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transportation industry drc

The Transportation Industry in DRC 2016

Louise Mitchell | Democratic Republic of Congo | 25 August 2016

The Transportation Industry in DRC 2014

Carole Veitch | Democratic Republic of Congo | 19 May 2014

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Report Coverage

The detailed report on the Zambian transport sector discusses current conditions, describes investment into the sector and outlines factors influencing the success of the industry. The report profiles 24 companies including Airfast Congo and Malu Aviation which are both active in the air transport sector. Also profiled is the state-owned entity, SNCC (Société Nationale des Chemins de Fer du Congo), whose rail network is used extensively for copper exports, as well as TRANSCO (Transport au Congo) which provides passenger bus transport and charter services.

Introduction

The focus of this report is the transport industry in the Democratic Republic of the Congo (DRC) and covers land transport, which includes freight and passenger transport by road and rail, and transport by water and air. The DRC’s vast geography, low population density, extensive forestlands, and expansive network of rivers are factors that complicate the development of infrastructure networks. The DRC’s location traversing the regional transport corridors, the different cross-border water resources (lakes and rivers) and the presence of sites with great hydro power potential present major opportunities for infrastructure development and trade with all African regions.

Strengths

• Aircraft provide access to remote areas of the DRC, which would otherwise be inaccessible.
• CO2 emissions are low due to poor road and rail infrastructure and low economic activity.
• Donor money and institutions are supporting upgrades to transport infrastructure and are assisting government institutions to strengthen governance.
• Road rehabilitation and upgrades are a government priority and road access increased from 13% in 2006 to 45% in 2014.
• Strong economic growth in the last four years and a stable currency.
• The air transport industry is an economic enabler, supporting trade, business and tourism.
• Water transport is the biggest electricity consumer in the transport sector and it is considered a green mode of transport.

Weaknesses

• A weak regulatory framework is preventing successful PPPs.
• Competition in the rail transport sector is inhibited by state-owned institutions.
• Development of transport on waterways is receiving very little investment from government.
• Multimodal transport is not interconnected leaving certain geographical areas isolated.
• Old and outdated infrastructure.
• Operating and start-up costs in all the transport sectors are high preventing MSMEs to enter the market, inhibiting competition.
• Professionals in the aviation sector with the requisite expertise are scarce. There are very few institutions that offer technical training in the DRC.
• Regulatory supervision in the sector is inadequate.
• The aviation sector in the DRC has a poor safety record as a consequence of the dilapidated airport infrastructure, outdated technology and ageing aircraft, which are blacklisted in the EU.
• Water transport is badly regulated and unsafe, yet it is for many people the only transport mode.

Opportunities

• Competition in air transport will increase with the new state-owned airline that came into operation.
• Regional cooperation will strengthen transport corridors.

Threats

• An escalation in domestic political tensions preceding the pending national elections.
• Electricity supply shortages are impacting customers that produce goods to be transported.
• Low commodity prices are reducing exports and low projected economic growth rates will lead to contraction in manufacturing, mining and agricultural output, thereby reducing demand for freight transportation.

Outlook

Freight traffic is projected by PwC to grow annually at 8.2% to 2040 in SADC countries which will demand adequate infrastructure in road, rail, air and water. The potential for growth in the DRC’s transport infrastructure development is underlined by industry commentators and is dependent on the implementation of governance structures within state-owned transport operators and transport departments within government. It will assist in the combat against corruption and will encourage private and foreign investment in the sector. The DRC has the opportunity to enhance its contribution towards green transport by investing in transport on waterways. Government is set to continue with rehabilitation of the national and provincial road network and the railway network with the aid of donor institutions like the World Bank. Stakeholders in the air transport sector believe air safety must remain a focal issue and that public entities tasked with addressing infrastructure deficiencies and providing a safe operating environment for the air transport industry must be held accountable. Execution of the World Bank’s MTP will contribute towards an integrated transport network to support economic growth in the country. The national elections that was scheduled for the second half of 2016 are likely to be postponed to 2017. Observers are expecting civil unrest to prevail until after the elections. This may derail transport infrastructure development in the short term.

