Road/Rail Project's Investment Criteria

Reviewing past studies of infrastructure appraisal in Sudan revealed a difference in the ways each mode is dealt with in regard to technical and economic justification. It could be considered that this difference in investment mechanism affects development of different modes in imbalanced way and might result in unrecoverable waste of resources.

The Railway started in 1897 as a military arm for Anglo Egyptian army invading the country. Then, the construction of the early railway was strategic and not on economic or commercial reasonings. Further extension south of Khartoum was on economic grounds to serve the plantation in Gezira and export to Port Sudan. the first patch of finance was with a loan and part from the Egyptian government and repayment schedules was seen on Sudan Railway reports up to the seventies of last century. The last extensions constructed on strategic and social grounds were lines to Darfur in 1959 and to southern Sudan in 1962 and implemented with Railway manpower and equipment.

Sudan Railways has the autonomous of an independent status and owns the infrastructure and fleets and has financial independence and has no recourse to public funds. Its revenue covers not only running expenses but also development projects. care for development projects from its own resources. To help the railway secure more revenues, a law was introduced in 1934 prohibiting road constructions parallel to its line. That helping in securing fund for rehabilitation and new projects. By the 1970s that low was ignored and roads parallel to the railway were not parred from construction. Railway revenue decline partly by opened competition Then, If a line is not paying back its cost, it will not be approved for construction. This is why railway extensions did not go further and rehabilitation became shorter than needed.

The Roads in Sudan are classified into two main categories, highways under the authority of the central ministry of transport and provisional roads within each state in the country. Provincial road development is dealt with according to city expansion and traffic increase. Highways are subjected to detailed engineering and economic viabilities in regard to road user rather than to revenues and commercial standards. The case could be different when private sector comes into road investment and in the few BOT cases in Sudan the investor was given the right of use of lands parallel to the road for agriculture and commercial services.

Construction of roads on a a large size started in the 1970th with the construction of 1200 kms linking the capital to the Red Sea Port. The construction of the highway was almost paralleling the Eastern railway corridor, and with the long distance to be covered, the railway still holds on, as a strong competitor. The western road corridor between the port and the capital was built in 2005 and with 400 kms shorter than the old eastern corridor. This road had a higher advantage of being around 800 kms long and has a lower cost than the railway at the time of completion. The railway cannot compete on this link without introducing radical changes to its equipment and operation.

The unbalanced investment criteria strengthened road sector over the last 40 years and left the railway to lag behind. Roads take over 90% of cargo and more than that in passenger traffic and leave the railway with less than 10% of the of cargo and lower than that in passenger traffic. Behind these results investment funds for road sector borrowed from foreign sources were paid back to creditors by the central budget of Sudan. This facilitated funding from lending bodies in financing road projects. On the other side, funding railway projects has to be budgeted from the railway own resources or borrowed for payment back by the railway and by the central government as it is the case with roads. This is an imbalance in the funding national projects.

The country needs a better reorganization of the transport system. Each mode has its advantages and problems and a balance is needed. Investment criteria should have a logical balance to give each mode its appropriate share to achieve the most effective cost/benefit solution for the country present and future transport demands. The policy should be to develop the public infrastructure on similar basis. Rail tracks and highways should be recognized as infrastructures serving the same purpose and budgeted from the same public funds as far as new construction and rehabilitation need funding. Running cost and routine maintenance be taken care for from the railway revenues. A method of costing should be established to define financial relations between the government and the railway to provide appropriate ways for rail development.