PUBLISHED ON November 20th, 2014

Back on track

It remains to be seen, however, who will win the race to develop effective new rail linkage into their respective hinterlands including to the landlocked countries that lie beyond their borders.

In East Africa freight volumes moved by rail have been in decline since the 1970s and 1980s, reducing from a level of around 60% of port throughput to single digit figures currently for both the ports of Mombasa and Dar es Salaam, the major ports of Kenya and Tanzania respectively.

New efforts are, however, now being made to upgrade rail systems in conjunction with the Northern Corridor that runs from Mombasa and the Central Corridor from Dar es Salaam.

The Northern Corridor connects the port of Mombasa via Nairobi to Uganda, Rwanda, Burundi and Ituri province in the Democratic Republic of the Congo (DRC). The Central Corridor connects the port of Dar es Salaam with Uganda, Burundi, DRC, Rwanda and South Sudan.

Funding has been agreed in the case of both Kenya and Tanzania for real progress to be made in shifting large volumes of freight back on to rail. China is funding the first 450-kilometre (280 mile) section of the new standard gauge rail system running from Mombasa to Nairobi, with the cost of this put at $5.2bn.

Completion is scheduled for 2017 with an onward link to Uganda, providing connections to Rwanda and South Sudan, estimated to raise the total financing requirement to around $13.8bn. Financing for this second stage development is yet to be concluded.

This new rail system will replace the old British colonial narrow gauge rail system and is estimated to cut the journey time of freight trains from the port of Mombasa to Nairobi from 36 hours to just eight hours, as well as achieve a reduction in freight costs of up to 60%.

The old narrow gauge railway, originally known as the ‘Lunatic Express’ due to the huge challenge involved in building it, only runs as far as Kampala, Uganda, whereas another major advantage of the new system, when fully developed, it is that it will have a much greater coverage of the extended hinterland.

Funding fix
Funding for the upgrade of Tanzania’s railway infrastructure has been arranged with the World Bank to the tune of $300m. The project, which will be implemented by the Tanzania Railways Corporation, will take place along the Dar es Salaam-Isaka section of the East African Central Corridor. It specifically aims to take the pressure off the port of Dar es Salaam, facilitate the movement of goods to and from the surrounding landlocked countries, and generally spur the Tanzanian economy.

Included in the plan for the Central Corridor rail system development is the acquisition of rolling stock specifically designed to service two weekly container services between Dar es Salaam and Isaka. The service frequency is planned to increase to four weekly services in 2019.

In excess of $10m is also scheduled to be invested in the Isaka and Ilala terminals and Dar es Salaam Port Platform to provide modern intermodal facilities for efficient container transfer. Customs service will also be re-established at the Isaka facility after upgrade to facilitate the clearance of custom bonded containers.

Also representing a positive step for Tanzania, a Memorandum of Understanding has recently been signed between the Tanzania Ports Authority, Ministry of Transport and World Bank, UK’s Department for International Development with Trade Mark East Africa has for a $565m financing for Dar es Salaam port expansion and modernisation.

The funding is for Phase One of Dar port’s expansion plan, which will also include over $700m funding in Phase Two. The funding will be used to increase port capacity from the 14.6m tonnes handled in fiscal year 2013/14 to 28m tonnes by 2020.

Source: Port Strategy

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.