Transport and Trade Facilitation, Public Private Partnership in

Transport Infrastructure

SSATP Program Initiatives

Jean Kizito KABANGUKASSATP Regional Coordinator E&S Africa

Multi-year Expert Meeting on Transport and Trade FacilitationPublic and private partnerships for the development of infrastructure

to facilitate trade and transport

Geneva, 8–10 December 2009

In this presentation…

IntroductionThe SSATPLandlocked Countries and Corridor Initiatives Improving Transit Transport CorridorsTransport Monitoring SystemPPP and Transport FacilitationOther InitiativesConclusion

Introduction

Transport and trade facilitation Infrastructure and services have become essential components for developing countries’ competitiveness in the global market

Governments are increasingly seeking private partners for the financing, building, operation and maintenance of such infrastructure and services. Public–private partnerships (PPPs)

Implementation of the Almaty Programme of Action in Land-Locked and Transit Developing and the Millenium Development Goal

The SSATPSub Saharan Africa Transport Policy Program

International Organizations

AU Commission

& NEPAD Secretariat

UNECAILO

USAID

Regional Economic

CommunitiesCEMAC

COMESAEAC

ECCASECOWAS

IGADSADC

UEMOA

Unique partnership of 35 African countries, 8 regional economic communities, 3 African institutions - AU/NEPAD and UNECA, national and regional organizations as well as international development partnersSSATP Knowledge production instrument and information sharing Hub

DonorsEC

DenmarkFranceIrelandNorwaySweden

UKIsDBankAf Bank

World Bank

15 Public and Private Sector

Regional & Sub-Regional Organizations

35 Sub Saharan African

Countries

1/7

The SSATP 2/7

SSATP Overall GoalTransport policies and strategies contributing to regional

integration, poverty reduction, and economic growth

SSATP PurposeSupport countries, RECs, and donors to strengthen the promotion of sound policies and strategies leading to

provision of reliable, safe, clean, efficient, and affordable transport

Theme 3 OutputTrade facilitation measures adopted and implemented in

major regional transit corridors

3/7

The SSATP Strategic Framework

Theme 3 OutputTrade facilitation measures adopted and implemented in major regional

transit corridorsH

arm

oniz

ed le

gisl

atio

n to

re

duce

del

ays

and

impr

ove

mov

emen

t of f

reig

ht a

nd

peop

le

RE

C-T

CC

dis

sem

inat

es

SS

ATP

best

pra

ctic

es o

n co

rrid

or m

anag

emen

t

RE

Cs

and

corr

idor

gro

ups

use

met

hodo

logy

dev

elop

ed

by S

SAT

P to

est

ablis

h an

d op

erat

e ob

serv

ator

ies

Mea

sure

s to

impr

ove

inst

itutio

nal c

apac

ity to

im

plem

ent a

ppro

pria

te

polic

ies

and

stra

tegi

es

Mea

sure

s to

impr

ove

safe

ty

and

secu

rity

alon

g co

rrid

ors

4/7

The SSATP Strategic FrameworkTheme 1

Comprehensive pro-poor and pro growth

transport sector policies

Theme 2Effective

institutional and financial

arrangements adopted

SSATP and Trade Transport Facilitation

Establishment of Corridor Management Group• Revised Northern Corridor Transit Agreement• North South Corridor Agreement• Drafting Central Corridor Protocols• Drafting CICOS Protocol on River TransportREC-TCC disseminate Best Practices• Compendium of Africa Legal Instruments on Trade and Transport Facilitation• Study on Axle load and Overload Control in Eastern and Southern Africa• Legal framework of One Stop Border PostMeasures to Improve Institution Capacity• REC Transport Coordination Committee• Nation Coordination MechanismMeasures to Improve Safety and SecurityRECs and corridor groups use methodology developed by

SSATP to establish and operate observatories

5/7

6/7

RECs and corridor groups use methodology developed by SSATP to establish and operate observatories

7/7

RECs and corridor groups use methodology developed by SSATP to establish and operate observatories

Improving Transit Transport Corridors

• Definition• Transport Infrastructure Systems connecting two, or more

points of economic activity as reliably and as cost effectively as possible (Port based approach)

• Corridor Management• Corridor Authorities (Northern Corridor)• Corridor Logistics (Maputo Corridor)

