South African Firm To Take Over Railways

Durban, South Africa - Spoornet, along with Rand Merchant Bank and KMM, are hoping talks with the Ghanaian government to take over the running of the country's western railway lines will be successfully concluded by the end of the year.

Jan-Louis Spoelstra, the acting executive manager of Spoornet's international joint ventures, said that if all was agreed by December, the consortium would start running the network at the end of next year.

The 400km western line, which services bauxite and manganese ore producers, is the busiest of Ghana's railway network. The deal is worth between $12 million and $13 million.

Spoelstra said the opportunity was identified by Rand Merchant Bank, which invited Spoornet and KMM to come on board. KMM is headed by Moeletsi Mbeki, the brother of President Thabo Mbeki.

Among other things being negotiated was the length of the concession, which Spoornet hoped would be 25 years.

Spoelstra said the investment required would be about $20 million. Of that Spoornet would contribute between $1 million to $2 million, subject to board approval. The rest would be sourced from other shareholders, soft loans from the European Union and ordinary commercial debt.