Thelo, a local logistics and freight services provider in the rail sector,is upgrading its strategic partnership with German company, DB Engineering and Consulting, to a full technical partner on the continent.
The firm is a company of Deutsche Bahn that specialises in consulting, planning, and implementation services for infrastructure and mobility projects, with more than 6 200 employees from 96 countries.
This comes as Thelo launches Thelo Capital, a finance sourcing entity to mobilise at least $250 million (R4.5 billion) to kickstart opportunities in the developing Africa Continental Free Trade Area (AfCFTA) agreement.
Thelo, which already had the $3.2 billion Ghana Western Rail line project, is on the shortlist of the Trans Kalahari project and the planned port and rail infrastructure project at Boegebaai in the Northern Cape.
Its founder and CEO, Ronnie Ntuli, said they were in advanced discussions with two other governments in mineral rich countries in Africa, that had expressed an interest in working with Thelo in developing ports and rail infrastructure to transport minerals.
In an interview with Business Report, Ntuli said the group's offering of interconnected transport corridors was in response to Africa’s transportation challenges, and a strategic move to support AfCFTA’s single market.
He said the group had noted that with AfCFTA in motion, the transport sector was expected to expand by nearly 50%, significantly boosting intra-African trade. Its success hinges on improving Africa’s road, rail and transport infrastructure, whose current dilapidated state meant costs were up to 75% higher than in other parts of the world.
“We are mobilising capital from investors in Africa and internationally, and leveraging world-class engineering and operational capacity to create large-scale interconnected transport and logistics corridors for Africa,” Ntuli said.
“As an independent African company, Thelo is playing an instrumental role in developing, operating and managing national and regional development corridors.
“Importantly, Thelo’s multi-freight, multi-user approach will deliver more efficient transport solutions to multiple freight owners at economies of scale that will reduce transport and logistic costs.”
Ntuli said that according to the African Development Bank, there was a need of between $35bn and $47bn investment in transport infrastructure on the African continent, which was what Thelo saw as a strategic opportunity to position itself as a logistics champion.
“We will support development of critical infrastructure to enable closing of the gap as a start, but critically to enable the movement of freight and trade produce on trade corridors in a more efficient manner,” he said.
“So as a group we will continue with the rolling stock business and will inject growth into that.”
Thelo has grown on the back of a strong rolling-stock business in the Southern African region and is entrenched in Eswatini, Mozambique's three main corridors, Zambia and Tanzania.
The Group continues to finance rolling stock (locomotives and freight wagons) through lease arrangements with rail operators and freight owners. It is advancing negotiations to establish strategic partnerships for its ports vision.
Ntuli said Thelo would leverage its partnerships with the Industrial Development Corporation (IDC), which has 10% ownership of Thelo Rolling Stock, and would count on a Memorandum of Understanding with the African Export-Import Bank (Afreximbank), which was acting as mandated lead arranger and adviser for Thelo’s rail corridor and infrastructure development projects.
“By bringing world-class global expertise and capacity to the African railway and ports sector, we are the right strategic partner for investors in Africa’s transport and logistics sector.” he said.
Ntuli said the DB E&C, a subsidiary of Deutsche Bahn Group A. G. (DB) is expected as a technical partner across sub-Saharan Africa to develop, manage and deliver engineering, technical and consulting capacity, as well as enhance the operational efficiencies of Thelo’s railway sector projects.
Thelo was interested in developments in South Africa’s open access to Transnet's rail infrastructure and was capable of participating effectively.
“We are watching very closely the developments around private sector participation; we certainly have the capacity, the capability to be an effective player within that reformed sector in the SA market,” Ntuli said.
“What we have to do is wait and see what the open access regime will be like in the SA market from a commercial point of view and what the government eventually decides in terms of the regulatory framework for private sector participation.”
BUSINESS REPORT