Simandou Project: Market Sounding for Railway Operator

More specifically, SYSTRA Canada completed the following activities:

• Summary of the Railway Project and Options. From the Phase 1 assignment, review and synthesize the fundamentals of the Railway component of the Simandou Project to define specifically the key assumptions needed by the potential operating partner(s) (users, locations, alignment, distance, volumes, train consist, frequencies, cycle times, etc.).
• Review of Partnership Models and Experiences. Review of most critical lessons learned from mining railway long-term capital-operating partnerships in similar contexts with enough historic background and identification of key principles of forms of agreements such as duration, respective roles, qualities and commitments of stakeholders in terms of project financing, infra/rolling stock ownership and maintenance and railway operations, success factors, risk management and mitigation, etc.
• Review of Simandou Project Previous Business Models. Analysis of costs, business/financing organizations, tariff structure and financial pro forma that were studied previously for the Simandou Project to identify issues that may rise in defining partnership structure and searching for operating partners.
• Economic-Contractual Guidelines/Scenarios. Define the expected specific roles of the different stakeholders (users, operator, etc.) within a contractual partnership as for project capital financing, infrastructure ownership, maintenance of way, locomotive and wagon provider, locomotive and wagon maintenance, railway operations, cost sharing or tariff structure, risk and responsibility provisions, etc. From the different combinations of role allocations for each item recommend the most suitable contractual scenarios, including Key Performance Indicators (technical, organizational, economic, HSE, others).

• Definition of the Partner’s Role and Required Qualities. Suggest the key drivers in the selection of an operating partner, including similar experience, financial stability, experience with Chinese rail design, West Africa, commitment level, etc. Will require validation of these ‘must have’ by RT.
• Identification of Potential Partners. Draw a raw list of railway operators from previous experiences and projects, screen the list by a high-level assessment, retaining (upon agreement with RT) those who seem to better fit to the partnership requirements and exclude those who seem not to meet the minimal requirements. Identification of contact official for each operator to be interviewed.
• Development of Information Package and Questionnaire. Using existing information, prepare the documents to be sent to rail operating firms to be surveyed, including the questionnaire focusing on enablers and barriers to the participation to the project. To be validated by RT before issuance.
• Consultation/Survey. Contact persons to be surveyed. Get RT-compliant nondisclosure agreement executed by targeted potential operators. Send information package and questionnaire and follow-up the responses with contact officials. Conduct interviews (virtual or in person when reasonably feasible) with RT representatives.
• Survey Results. Complete data sheets for each surveyed operator and fill in the database. Highlight the key elements making the relevance and interest of the different potential operating partner that might be involved in a partnership in the Simandou Project (enablers and barriers).
• Recommendations and Report. Draw main recommendations related to operating partnership structure options and potential operating partners. Prepare a short report that summarizes findings with technical appendices.