PROJECT INFORMATION DOCUMENT (PID)

CONCEPT STAGE

Report No.: AB5783

Project Name / Southern Africa Trade and Transport Facilitation Project - Phase 1
Region / AFRICA
Sector / Roads and highways (50%); Public administration- Transportation (20%); General industry and trade sector (20%); Railways (10%)
Project ID / P122040
Borrower(s) / Dar es Salaam Corridor Management Committee
Implementing Agency / Dar es Salaam Corridor Management Committee
Environment Category / [ ] A [] B [X] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / May 4, 2010
Estimated Date of Appraisal Authorization / February 18, 2011
Estimated Date of Board Approval / May 07, 2011
  1. Key development issues and rationale for Bank involvement

Compared to other sub-regions of Africa, the southern Africa region, stretching from Tanzania to South Africa and including the countries in between, has well integrated road and rail networks, and is also well connected internationally through several major sea ports. In addition to several corridors with an east-west orientation, the region has a major multi-modal transport spine known generally as the North South Corridor (NSC). The NSC comprises two sub-corridors, namely the Dar es Salaam Corridor which connects Tanzania, Malawi, Zambia and DRC to Dar es Salaam port and the traditional North – South Corridor, which links Durban to Southern DRC, Zambia, Zimbabwe, Botswana, Malawi and northern Mozambique. The NSC is therefore, the most extensive corridor system in Africa, linking eight different countries.

However, the corridor today faces several deficiencies, both physical and operational, that make freight transport slow, costly and difficult. Presently, it can take up to 30 days for a return trip by truck from Dar es Salaam port to the DRC, of which only 8 are travel days, and costs can be as high as US$8000 per container. The railway takes even longer and as a result, the mines, which are major users of the corridor, are relying increasingly on trucks to move their cargo. While the entire NSC will be addressed under various stages of the proposed Southern Africa Trade and Transport Facilitation (SATTF) project, it should prove opportune now to focus IDA operations first on the Dar corridor, whose trunk road, rail and pipeline infrastructures extend for about 1900 km from the port of Dar es Salaam to Kapiri Moshi, a town adjacent to the Zambian Copperbelt. Cargo to/and from both the Zambian and DRC copper mining operations is moved by truck or Zambian Rail (RSZ) to Kapiri Moshi. Separately, Malawi is also connected to this corridor via the dry port at Mbeya, Tanzania, which was developed under an earlier IDA project in the late 1990s.

The Dar Corridor countries (Tanzania, Malawi, Zambia and the DRC) generally fall in a region whose overall performance lags behind all regions as measured by the Bank’s International LPI. The logistics performance of these countries varies. Zambia consistently performed worse than the other two countries and is also below the average for Sub-Saharan Africa in all aspects. Tanzania showed a significant improvement from rank 137 in 2007 to rank 95 in 2010, with the most significant improvements in logistics competence and timeliness. Generally, infrastructure and customs and border management have the lowest scores for all the countries. The corridor countries have some of the highest rates in the region for physical inspections of cargo (51%) and for shipments inspected on multiple occasions (34%). This is one of the main contributors to delays and increases in the associated costs. In addition, the LPI survey underscored the fact that the railways’ infrastructure and performance in the countries is poor or very poor. Major qualitative changes are needed to improve quality, and reliability of rail services and overall logistics performance. Given the depth and complexity of the railway agenda in the region, it would be necessary in the first stage to define clearly the expected economic role the railways will be expected to play in connecting Island destinations in Zambia, Malawi and the DRC to Dar es Salaam port.

Hence, in tackling the agenda for reform the key issues facing the Dar Corridor countries can be summarized as the (i) regulatory and reform discrepancies in scope and timing among and between the countries and their public and private sector agencies; (ii) lack of a uniform and consistent application of the various RECs (COMESA, SADC, EAC) customs, transport and transit frameworks; (iii) delays at border crossings because of lengthy procedures and poor border infrastructure; (iv) excessive number of authorized and unauthorized checkpoints along the corridor in Tanzania and other non-tariff barriers (NTB) in all countries; (v) poor condition of several segments of the Tanzam road; (vi) sub-optimal operation at Dar port, and roadside congestion due to poorly functioning city-port road interfaces; (vii) poor operational performance of the region’s railways; and (viii) need to control the spread of HIV/AIDS along transport corridors.

These issues are well known to all stakeholders and have been discussed frequently at various meetings on corridor issues that have been organized by the governments and the RECs. In an effort to better coordinate between the multiples agencies and organizations that have to be involved in any corridor program, with assistance from the USAID the countries of the Dar corridor have established the Dar Corridor Committee (DCC) to help manage regional efforts to improve transport facilitation. The DCC functions through working groups, two of which have existed for a few years, namely the Customs and Transport Working Groups. The DCC has identified several priority areas in its work-program to help address the abovementioned issues. These include: (a) the review and development of Bilateral Road Transport Agreements to help remove non-tariff barriers (NTB) as well as ensure market access for corridor service providers; (b) the reduction of corridor checkpoints. Reportedly, there are about 50 check points along the Dar corridor in Tanzania alone. Rationalizing them would help reduce transit times and as well as the opportunities for rent-seeking behavior; (c) improving rail operations. The goal is improve rail connectivity between the Tazara and RSZ, and eventually SNCC as well; and (d) improving the interfaces between road, rail and sea transport at Dar port. Movements to and from Dar port are somewhat problematic, if not chaotic, due to the port’s location in the heart of a city with limited road space. The DCC is already working with the Tanzania Ports Authority (TPA) – its hosting agency - to help develop options for improving the interfaces between the quay and landside operations.

