established by foreign companies are oversized because the data is sometimes based on poorly controlled statistics and unsuitable methods. That’s why community participation and local expertise are necessary.

Given that the country has not yet fully improved its system of collection of statistical data, local expertise is useful to best meet the needs of the population and build better infrastructure adapted to local needs. This sector requires expensive investments, and investing in people can ensure that the communities feel the benefits. A strong participation of the population in these projects would also promote better use and protection of these infrastructures over the long term.




Will the Congolese Agency for Major Works, l’Agence Congolaise des Grands Travaux (ACGT), celebrating its seventh year of existence, limit itself to the Sino-Congolese program for which it was created (as a partner to the Chinese in their infrastructure investments in DRC), or could it be interested in other projects and programs?

It is true that this structure was initially created to meet the need to regulate the Sino-Congolese projects that have helped boost the country’s basic infrastructure. 60% of urban roads and other modern roads in Kinshasa have been built thanks to this program. This is the case of the Boulevard du 30 Juin, which connects the production centers (administrative centers) and the residential centers, designed in the colonial style; although this concept is still to be reviewed, to create compact and autonomous towns and cities where the various commercial and administrative activities would be conducted. Then we have the Grand Boulevard, called “Triomphal” (triumphant), which has also been built thanks to this program, as well as Lumumba Boulevard, which enables the fluid movement from the capital to the airport and vice-versa, and was funded entirely by the Congolese government through the determination of the President.

Today, this Agency employs first-rate staff, recruited on very competitive criteria, although part of this staff comes from the so-called permanent structures, such as the Roads Authority, l’Office des Routes, or the Office of Roads and Drainage, l’Office des Voiries et Drainage (O.V.D), which was created in the 1970s and whose workforce is, naturally, aging. At this time, these very young engineers have attended many training courses on different themes, and are versatile enough to be able to bring their expertise to all kinds of projects.

The ambition of the Agency currently is no longer limited to the Sino-Congolese program, but rather to expand across the country as a distinguished engineering consultancy following the example of the Major Works Agency of Côte d’Ivoire (l’Agence de Grands Travaux de la Côte d’Ivoire), and that of other African countries. This will help provide a solution to the need for studies and modern construction in all types of projects, not only the projects within the framework of the Sino-Congolese program.

It is important to note that the Sino-Congolese program must not simply be limited to the mining sector or to financing, but should also be a model to be used for future partnerships. It is true that while many define it as an exchange between natural resources and infrastructure, in reality it is mining activities that – by the profits generated thereafter – guarantee the construction of infrastructure even before profits are collected; that is to say, without waiting for the profitability phase of the mining project.

Which explains why, through this program, investment in infrastructure has already reached more than $750 million while mining production, carried out by the SICOMINES company, only started production in February 2015. Everybody knows that the company cannot be profitable until a few years after beginning production (4 to 8 years depending on the business plan put in place).

 

How would you define the collaboration that currently exists between the public sector, the private sector and the academic or professional training sector, and in which areas should it be developed further?

Logic dictates that the sector of higher education and scientific research addresses the needs of the population, given that this sector has the time to pursue issues and can project trends into the future. This would enable the government, who tend to seek immediate solutions, to quickly enact policies when research is readily available.

In the case of the infrastructure sector, the majority of constructed infrastructure benefits from the input and expertise of our universities; mainly the Polytechnic Faculty of the University of Kinshasa, which has received some upgrading thanks to the support of technical and financial partners such as the African Development Bank and the Belgian Technical Cooperation.

In the agricultural sector, it should be highlighted that roughly 65% of the population is predominantly rural and depends on agriculture for subsistence. One of the issues inherent in making agriculture truly productive and profitable is the fact that we need to implement much more modern methods of farming combined with more suitable technical and scientific training. In the same way that the cost of investing in infrastructure is extremely high, we must also find methods appropriate for this context. To do this, we must ipso facto involve the scientific research and university component to meet the needs of the sector.

It is also important to go as far as technical training to not only develop new techniques and methods, but also the skilled labor necessary to implement them. Thus, technical and vocational education has been detached from the general primary and secondary education to put an emphasis on training, in order to produce skilled workers capable of being the drivers between researchers, engineers and the workforce, in particular through the National Institute of Vocational Training, l’Institut National de Préparation Professionnelle, which remains a model for institutes of this kind in Africa.

 

In this already heavily populated city, can Kinshasa’s rapid population growth (11 million inhabitants in Kinshasa and 70 million in the country) be considered as an asset or a burden when it comes to reconstruction and urban planning?

This element may be considered an asset. The key is to improve the urban planning in residential areas in order for this asset to produce better results. In the 1960s, Kinshasa had 400,000 inhabitants and the city had been built to accommodate about 600,000 inhabitants. Because of the way the city was built at that time, the city became quickly overcrowded. Strategic development plans had been implemented up until the 1970s to better organize this megalopolis.

However, shortly thereafter, the population growth created huge problems, as is the case throughout Africa, due to the lack of resources necessary to ensure the proper implementation of key infrastructure; namely public transport, basic utilities (water and electricity), wastewater treatment and essential infrastructure (schools and hospitals), which should have been built according to international standards, close to the population. This remains a major challenge for Kinshasa in its search to become a hub of innovation and economic growth.

However, four years ago another strategic plan allowed the development of the blueprint of the urban area of the city of Kinshasa, with the support of the French Development Agency, l’Agence Française au Développement, and other key consultants, to be able to design and plan the development of the city of Kinshasa over the next 15 years. This plan primarily foresees major critical infrastructure without too much detail on secondary roads, tertiary roads or water distribution networks; but rather large volumes of water and electricity production, to thereby ensure a minimum level of performance. This plan requires an investment of about $5 billion to implement it, but at the current time I believe, unless mistaken, that the city of Kinshasa is not capable of investing more than $100 million a year in infrastructure, taking into account all revenue sources.

Therefore it would be necessary to reconfigure this strategy taking into account the current means of the city, and through the diversification of the economy and creation of wealth allow for Kinshasa to eventually respond to its needs. Unfortunately, we are still witnessing today unplanned urbanization, thus creating many problems, such as erosions due to sandy clay soil; difficulties in the management of waste that should otherwise be taken care of; issues with the distribution of drinking water and electricity; the inefficient positioning of neighborhoods that hinders a proper census of the population; and access to essential services such as schools and hospitals. The concern exists, policies have been put in place and plans developed; now we need more will and commitment to find solutions to the challenges before us, taking into account our current reality.



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