Mzansi Rail Shuttle

Business Context

Most of the major cities in Africa are served by railway lines that were established by the colonial masters many years back (Gewald, Leliveld & Peša 2012). Frequently, the railway lines serve many cities eventually leading to a port. Thus, only the cities in the rail line benefit from the movement of goods and services along the railway line. Cities that are located in the interior regions with no access to the railway lines lag behind from the trade and economic growth perspective (Gewald, Leliveld & Peša 2012). Therefore, there is a need to come up with railway lines that will serve a bigger region in Africa. This will enable the countries to reap the benefits that arise from an efficient transportation of goods and services.

Currently, the railway networks in Africa are region specific. This means that trains cannot operate in countries outside their areas. However, this fact poses a major setback to businesses operating in the region. The international monetary fund indicated that intracontinental trade taking place within the continent accounts for a mere 10 percent (Gewald, Leliveld & Peša 2012). The rest of the trade is taking place between Africa and overseas countries. From a business perspective, this fact increases the cost at which a country in Africa obtains goods. For instance, a product imported from the United Arab Emirates to South Africa would cost more as compared to a similar product purchased from a country in Africa. The railway would enable the transportation of resources for the production of business items and thus the countries would be able to increase revenue, which would eventually reduce poverty and food insecurity (Gewald, Leliveld & Peša 2012).

Furthermore, until recently, South Africa had been the major economy in Africa (Gewald, Leliveld & Peša 2012). Nevertheless, it has been overtaken by Egypt and Nigeria, which are located in the northern part of the continent. The north of the continent has already embraced an efficient railway scheme that has facilitated trade (Gewald, Leliveld & Peša 2012). Thus, South Africa needs to connect with countries in East Africa that are rich in resources in a bid to reclaim its position as the dominant economy in Africa. The above considerations served as a primary incentive for the Mzansi Rail Shuttle project, which entails building a new railway connecting Tanzania and South Africa that would be faster and safer as compared to the current rail, which is outdated and slow. Thus, this paper discusses the scope of the work within the framework of the project, the strategic drivers for the project, its major stakeholders as well as the structures and methods that could be used for the management of the project.

Scope of the Work

The project has the task of building a railway from Tanzania to South Africa by 2019. The scope will involve technical and managerial tasks. The allocated budget for this project is two hundred and three billion dollars that were provided by global joint ventures. There are two optional routes for the new railway in this project – the Harare rout and the Bulawayo route. Even though the Harare route is shorter than Bulawayo, it does not meet the safety guidelines. Widening of the tracks along the Harare route is required. Despite the additional cost and time that will accompany this, the safety of the passengers will be enforced. Failure to perform this will compromise the quality of the railway line constructed by the project, and hence, the countries would not reap the benefits of an efficient railway. Therefore, ASyS should insist on making the adjustments on this route. Alternatively, the project should consider using the Bulawayo route, even though it is longer.

Work Breakdown Structure

Strategic Drivers

Customer Needs

There has been an increasing demand in the countries of South and East Africa for obtaining products and services at cheaper prices. As the region is opening up to the global market, individuals and organizations have evolved to require resources that are not available in their countries. These resources can however be obtained in the neighboring countries. The road network has not been sufficient to transport all these resources, as it has disadvantages such as a limited capacity and insecurity. As a result, there has been an increasing demand in the region for a transport network that would guarantee safety of the goods. Thus, a need emerged for a transport scheme that would address the needs outlined above.

New Technology

Advanced technologies have provided new ways to improve railway systems. For instance, the tilting train technology from Japan allows to increase the speed on normal rail tracks (Gewald, Leliveld & Peša 2012). Often, as a train makes a curve at a great speed, the objects inside the train are exposed to inertia. This can make packages glide about or passengers feel compressed by the external armrest due to the centripetal force. Nevertheless, tilting trains are designed to counteract this discomfort. Furthermore, the technology permits the development of trains that are quick. The project can reap the benefits of this advanced technology to attain an efficient, safe, and fast railway system.

New Markets

There is a growing need for an extended infrastructure in Africa. This is because the region is opening up to globalization. Thus, the governments in this region are in search of efficient infrastructure schemes that will allow fast movement of goods and passengers, which will eventually facilitate trade and improve economic growth. A fast railway scheme offers a perfect way for the governments in the region to obtain an improved infrastructure.

