GREEN LIGHT FOR BANANA PORT BUT CHALLENGES REMAIN

The most striking fact is that the new concession effectively provides access to DPW to the Matadi terminal facilities operated by the state-owned company Societe Congolaise des Transports et des Ports (SCTP). The implication is that DPW will become involved in operations here with this justified as part of its efforts to establish a ‘logistics corridor’ to the main market of the capital city of Kinshasa. Africa Intelligence points out this arrangement seems to fly in the face of a 2019 memorandum of understanding with Qatar which had expressed interest in getting involved in port operations in Matadi and other ports in the Democratic Republic of the Congo (DRC).

There is already one private sector operator, ICTSI, active in Matadi operating from facilities which opened for business in 2016. ICTSI developed a greenfield terminal adjacent to SCTP and operates there in partnership with SCTP and SIMOBILE (a local logistic company). To-date it has co-existed comfortably alongside the state-owned port facilities which operate with a large workforce.

Interestingly, the revised concession agreement states that the government will rehabilitate the road between Banana and Matadi in accordance with technical specifications provided by DPW. Clearly, this will be an expensive project but it will not be designated as a road subject to tolls by users, the usual method of funding such projects. The plan is for DPW to provide administrative support to the government to obtain a bank loan to support the upgrade of the road which is presently in very poor condition. Some observers nevertheless question the ability of this element of the project to be funded and developed in a complementary timeframe to the new Banana port development in which case it could result in delays to the development of the planned new container terminal facilities but with DPW profiting from establishing a foothold in Matadi.

Questions have been raised previously with regard to Banana’s distant location from the main market of Kinshasa. Land transport in the DRC is extremely expensive and while the intention is to develop terminal facilities in Banana that can service vessels of up to 18,000TEU capacity it is evident that any lower freight rate achieved via the use of high-capacity vessels will not provide an adequate offset to cover the more expensive land transport costs of trucking from Banana to Kinshasa compared to the significantly lower trucking costs involved in using Matadi Port.

The plan is to develop the new Banana port – there are currently only limited facilities in place there – in four phases with the first phase envisaging a 350,000TEU facility. Subsequent phases will be demand triggered and will entail capacity additions of 100,000TEU and two 200,000TEU expansion phases – a significant capacity addition to a market which in 2021 reached only around 200,000 TEU.

The initial step, however, is for DPW to carry out a feasibility study over 18 months with this aimed at defining the technical, economic and financial conditions underpinning the development. It is not known specifically if these works will include a detailed market analysis but clearly there are challenges in this area given land transportation costs as well as the aspect of coordinating the road development with the port development.