SNCC’s Strategic Expansion and Modernisation Amidst DRC’s Mining Boom
While attending the Land-Linked Zambia 2024 event in Zambia between 4th & 5th of April, we had the opportunity to have a brief Coffee with the Editor – with Ir. Victor Kaluila Muzembe, Director of Planning for the Société Nationale des Chemins de Fer du Congo (SNCC). Those familiar with railway developments in the Democratic Republic of the Congo will appreciate the proactive steps SNCC has taken to open its railway network to private operators. To date, 15 open access agreements have been secured, with five operators currently operating on SNCC’s 3,641 km rail network – which, according to Victor, is the second-largest in the Southern African Development Community (SADC), trailing only South Africa. Despite this extensive network, the principal challenge in cargo transportation is not a shortage of cargo but rather poor track conditions and a lack of rolling stock. Given the high demand for commodities from the DRC, a pressing question arises: what measures are being implemented to fix these issues?
The SNCC has transitioned from a public institution to a commercial society, enabling it to engage freely with all parties. Although the government remains the sole owner, the company is now open to additional investors interested in contributing to the Democratic Republic of the Congo’s railway sector. These investments would help replace and renew the railway infrastructure and purchase new rolling stock. However, the international market’s challenging conditions have led to instances where potential investors declare their intentions but subsequently withdraw their commitment.
In response to these challenges, the current board and its Managing Director, Fabien Mutomb Kan Kato, have implemented a new procedure aimed at increasing cargo volumes. This procedure involves the introduction of an access fee, known in French as ‘le droit de passage’, which allows private operators to use their locomotives and wagons on the SNCC rail network. As part of this initiative, a discount is offered: operators receive a percentage reduction on the usual fees, meaning that when you bring your own locomotives the tariff is reduced by 20%. For each wagon loaded with cargo, a 15% discount on tariffs is applied. Therefore, if the standard charge per wagon is $100, the operator pays only $85, retaining the $15 difference as savings, [these are hypothetical numbers]. This pricing strategy has successfully attracted approximately $13 million in private investments from various private companies, including mining companies.
To extend the benefits of these initiatives, SNCC has reached out to neighbouring railway companies such as Zambia Railways, NRZ, and TFR, encouraging them to adopt similar policies. Specifically, with TFR, an agreement is sought whereby they would be able to use their own rolling stock to transport cargo into the DRC, benefiting from the same tariff reductions, and vice versa, promoting reciprocal benefits and increased cargo movement across the region.
Given the deteriorating state of the railway tracks, there arises a critical question about whether the charges being levied are sufficient and whether SNCC’s new business model is sustainable. Victor affirms that the model is working, since the introduction of the new procedure in March 2022, SNCC has seen a marked increase in cargo, particularly imports. Initially, uptake was slow, but now there is significant engagement from various logistics companies, including Swala Logistics, among others.
The mining industry, frustrated by the congested road networks, has been a significant catalyst for this shift. Roads, particularly in the DRC and surrounding countries, are often overwhelmed with stationary trucks, creating bottlenecks. An illustrative example is the route from Lubumbashi to Kasumbalesa, which frequently sees trucks stuck in traffic. As a remedy, the rail system is being promoted as an alternative.
To further support this modal shift, the Development Bank of Africa is considering investing in the construction of a dry port in Kasumbalesa. This facility would serve as a logistics hub where containers from overseas can be offloaded from trucks and reloaded onto trains or domestic trucks for delivery to the mines. This process would be mirrored for exports, streamlining the transport of goods from the mines to Kasumbalesa and then to international destinations. This initiative reflects a broader strategy to optimise logistics and enhance the efficiency of cargo movement in and out of the DRC.
In addressing the issues with track conditions at SNCC, Victor emphasises the company’s efforts and strategies. Funding from the government, although not substantial, has enabled the renewal of small sections of the railway. Additionally, the shift towards a commercial model has opened doors to private investment. Notably, a private company has already contributed $60 million towards refurbishing 80km of track. This investment will be recouped through future transport fees once increased cargo volumes are achieved. Despite the start of transportation, the cargo volumes have not yet reached the levels necessary for the investor to recover their investment fully. However, preparations and readiness for scaling up are well in place. SNCC has also made significant progress in upgrading its infrastructure, including ordering new rails and sleepers.
Regarding rolling stock, SNCC’s capabilities are slowly improving. Whilst only having 20-25 operational locomotives, the government has recently purchased an additional 10 locomotives, with the first five already delivered and the next five expected by May or June this year. This expansion is critical in increasing the operational efficiency and cargo handling capacity of SNCC as it continues to modernise and expand its services.
SNCC is currently acquiring eight second-hand locomotives and undertaking repairs on the 38 previously acquired units. This refurbishment programme aims to restore the older locomotives to operational status. The company’s focus has shifted towards leveraging the ‘droit de passage’—a system that permits private operators to use SNCC’s rail infrastructure for a fee. Presently, SNCC has incorporated 15 locomotives from these private operators into its network, in French this is referred to as ‘interland minier’, where these locomotives will service the Katanga region, a significant mining area. By allocating these locomotives to the mining regions, SNCC has been able to redeploy its fleet to other productive areas of its network. This strategic reallocation allows SNCC to maximise the use of its rolling stock in regions that produce higher revenues, particularly through the transportation of agricultural products and other goods, where tariffs are more lucrative than those in the mining sector. This approach not only optimises resource utilisation but also enhances the overall productivity and profitability of SNCC’s operations.
Expanding the rail network
SNCC is actively planning to expand its railway network, with a focus on projects that would extend its reach to Kinshasa and enhance connectivity within the Democratic Republic of the Congo. One of the primary projects under consideration is the extension of the railway line to connect the Port of Ilebo, centrally located in the DRC, directly to Kinshasa. This extension would position SNCC as the sole national railway operator capable of servicing the capital.
Currently, there is a 360-kilometre railway line from Kinshasa to Matadi, which is operated by another company, ONATRA. This line primarily supports port operations and other logistics needs but is not optimised for broader railway transport services. Notably, Victor says this line is legally owned by SNCC, according to official documents.
By connecting Ilebo to Kinshasa, SNCC aims to create a more cohesive and comprehensive national railway network. This would not only facilitate better transport links but also boost economic activities by improving access to major ports and urban centres across the country. This expansion is seen as a strategic move to consolidate SNCC’s position as the dominant railway operator in the DRC, ensuring that it can meet the transport and logistical needs of both the mining sectors and the broader economic landscape.
In addition to the planned extension of the railway network to Kinshasa and the integration of existing lines, SNCC has several ambitious projects aimed at significantly increasing its cargo capacity, particularly to support the mining sector.
One of the key objectives is to enhance the railway’s capacity to handle the substantial output from the mines. The mines are projected to produce up to 5 million tonnes of various commodities, including sulphur, coal, and petroleum. Currently, these mines are producing around 2.3 million tonnes, matched by an equivalent quantity of imports, totalling approximately 4.6 to 5 million tonnes that need to be transported annually.
However, SNCC’s current transport capabilities are significantly underutilised, as it is only transporting less than 500,000 tonnes. This represents a small fraction of the potential cargo, highlighting a critical gap that SNCC aims to close through developmental projects. By upgrading and expanding its railway infrastructure, SNCC seeks to boost its transport capacity to meet the existing and future demands of the mining industry, thus playing a pivotal role in the economic growth and resource distribution within the DRC. These improvements will not only facilitate more efficient cargo movement but also reinforce the railway’s role as a backbone of the national economy.