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The Transportation Industry in DRC
The Transportation Industry in DRC 2016

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

The Transportation Industry in DRC 2014-05-19

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
3. SIZE AND STRUCTURE OF THE INDUSTRY 3
3.1. Geographic Position 3
3.1.1. Water Transport 3
3.1.2. Road Transport 4
3.1.3. Rail Transport 6
3.1.4. Air Transport 8
3.2. Size of the Industry 9
4. STATE OF THE INDUSTRY 13
4.1. Local 13
4.1.1. Water Transport 14
4.1.2. Road Transport 15
4.1.3. Rail Transport 18
4.1.4. Air Transport 20
4.1.5. Investment in the Transport Sector 21
4.2. Corporate Actions 23
4.3. Regulations 24
4.4. Enterprise Development and Social Economic Development 26
4.5. Continental 27
4.6. International 29
5. INFLUENCING FACTORS 30
5.1. Regional Cooperation 30
5.2. Economic Environment 32
5.3. Government Initiatives 34
5.4. Private Sector Initiatives 35
5.5. Rising Operating Costs 35
5.6. Technology, Research and Development (R&D) and Innovation 36
5.7. Labour 36
5.8. Cyclicality 38
5.9. Environmental Concerns 39
5.10. Travel Safety 40
5.11. Electricity Supply Constraints 41
6. COMPETITION 42
6.1. Barriers to Entry 43
7. SWOT ANALYSIS 44
8. OUTLOOK 45
9. INDUSTRY ASSOCIATIONS 46
10. REFERENCES 47
10.1. Publications 47
10.2. Websites 48
COMPANY PROFILES - RAILWAY TRANSPORT 50
Societe Nationale de Chemins de Fer du Congo Sarl 50
COMPANY PROFILES – URBAN, SUBURBAN & INTER-URBAN BUS & COACH PASSENGER LINES 52
Transportation Company of Congo 52
COMPANY PROFILES – OTHER PASSENGER TRANSPORT, INCLUDING THE RENTING OF PASSENGER MOTOR VEHICLES WITH DRIVERS 54
Malabar International Ltd 54
COMPANY PROFILES – FREIGHT TRANSPORT BY ROAD 56
Bollore Transport & Logistics RDC SA 56
DSV A/S 58
Ghunaq Investments (Pty) Ltd 66
Hermis Transport Sprl 68
Lignes Maritimes Congolaises SA 69
M+R Spedag Group AG 70
Malabar International Ltd 72
Super Group Ltd 74
Trans-Inter Congo Sprl 77
COMPANY PROFILES – SEA AND COASTAL WATER TRANSPORT 78
Bollore Transport & Logistics RDC SA 78
Lignes Maritimes Congolaises SA 80
COMPANY PROFILES – INLAND WATER TRANSPORT 81
Marine Services Company Ltd 81
Societe Nationale de Chemins de Fer du Congo Sarl 83
Trans-Inter Congo Sprl 85
COMPANY PROFILES – AIR TRANSPORT 86
Air Cote d'Ivoire 86
Air Kasai Sprl 88
Airfast Congo Sprl 89
Compagnie Africaine d'Aviation 90
Congo Airways 92
Kenya Airways Ltd 93
Kin Avia Sprl 97
Malu Aviation 98
Services Air Group Inc 100
Swala Aviation 101
Trans Air Cargo Service (TACS) 102

Introduction

This report examines the aviation sector in Africa’s second largest country, the Democratic Republic of the Congo (DRC). Despite positive political and economic reforms that have been implemented over the past five years, the business environment in this resource-rich nation remains challenging. One of the factors constraining economic development is the state of the Congolese air transport industry. The country’s skies are considered to rank amongst the most dangerous in the world and all DRC-registered aircraft are black-listed in the European Union (EU). As part of the government’s strategy to improve aviation safety, a thorough audit of the country’s tarnished air transport sector is in the process of being conducted. On 11 April 2014 the Department of Transport and Communications confirmed that a new national air carrier, to be known as Congo Airways, would be operational before the end of 2014. According to Minister Justin Kalumba, “Congo Airways will be required to set the standard for the aviation sector and will serve as a benchmark, symbolising the rebirth of the nation as a whole”

Strengths

• Aircraft provide access to remote areas of the DRC, which would otherwise be inaccessible.
• The air transport industry is an economic enabler, supporting trade, business and tourism.