Profit

The initial cost of the project would be high, but the expected rate of return of the project would also be high. AUM ventures, a conglomerate that provides part of the needed capital, has a loan guarantee from the government of South Africa. Moreover, negotiations between the government and the major funders regarding the concession to operate the railway for 75 years to obtain a return on investment are in progress. This period will ensure that the funders of the project get sufficient profits. To reap the benefits, the design of the railway should be efficient to avoid regular repairs that will incur additional cost. Moreover, the project needs to completed in time so that the anticipated benefits of increased efficiency and trade can be obtained (Project Management Institute 2013).

Change

The changing needs of the businesses in the region initiated a scenario where they require raw materials promptly. Thus, the majority of the businesses would be willing to employ the services of the project as it would enhance their supply chain management. The current railway system in South Africa is slow and inefficient. The goods transported by rail take a long time before reaching the destination. Hence, there was a need a system that would allow for fast movement of goods and services within the region. The implementation of the project will give rise to new opportunities for businesses operating in the region. Manufacturing industries in South Africa will now acquire raw materials at cheaper prices since they will be obtained from Tanzania, Malawi, and Zimbabwe through the railway. As a result, the final cost of the processed goods will be lowered, and many consumers will afford the products. Thus, the intra-trade taking place within the region will increase and the economy will improve. It is anticipated that the project will induce the intracontinental trade to grow by double digits.

Opportunities and Risks

Nevertheless, there are various risks that the project may face. The negotiations are taking place between the funders and the current government of South Africa regarding the operation of the railway. However, this dynamic may change when a new government comes in place, which may fail to honor the negotiations that are intended to give AUM and Sandline control of the railway for the indicated period of seventy-five years. Thus, the funders of the project would fail to obtain a return on their investment. This scenario would also pose a threat to the country since other investors may shy off from investing in the region when they see that the government does not honor the agreements with investors (Project Management Institute 2013). Furthermore, adverse economic events like a financial crisis may occur before the project is completed. As a result, the cost of supplied materials would rise, and the current budget would fail to meet all the needs. Further, the funders obtained the money from banks. When a financial crunch occurs, the interest rates would rise. This means that the investors would be required to pay a higher amount of money than they anticipated when they decided to fund the project.

Major Stakeholders

The South African Government

The government of South Africa is the primary stakeholder. This is because it is the entity that will give the project a go-ahead. The project will seek the permission of the government, which would then endorse the project (Atesmen 2008). The endorsement by the government will help prioritize the needs of the Mzansi Rail Shuttle project over other engineering projects that may be taking place within the area. The overall success of the project will be determined by evaluating the efficiency of the railway in terms of speed and safety.
Furthermore, the government will provide a sufficient amount of capital for the project and enforce regulations that will ensure the investors get a return on their investment. This money may be obtained from international loans and other public credit tools (Project Management Institute 2013). Since the government can access a massive amount of funding, it will be very instrumental in providing the funds required to complete the project. For instance, it is the government that will enforce the negotiations regarding the operations of the railway for a period of seventy-five years. This is because the investors will require to operate the railway for this time to obtain a return on their investment.

Sandline Ventures

This conglomerate is an association of six Emerati banks headed by the Abu Dhabi bank. It will provide the bigger portion of the money needed for the implementation of the project. Therefore, the multinational will have a bigger say in financial matters of the project. For instance, Sandline may determine where the required equipment will be purchased, and where expertise will be outsourced. This international organization does not have restrictions on the amount of funds, as it is an association of six banks. Therefore, its actions are not controlled by an external party that has supplied the funds (Atesmen 2008). This stakeholder would determine success or failure of the project by the timely allocation of funds. When it delivers the funds on time, the contractors would purchase all the required materials and equipment, and thus the project would have a high chance of success.

AUM

This stakeholder is a joint American and Canada multinational that provides funding and financial management to projects. It will be tasked with managing the money obtained from the South African government. AUM has secured funding from external sources in Russia and China. Thus, the actions of this conglomerate are supervised and controlled by these sources. AUM can determine the success of the project by effectively managing the financial resources of the South African government and the external sources. This outcome would be attained by spending wisely on the acquisitions of products required and paying the contracted companies (Morris 2013).

