Rwanda looks to Tanzania for rail transport as Uganda falters on SGR
Rwanda is in talks with Tanzania and Burundi for a shared standard gauge railway through the Central Corridor after it realised that Uganda was not prioritising the Kampala-Kigali connection that would have seen it transport its goods through Kenya.
Rwanda’s Infrastructure Permanent Secretary Christian Rwankunda is said to have held a series of meetings with senior officials from Tanzania and Burundi in Dar es Salaam last week to thrash out the details of the Central Corridor project. The meeting was with lands, legal and infrastructure officials drawn from Tanzania and Burundi.
These meetings followed another one in Arusha in March, of the joint technical monitoring committee, which was attended by infrastructure ministers from the three countries.
“The ministers commended the prevailing commitment among the three partner states to realise the implementation of the railway project and its importance to foster physical integration of transport modes, economic growth and improved social services in the sub region,” said a statement issued by the joint secretariat of the three countries. But it did not say much apart from their commitment to fast-track the project.
The three countries are said to be looking at mid next year as the starting time for the construction of the railway, with the tendering expected to start in the next two months.
On Monday, Jules Ndenga, Rwanda’s acting special projects implementation unit co-ordinator at the Ministry of Infrastructure, said the three countries were looking for a consultant to advise on the drafting of the tender documents for the railway deal.
“We had a joint technical monitoring committee meeting in Arusha, aimed at extending the contract for the transaction advisory services that had expired at the end of last year till the end of April. Thereafter, the three countries will get a consultant to advise on the documentation for this public private venture,” Mr Ndenga said.
Race to Juba
Uganda is keen to fund the construction of the Tororo-Gulu-Pakwach line ahead of the SGR connection with Kenya at Malaba because of the big economic interests the country has in South Sudan. This would delay the Kigali-Kampala line.
In 2014, Rift Valley Railways, the concessionaire for the Uganda-Kenya railway, completed the rehabilitation of the Tororo-Pakwach line, which has not been in use for the past 18 years.
'Coalition of the Willing'
In 2013, Rwanda, Uganda, Kenya and South Sudan initiated the Northern Corridor Integration Projects with a view to speeding up regional integration. Key projects under this initiative, which came to be referred to as the “Coalition of the Willing” included the SGR from Mombasa to Kampala, Kigali and Juba; and a common crude oil pipeline to serve the new oil discoveries in Kenya and Uganda, and the existing oil fields in South Sudan.
In addition to the infrastructure projects, the countries formed clusters to handle ICT, the oil refinery, political federation, Financing, power generation, commodity exchanges, human resource capacity building and land. Other clusters would handle immigration, trade, tourism, labour and services, the Single Customs Territory, Mutual Defence Co-operation, Mutual Peace and Security Co-operation and airspace management.
On infrastructure, Tanzania and Burundi formed the Central Corridor that also planned a railway project.
Uganda’s recent decision to use Tanzania’s Tanga port, and Rwanda’s plan for the Central Corridor are, therefore, off the Northern Corridor script.
It is understood that Rwanda now feels its interests are best served through the Tanzanian SGR due to its short distance and Uganda’s preference on the railway network to Juba over the Kigali-Kampala connection. It is, however, not clear if Rwanda would still have an interest in the Kigali-Kampala railway as an alternative.
Uganda’s Minister of Works and Transport John Byabagambi said the country was keen on working on the Kampala-Malaba link at the moment, then the connection to Juba through Pakwach because of the economic viability.
“We have funding issues for the railways line at the moment. If we had financing, we would have developed these three connections (including Kampala-Kigali) at the same time as a matter of priority,” Mr Byabagambi said.
'No economic case for SGR'
Meanwhile, a World Bank report casts doubt on the economic viability of the standard gauge railway projects being pursued by the region, noting that the investment could only to be justified if the new infrastructure could attract additional freight of 20-55 million tonnes per year.
The report produced in 2013 by the Africa transport unit at the World Bank titled The Economics of Rail Gauge in the East Africa Community shows that the volumes of the forecasts undertaken for the EAC railway master plan and Central line in Tanzania are unattainable over the medium to longer term.
“Based on these assumptions there is no economic or financial case for standard gauge in the EAC at this time. A refurbished metre gauge network would appear to be the most appropriate option in economic and financial terms, and could easily accommodate forecast traffic up to 2030, with lower investment requirements,” the report says.
The World Bank team said the rehabilitation of the existing railway network would see the region achieve an annual tonnage of 5.5 million, with the expected costs per kilometres sitting at $0.18 million per kilometres.
“However, the maximum speed achievable would be 80 kilometres per hour. The other alternative considered were refurbishing or upgrading the railway network to the same gauge, which would achieve speed limits of 120kph with an annual maximum load capacity of 60 million tonnes. This would cost the $0.49 million per kilometre.
“The third alternative the regional governments had was upgrading the network to standard gauge on the same alignment. This solution is more expensive up front, but there are cost savings through reduction in the amount of new land required. It would achieve a maximum speed limit of 130kph with a maximum load capacity of 60 million tonnes annually. This would cost $1.5 million per kilometre,” the report said.
The last alternative, which the regional governments chose, involves the construction of a standard gauge railway on a new right of way. The World Bank team said this option requires additional investment in land and structures, and new right-of-way construction.
“This alternative predicates axle loads in the order of 25 tonnes per axles and a maximum operating speed of up to 120kph. Again, based on these assumptions, the estimated maximum carrying capacity of the current network would exceed 60 million tonnes per year. The estimated investment cost per kilometre will be $3.25 million,” the report said.
Kenya has seen low freight volumes within the cargo business with Rift Valley Railways, the current rail operator, moving an average of 1.8 million tonnes out of the total 24.8 million tonnes handled at the port of Mombasa in 2014.
The region has also seen the tonnage freight volumes that are moving via rail continue to fall significantly over the years from 60 per cent of port cargo in the 1980s to an average of 5 per cent currently.