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East Africa needs $20b for railways

By | March 13th 2010 at 00:00:00 GMT +0300

By Fumbuka Ng’wanakalala

The East African Community (EAC) needs some $20 billion to upgrade the railway network in its five member countries and boost trade, Tanzania’s President Jakaya Kikwete said on Thursday.

EAC has a combined Gross Domestic Product of $73.3 billion and a population of about 127 million. It has a customs union, and a common market to take effect in July. But the region has to contend with poor railway transport and most cargo going to and from the ports of Dar es Salaam in Tanzania and Kenya’s Mombasa to landlocked neighbours Uganda, Burundi and Rwanda has to move by road which is more costly.

"The resolve to move to a single market will not succeed without railway connectivity. Some $20 billion is needed to modernise the existing network," Kikwete told a meeting on how to revamp the EAC’s railways.

Free Trade Area

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He said a robust railway would be crucial, especially once EAC merged with two other blocs —

Southern African Development Community and Common Market for Eastern and Southern Africa. "We’re going to create a huge free trade area from Alexandria to Cape Town ... But without a reliable railway network, accessing this huge market will not be possible," Kikwete said. East Africa’s railways have suffered years of mismanagement and underinvestment by government, leaving them dilapidated, inefficient and costly to run.

Mr Kikwete said private business had a role in future investment projects on the bloc’s infrastructure. "The private sector is capable of filling the gap in financing railway development in the region. And it should participate." According to the East African Railways Master Plan seen by Reuters, upgrading the region’s network could cost up to $35.5 billion, of which 75 per cent will be financed by the public sector.

The report said traffic on the existing

network — Kenya and Uganda’s

Rift Valley Railways, Tanzania Railways

and Tanzania-Zambia Railways

had the potential to rise to up to 21

million tonnes by 2030 from 3.7 million

tonnes in 2007.

— Reuters

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