NEPAD-IPP Facility and Indian Trust Fund Join Forces to Enhance Railway Sector in Eac Region

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The railways sector development project in the East African Community (EAC) region was at the center of discussions during the Bank's 2012 Annual Meetings in Arusha, Tanzania.

A joint funding grant accord was signed on June 1, between the EAC, the Indian Trust Fund and the NEPAD-Infrastructure Preparation Project Facility, to modernize and improve the railway sector in the region.

Under the agreement, the EAC railway project will start in June 2012 and end in 2014, with a US$ 1.8-million budget for harmonization of regulatory and legal framework, prefeasibility and feasibility appraisal of railway links as well as the creation of a regional Railway Coordination Unit. The Indian government has provided USD 428.000 funding for the first tranche of the project.

The EAC Secretary General, Richard Sezibera, a signatory of the protocol accord, thanked the Bank for its financial and technical contributions. He said: "Under infrastructure, including energy the AfDB has been the main partner in the development of the region's current master plans."

For his part, the AfDB East Africa Regional Resource Center Director, Gabriel Negatu, recognized the potential for railways transport in the region. He noted that poor physical condition of the state-run transport and communications infrastructure is an acute constraint for producers, traders and transporters of goods in the EAC region. He said the Bank would continue to strongly support regional integration in the region through infrastructure, but also through increased emphasis on trade and transport facilitation, improvements to the regulatory environment and capacity building.

"Many other partners have expressed strong interest to work with the Bank in the implementation of the Regional integration strategy paper," he observed.

Sharing his country's experience in Africa through the AfDB, the Joint Secretary for Multilateral Institutions in the Indian Ministry of Finance, Venu Rajamony, said his country's goal is to build capacity in Africa. "This particular assistance is the first in the railway sector and also the first to a regional community," he explained.

When completed, the project will contribute to lowering the transportation costs in the region and will enable a large scale shift of the transportation modalities of long-haul bulk goods from roads to less costly railway. It will significantly contribute to increased economic growth, enhanced trade and improved quality of life for 133 million people living in the region by reducing the cost of goods and services.

The NEPAD-IPP Facility and the Indian Trust Fund are hosted by the African Development Bank.

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