WASHINGTON, June 29, 2010 – The World Bank Board of Executive Directors approved today an International Development Association grant equivalent to US$255 million to promote good governance and consolidate macroeconomic stability and economic growth in the Democratic Republic of Congo (DRC) through the rehabilitation of key transport infrastructure which, in turn, will help improve the provision of social services and reduce vulnerability of the poor.
The Multimodal Transport Project’s development objectives are: (i) to improve transport connectivity in DRC so as to support economic integration; (ii) to restore the financial and operational viability of the Société Nationale des Chemins de Fer du Congo (the national railway company – SNCC); and (iii) to support the reform agenda of state-owned transport sector enterprises through the adoption and implementation of a sector-wide governance plan and strengthening of operational performance.
The bulk of DRC’s territory is currently inaccessible. Out of ten provincial capitals, only two (Matadi and Mbandaka) are connected by road to the capital city, Kinshasa; two others are only accessible by river (Kisangani and Bandundu) and six only by air (Katanga, Mbuji-Mayi, Lubumbashi, Kindu, Goma,,and Bukavu). Communication between these capitals and other provincial centers, as well as access to rural areas, is often not possible. Since national unity and economic stability are the government’s top two priorities, improving the transport sector’s performance constitutes a vital goal for the Government of DRC.
“In line with the government’s sector strategy, the mission of the Multimodal Transport Project is to stimulate economic growth and contribute to poverty reduction through targeted investments and reforms in the management of transport infrastructure and services,” said Pierre Pozzo di Borgo, the Project’s Task Team Leader.
The project includes four components:
Component 1 (US$218.85 million) – SNCC recovery plan: The collapse of SNCC would have incalculable consequences on the Congolese economy, including on the potential future growth of its mining sector as its network connects DRC’s copper belt to its main export routes. Due to this urgent need for financial assistance and considering the minimal size of the intervention required to deliver sustainable results for SNCC (US$617 million), the MTP will dedicate nearly 90 percent of its funding to the SNCC Recovery Plan. This money will complement the US$373 million already pledged by the government toward the SNCC Recovery Plan as well as the US$25 million earmarked for it under the existing World Bank Private Sector Development and Competitiveness Project.
Component 2 (US$25.45 million) – Operational performance strengthening and improved governance of the sector: This component will: (i) finance the acquisition of urgently needed equipment for selected transport state-owned enterprises (SOEs)―Régie des Voies Maritimes - National Marine Ways Management Agency (RVM), Régie des Voies Aériennes - National Airways Management Agency (RVA), Office National des Transports - National Transport Office (ONATRA) and Régie des Voies Fluviales - National Waterways Management Agency (RVF)―in order to improve their overall performance while allowing them to devote limited internal resources toward restructuring; (ii) pay for the retirement indemnities of 77 RVF agents using an approach similar to that used for SNCC; (iii) pay for an internal diagnostic of the Ministry of Transport so as to identify possible reorganizational scenarios; (iv) finance ministry of transport’s agents training and equipment; (v) finance the annual audits of SOEs procurement and financial activities that will be used to strengthen from the project onset SOE fiduciary governance; and (vi) allow the development of a sector-wide governance plan which will then be tailored for adoption by each individual SOE.
Component 3 (US$2 million) – International trade procedures simplification: This component will prepare for the implementation of international trade agreements and in light of the ongoing study on the facilitation of international trade, the project will support the development of an international trade procedures simplification strategy and the associated action plan, including materials, equipments and basic infrastructure investments designed to facilitate the flow of goods along DRC’s main international trade transport corridors.
Component 4 (US$8.70 million) – Project management: This final component will fund the cost of the project management entity located within the ministry of transport in charge of the MTP. The entity will have two project units.
“The development of the transport sector is a key enabler in increasing agriculture sector output, improving internal and external trade competitiveness, supporting mining sector growth and combating the economic malaise that affects isolated communities,” said Marie Francoise Marie-Nelly, World Bank Country Director for DRC and the Republic of Congo.
The project will be implemented as a partnership between the Government of DRC, the World Bank and other partners. Though no joint financing is foreseen among partners, most of the project’s activities will be complemented through parallel ongoing partners and/or government financing.
“In many secluded regions of the seven provinces served by SNCC, the railway is the only connection to the outside world for local communities. Its collapse would not only affect negatively the prices of consumer goods but also the access to local and regional markets,” said Pierre Pozzo di Borgo. “The SNCC Recovery Plan supported by the Multimodal Transport Project is, therefore, most important for the populations located along the rail line and as such contributes to DRC’s fight against poverty.”