• Trade Facilitation Issues in Africa• Trade liberalization and facilitation, two major factors for

trade promotion and development• Liberalization refers to the removal of trade tariffs• Facilitation mainly deals with the removal of non-tariff

barriers to the flow of goods and traffic along trade routes or corridors

• In the case of developing countries facilitation requires even more emphasis and has greater impact in reduction of trade costs and market access

• Trade and Transport Facilitation not in place in all regions

• Need for harmonisation for some TT Facilitation Instruments

Transit Transport Corridor

1/5

Improving Transit Transport Corridors • Transit time in ports (customs, port management in

some cases, importers and freight forwarders behaviors);

• Border delays at main crossings because of cumbersome controls, inadequate infrastructure (electricity, telephone, water), lack of computerization or deficiencies in IT connections;

• Infrastructure (intermodal interfaces, roads and rail condition, missing links, etc.);

• Controls, check-points, road blocks;• Lack of enforcement of harmonized regulation • High transportation costs arising from delays incurred

due to lengthy documentation and cargo clearance procedures (at ports, border posts and inland terminals);

• Restrictive Legal and Regulatory regimes, such as restrictive investment codes (usually not harmonized) and cumbersome legal procedures;

• Weak or lack of national and regional institutions to provide affordable trade finance; and

• Insecurity as a result of unstable political environment or bad governance can also restrict trade and investment.

Trade and Transport

Facilitation Constraints

2/5

Landlocked Countries Vs Transport Corridors• The impact of being landlocked is based on the idea of

dependence over the transit state, which implies high transaction costs

• Mitigating measures for landlocked countries result of two set of actions:

• Developing a legal framework in treaties and regional agreements aimed at ensuring transit freedom,

• Developing regional transport infrastructure. (WB: 14 Billion USD from 1970 to 2007 in SSA)Nevertheless ……

• Transport prices in Africa remain the highest in the world• Transaction costs in general remain very heavy• Most regional transit agreements remain on paper

Improving Transit Transport Corridors 3/5

Transit is a process of delayed customs clearance.

Clearance Destinatio

n

Road Transit

Port of Entry

Rail Transit

MultimodalTransfer

BorderCrossing

National Transit

checkpoint

Transaction related to transit processes

Improving Transit Transport Corridors 4/5

High Transport Cost Freight tariff USD per Ton/km USA 0.02 USD par T/Km, Kenya 0.04 per T/Km, Uganda 0.085 per T/Km, Rwanda 0.090 per T/Km Niger 0.13 per T/Km Congo DRC 0.12 per T/Km Burundi 0.11 per T/Km Burkina Faso 0.09 per T/Km

Transaction Costs (Freight as % of value of imports) 8% en Europe, 11% en Afrique, 30% Afrique de l’Est, 35 % - 40% Rwanda, Burundi, Est de la RDC

Improving Transit Transport Corridors 5/5

Transport Monitoring System (Observatory)

• Framework• Which indicators?

• Data sources• Existing computerized information• Dedicated surveys where information is inadequate or missing

Volume

Time Price Quality

Corridor Total transit

Total transit time

Total price

Country Border counts

Border crossing delays, etc.

Road network, Customs fraud, etc.

Modes Nodes

Port traffic, rail activity, etc.

Port dwell time

Tariffs Fleet (rail, road), annual mileage, etc..

1/4

Transport Monitoring System (Observatory)

Port Trans Port sec Frontiere Transport Destin. Fin. TOTAL

DoualaNdjamena 24 8 8 3 39

MombasaKampala 13 4 1 1 2 21

Dar ESKampala 17 5 2 1 2 27

Delays along Selected Corridors (days)

2/4

Transport Monitoring System (Observatory)

3/4

• Observatories can supply many of the data requested,

• Extend/compare facilitation measures across the continent to benchmark and look at best/good practices

• The Corridor Performance Monitoring cannot be useful tools without • Effective and Integrity Data Collection• Critical analysis • Wide distribution of the report generated

• On regular basis, need to update the benchmark in order to cope with the Corridor Performance situation

Transport Monitoring System (Observatory)

4/4

• Why Public Private Partnership• Additional resources to meet the increase needs of investment in

Infrastructure services• Increased efficiency in project delivery and operation• Access to advanced technology• Sustainable development in Infrastructure facilities and services

