Lilongwe logistics hub on the cards
Faced with high transport costs due to underdeveloped transport infrastructure and reliance on road transport, the Malawi Government has moved to develop a dry port, also known as logistics hub, in Lilongwe.
The port, to be developed under public private partnership (PPP) in Area 55 near Kamuzu International Airport in Lilongwe, will be operating as a centre for transhipment of sea cargo to inland destinations and vice-versa, with facilities of custom clearance services and a concession period envisaged to be 25 years.
The dry port is being conceptualised as development over 20.9-hectare (ha) land in two phases, where phase one is development of 10.5ha land followed by phase two where 10.4ha land is developed.
In an earlier interview, Public Private Partnership Commission (PPPC) chief executive officer Patrick Kabambe, whose organisation is championing the project, said while he is confident that these projects will lead to measurable outcomes in enhancing the quality of life for Malawians, said the commission will “ensure that projects that are pursued meet standards of innovation, inclusivity and competitiveness necessary in driving social and economic development”.
Published PPPC data shows that the financial viability considers the capital expenditure for civil and construction work of the facility, which amounts to $105.79 million (about K185 billion) for development of phase one of the project.
Option two of the project, which includes both phase one and phase two amounts to $462.29 million (about K809.5 billion), acccording tothe concept.
Reads the project’s concept note: “The private partner will be responsible for the finance, design and construction under a turn-key risk basis, operating and maintenance of the project for a specified period, after which the project facilities will be transferred to the contracting authority without payment of any compensation.
“In this model, the private partner will recover their investment and operating and maintenance expenses plus a commercial return thereon, through user fees of the different components of the dry port as specified in the PPP agreement.”
National Working Group on Trade Policy chairperson Frederick Changaya said in an interview on Tuesday that this is a good development for trade and will be a good enabler for many services.
He said: “It will also facilitate more exports as combining cargo services will be available.
“Small companies with small orders that ordinarily could not make economic load will have that opportunity..”
Malawi, being a landlocked country, does not have a seaport of its own and relies on seaports of neighbouring countries such as Mozambique and Tanzania as well as Durban in South Africa and Walvis Bay in Namibia. Malawi also has Liwonde Dry Port located on the junction of two main rail lines in Machinga and also serves as a trade hub and the link to the Nacala Corridor.