Given the importance of corridor management, an IDA grant for Regional Agencies would be appropriate for supporting the strengthening of the DCC. Its goals and objectives match well with the key eligibility criteria for IDA grants, in particular: (i) Regional Infrastructure development – for building management and regulatory capacity for regional networks in transportation and harmonization of technical standards and the development of common regulations, procedures and legal codes; and (ii) Institutional Cooperation for Economic Integration – for the implementation and harmonization of customs unions and free trade agreements, improving the regional environment for business, investment and industrial cooperation, strengthening regional finance markets and related institutions. In addition, through its activities the DCC will enable its partners, particularly the trucking industry, to play a more prominent role in raising awareness of infectious diseases, in particular, HIV/AIDS.

The World Bank is actively engaged in the improvement of transport services in the countries along the extended North-South Corridor with several interventions. These projects comprise major road investments in Botswana, Tanzania, Zambia, DRC, Malawi and Mozambique. Most operations are multi-modal and address the issues related to customs and trade facilitation. The proposed grant supported activities fit well within the priority areas for the region and it addresses the particularly problematic multi-agency corridor coordination issue. The grant activities form an integral component of the proposed SATTF project that is under preparation now for IDA financing.

Furthermore, the World Bank has been heavily involved in the diagnostics of the current state of infrastructure in the Africa region, and in the discussions of the way forward. The various CAS for the region’s countries accord a high priority to supporting growth and competitiveness as well as improving the investment climate. The Bank has always promoted the reduction of barriers to trade as a key development priority for the region. The Bank possesses the knowledge and experience to support countries’ efforts to simplify and harmonize procedures and documentation across their logistics chain as well as to develop the institutional framework needed for the application of more efficacious risk management techniques in border inspection and customs clearing. The Bank’s dialogue and project interventions can also provide the leverage needed to effect reforms, strengthen relevant capacities, introduce appropriate technologies and promote the change management needed in a consistent manner across several countries so as to increase the likelihood of attaining the desired outcomes.

  1. Proposed objective(s)

The objective of the SATTF project is to support economic growth in southern Africa by facilitating the movement of goods and people and fostering regional integration among the countries served by the corridor. The specific sub-objectives of this grant would be to (a) strengthen one of the key institutions charged with improving the operations of the Dar corridor and (ii) support key elements of its work program.

Key Results

These will include (i) increased capacity of DCC to analyze issues and articulate them to the key stakeholders; (ii) completion of diagnostics on Tazara and other railways for the movement of cargo for Zambia and possibly the DRC.

  1. Preliminary description

The proposed SATTF project is conceived as a multi-country and multi-phase project intended to further facilitate trade integration in the region by addressing institutional, legal, policy and infrastructure constraints. Hence the SATTF would support Bank and country goals for improved management of public and private resources through promoting a more efficient operation of road and rail transport, enhancing border crossing and sea-ports operations, supporting regional integration by increasing cooperation between the border crossing agencies, as well as harmonizing procedures and enhancing transparency for all aspects of transit operations, including customs revenue collection.

This phase of the SATTF project will be focused on institution building for management of the Dar corridor which must be accorded a high priority, given the issues related to the transport of goods for DRC, Zambia and Malawi, to and from Dar es Salaam port. An effective DCC will be essential to convening stakeholder involvement in the SATTF project as a whole, and also to serving as an entry point for corridor performance monitoring. The total cost of the project would be about US6.6M. The components will include:

(i)  Institutional arrangements for transit and transport Facilitation:

Support the strengthening of the DCC as an institution that can better formulate and promote reforms to transit and transport operations along the corridor;

Support specific components of the DCC work program for the Dar corridor;

(ii)  Assess the optimal economic role for each railway in moving mining freight between

Dar es Salaam port and the copper belt in Zambia and the DRC. The development of an action plan (focusing on the policy and institutional aspects) for improving freight movements to and from the Copperbelt.

The proposed project will build on the lessons learned from other technical assistance operations. For example, (i) tasks need to be tailored to support timely and specific steps of the institutional work program; (ii) strong champions need to be identified in the key agencies of each corridor country; (iii) coordination and information sharing needs to be emphasized continually with all stakeholders; and (iv) railway reform is particularly complex and needs a long term involvement by all stakeholders.

  1. Safeguard policies that might apply

None. This is a grant for Technical Assistance and Institutional Strengthening.

Safeguard Policies Triggered / Yes / No /
Environmental Assessment (OP/BP 4.01) / X
Natural Habitats (OP/BP 4.04) / X
Forests (OP/BP 4.36) / X
Pest Management (OP 4.09) / X
Physical Cultural Resources (OP/BP 4.11) / X
Indigenous Peoples (OP/BP 4.10) / X
Involuntary Resettlement (OP/BP 4.12) / X
Safety of Dams (OP/BP 4.37) / X
Projects on International Waterways (OP/BP 7.50) / X
Projects in Disputed Areas (OP/BP 7.60) / X
  1. Tentative financing

Source: / ($m.)
BORROWER/RECIPIENT / 0.10
International Development Association (IDA) / 6.5
Total / 6.6
  1. Contact point

Contact: Emmanuel A. James

Title: Lead Transport Specialist

Tel: (202) 458-2585

Fax:

Email:

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