• But …• The success of PPPs depends often on regulatory efficiency• Change of ownership to the private sector may not be sufficient to improve

performance (sector and market reform)• PPP mechanism may not be suitable for all projects as it has many

limitations are subject to social, political, legal and other constraints

PPP and Transport Facilitation 1/4

• Spatial Development Initiative (SDI)• Methodology as a tool to expedite infrastructure Development by

emphasizing its economic function • SDI Methodology Projects as drivers of development process

• Clear definition and prioritization of key or anchor projects• Clear elaboration of projects’ interdependence and need for integration for

success and to achieve intended benefits• Facilitate “crowding in” of investors and project financiers around integrated

business case: (enables consulting and solving mutual concerns – for quicker investment decision making)

• Strategic investment in infrastructure projects, funded by government, public private sector partnerships or private equity/debt financing, which…

• Accelerates the ongoing process of investments in small to medium sized economic generator investment projects

PPP and Transport Facilitation 2/4

PPP and Transport Facilitation • Concession process• Rail Concession

• Improving the business and regulatory environment for private sector-led trade and investment,

• Increasing access to financial services for trade and investment, and• Facilitating investment in infrastructure.• ……Results Experience

• RVR in East Africa• SITARAIL in West Africa• Spoornet in South Africa

• Challenges• Retrenchments• Infrastructure Investment• Imbalance modal split• Investment Return

3/4

PPP and Transport Facilitation • Concession process• Road Concession

• South Africa Model• Weighbridges

• Ports• Container Terminal

• Maputo• Dar Es Salaam• Abidjan• Djibouti

• CFSs and Inland Ports • Mombasa, Bujumbura,

• Pipeline Concession

4/4

PPP success stories (Source: Ocean Shipping Consultants - AICD)

Africa : performance and PPP arrangements

Port avg moves/hour operator equipmentAbidjan 20 ppp gantriesDar es Salaam 20 ppp gantriesDouala 20 ppp gantriesToamasina 18 ppp mobile cr.Djibouti 17 ppp gantriesDurban 15 public gantriesTema 14 ppp gantriesElizabeth 13 public gantriesApapa 12 recent ppp gantriesCapetown 12 public gantriesMombasa 10 public gantriesDakar 10 recent ppp mobile cr.Maputo 10 ppp gantriesBeira 9 ppp gantriesPort Sudan 8 public gantriesWalvis Bay 8 public ship's gearEast London 8 public ship's gearLuanda 8 recent ppp ship's gearMatadi 7 public ship's gearPointe Noire 7 public ship's gear

Other Initiatives• East Africa Trade and Transport Facilitation

Project•Kenya, Uganda, Tanzania and Rwanda,

• CEMAC/Central Africa Trade and Transport Facilitation Project

•Cameroun, Tchad, RCA ; Douala corridor),

• West Africa Transport Facilitation Project•Ghana, Burkina Faso, Mali ; Tema corridor,

• Abidjan-Lagos Corridor Trade and Trade Facilitation

•Cote d’Ivoire, Ghana, Togo, Benin, Nigeria

Conclusion• Transit Transport Constraints it is not just the poor quality of physical

infrastructure, Non implementation of regional trade facilitation instrument is an issue

• More regulatory reform and harmonization is required to drive down the cost of trade

• Customs and Documentations procedures• Border crossing procedures• Removal of non physical barriers• Implementation of regional trade facilitation Instruments

• As regions become more integrated, regulation should pass on to regional regulatory bodies

• Appropriate mechanisms for stakeholder involvement Effective transit agreements

• Increasing regional integration and trade is vital to enabling higher levels of economic diversification and foreign direct investment.

• The private sector can play a role in building Africa’s capacity to TRADE

1/2

Finally……

• SSATP invites all development partners, Trade and Transport Stakeholders to use SSATP to partner for Trade and Transport Facilitation and Regional Integration

• SSATP offers an excellent network and a platform which can benefit to all interested parties such as researchers, civil society, private sector to exchange good practices and knowledge on key issues related to transport

• Available Publications on Trade and Transport Facilitation can be downloaded from Website www.ssatp.org or www.worldbank.org/afr/ssatp

Conclusion 2/2

www.ssatp.orgwww.worldbank.org/afr/ssatp

Contacts

Program Managersvincent@worldbank.org

Regional Coordinators (W&C, E&S)yadzigbey@worldbank.org

jkabanguka@worldbank.org