Weaknesses

• Operating costs are high.
• Professionals with the requisite expertise are scarce. There are very few institutions that offer technical training in the DRC. Furthermore, there are no private flying schools in the country.
• Regulatory supervision is inadequate, there is a lack of transparency and corruption is widespread.
• The aviation sector in the DRC has a poor safety record. This has been attributed to the country’s dilapidated airport infrastructure, outdated technology and ageing aircraft, which are blacklisted in the EU.

Opportunities

• Expansion of airlift in the country’s mining belt.
• Given its strategic location, the DRC has been identified as a potential air traffic hub for central sub-Saharan Africa.
• Meeting the leisure and business travel requirements of the growing middle-class.
• The establishment of flying schools and technical training institutions.
• The provision of aero-medical evacuation services.

Threats

• A commodity price crash.
• An escalation in domestic political tensions.
• Devaluation of the local currency.
• Heightened global geopolitical tensions, which could threaten aviation fuel supplies.
• The soaring jet fuel price, which, for most airlines, currently represents more than 30% of their total operating costs.

Outlook

The DRC’s aviation sector is currently navigating through a turbulent period, with thirteen local airlines having been grounded in the interest of air safety since January 2014. Stakeholders suggest that rigorous pruning of the air transport industry is long overdue and that robust action on the part of the Civil Aviation Authority is warranted, given the country’s abysmal safety record. They reiterate that if the aviation sector is to ‘take-off’ in the DRC, air safety must remain a focal issue and that public entities tasked with addressing infrastructure deficiencies and providing a safe operating environment for the air transport industry must be held accountable. Despite the considerable challenges facing the DRC, numerous analysts believe that the country will remain on a steady upward trajectory. As the Congolese economy continues to expand, demand for both domestic and intra-African passenger and cargo air transportation services is expected to increase. Role players in the industry warn that capacity expansion is imperative if anticipated demand is to be met. The future outlook for aviation in Africa remains positive, with Boeing predicting that air traffic on the continent will grow at a rate of more than 6% per annum over the next 16 years.

The Transportation Industry in DRC
The Transportation Industry in DRC 2014

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

The Transportation Industry in DRC 2016-08-25

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
1.1. Description of the Industry 1
1.2. Industry Supply Chain 1
2. SIZE AND STRUCTURE OF THE INDUSTRY 2
2.1. Geographic Position 2
2.2. Size of the Industry 3
3. STATE OF THE INDUSTRY 6
3.1. Local 6
3.1.1. General 6
3.1.2. Infrastructure Development 6
3.1.3. New Airlines 7
3.1.4. Corporate Actions 7
3.1.5. Regulations 7
3.2. Continental 8
3.2.1. Size 8
3.2.2. Current Trends 8
3.3. International 9
3.3.1. Size 9
3.3.2. Current Trends 9
4. INFLUENCING FACTORS 9
4.1. Political Environment and Conflict 9
4.2. Economic Environment 10
4.2.1. General 10
4.2.2. Effects on the Aviation Sector 10
4.3. Industry Specific Issues 11
4.3.1. Input Costs 11
4.3.2. Cyclicality 11
4.3.3. Air Safety and Security 11
4.3.4. Health Concerns 11
4.3.5. Labour Resources 12
4.4. Competition 12
4.4.1. Barriers to Entry 12
4.5. Information Technology 13
4.6. Technology, Research & Development (R&D) and Innovation 13
4.6.1. Technology 13
4.6.2. Research and Development (R&D) 13
4.6.3. Innovation 13
4.7. Environmental Concerns 14
5. SWOT ANALYSIS 14
6. OUTLOOK 14
7. INDUSTRY ASSOCIATIONS 15
8. REFERENCES 15
8.1.1. Publications 15
8.1.2. Websites 16