From road dependence to railway optimisation: Assessing the economic viability and optimal configuration of freight railway rehabilitation in the Congolese section of the Lobito Corridor

Details

Supervisors

Agrell, Per Joakim

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

The Democratic Republic of Congo occupies a strategic position within the global mineral supply chain due to its possession of some of the world’s largest reserves of copper and cobalt, two essential resources for global development and energy transition. However, despite this advantage, the country’s logistics system remains characterised by severe infrastructural inefficiencies and dependence on road freight transport. This situation persists despite extensive transport economics literature identifying rail transport as the most efficient solution for high-volume inland transport over long distances such as those associated with the DRC’s mineral exports. As a result, the Congolese section of the Lobito Railway Corridor, connecting DRC’s mining region to the Angolan railway network and the port of Lobito, represents a potentially strategic infrastructure asset for the country’s future export performance. The objective of this thesis is to assess the financial viability and optimal configuration of a railway rehabilitation project between Kolwezi and the Angolan border, which could create a viable and more efficient alternative to the current road-dominated logistics structure. To address this objective, this study develops a deterministic Mixed-Integer Linear Programming optimisation model integrating infrastructure decisions, evolving transport demand and railway operational constraints adapted to the Congolese context over a 30-year period. The model’s results show that the project is financially viable under the baseline scenario and indicate that the optimal solution consists of a single-track railway configuration supported by a progressive terminal expansion and a staged fleet investment. Under these baseline conditions, the project generates a global net present value of $545 million, reaching its break-even point after 14 years and achieving a 15.4% IRR. Further sensitivity analyses show the project’s dependence on sufficient demand, gross margins, transport capacity and construction costs. Additional scenario analysis further highlights the project’s resilience, although adverse market conditions affect its long-term profitability. Beyond the specific Congolese context, this thesis contributes to the literature by proposing an optimisation framework adapted to low-infrastructure environments while providing practical insights into the strategic challenges associated with large infrastructure investments in developing countries.