Emarteec

This is a construction company based in Emerati that has been contracted by AUM and Sandline ventures that have funded the project. It will be responsible for all the technical operations (Atesmen 2008). This stakeholder will advise the project on the current technologies that have to be implemented. Thus, it has a significant impact on the success of the project. For instance, if the construction company employs the tilting train technology that ensures safety of passengers and a higher speed, the project will achieve huge success.

NKA-D

This is a joint venture of Nzuzo Khumalo firm and Dangote enterprise that offers consultancy services on engineering projects. It will offer the construction company advice on how to implement the engineering tasks. For instance, it will advise on suppliers that have quality equipment that can be used in building the railway. This advice is significant, since it will determine the type of equipment that will be used for the construction processes. It will also provide guidelines on design specifications (Project Management Institute 2013). The company will also offer advice on the current trends in engineering project management like the management of resources.

ASyS

Anglo Synergy Solutions is a consultancy firm that provides cost-effective strategies to projects. It will provide information on strategies that can be used to ensure that the project is completed within the allocated budget. Thus, the ASyS will advise AUM on managing the financial resources. The advice will help the project to be completed within the specified time with no requirement of extra resources.

ICBC

This organization will provide part of the funds for AUM. Thus, it will supervise the financial activities conducted by the organization. Timely allocation of the funds will ensure that the project is on the right track and is completed on time. Nevertheless, when the group delays in providing the funds, the project will take longer to complete and thus be more expensive.

Sberbank

This establishment will also provide part of the funds for AUM. Thus, it will oversee the financial activities conducted by the organization. Convenient allocation of the funds will ensure that the project is on the right track and is completed on time.

Stakeholder Analysis

The South African government, Sandline, and AUM have a high interest and power in the project. They also have a leading involvement in the project. This is because the government will benefit considerably when the railway is in operation. ASyS, Emaartec, NKA-D, ICBC and Sberbank all have a medium power and high interest in the project.

Contractual Agreements

The agreement between the parties will be enforced by contracts. The agreement between AUM and the government for operating the railway for a period of seventy-five years will be written down in a contract. This will prevent an instance where a future government will dishonor the contract and give the operations of the railway to another organization. All the contracted parties will sign a contract of completing their tasks on time after accessing the funds. This will help to prevent delays in the implementation of the project.

Project Network

Critical Path

The project network comprises fifteen activities and is anticipated to last for twenty-one days. Nevertheless, the critical path comprises seven activities and is expected to last for approximately sixteen days. The risk factors of the project comprise time, human resources, environmental conditions, and cost. These risk factors may cause delays that will result in increased cost. Also, tilting the wagon sensors in the Bulawayo route may increase the project cost by approximately 1.3 billion dollars. For instance, if the human resources available do not have the sufficient skills to conduct the operations, a lot of time would be spent for supervision, which would cause delays. Unfavorable environmental and weather conditions may also halt the construction of the project, since they would prevent the contractors from laying the tracks. This would in turn cause delays and increase the cost of implementing the project.

Management of the Project

ASyS will have to come up with a transit authority team that would be responsible for managing the project. This team would share the tasks and report to the team leader. The leader will then convey the progress made on the project to all the stakeholders involved. The information will comprise all the progress and setbacks made by the stakeholders. The communication among the project members would be improved by having a real-time system that updates all the members of the progress or setback immediately. This move would help in ensuring that all the decisions are made in a collaborative manner between all the project members.

ASyS should instigate a team that would evaluates the progress of the project before it is completed. After the completion of a subtask by the contracted stakeholders, the team will evaluate the task and offer recommendations on whether the task was performed effectively. This would help to identify the areas that do not conform to the set standards of the project.

Conclusion

The project was necessitated by the evolving business needs of the region. The industries in the region required raw materials that could be transported by an efficient railway line. The tilting train technology provided an excellent way for the project to attain the objective of a fast and safe transporting scheme. The successful implementation of the project involves collaboration amongst all the stakeholders. Each of them is supposed to play their part efficiently for the project to achieve its objectives.