Arusha, Tanzania — The Indian Trust Fund and the New Partnership for African Development (NEPAD) have given East African Community (EAC) railway sector enhancement project a total of $1.8 grant aimed at lowering transport costs in the region.
The total amount anticipated to be given to the EAC is $1.8m but what they signed is part of the $1.8m which is $428,000.
The grant agreements were signed on June 1 by EAC Secretary General Amb. Dr. Richard Sezibera and the African Development Bank (AfDB) regional director for the East Africa Resource Centre (EARC) Gabriel Negatu.
This was one the side events to the just ended African Development Bank (AfDB) annual general meetings in Arusha, Tanzania.
Mr. Negatu said that the backbone of formal intra-EAC trade are two overland road and rail routes, the Northern and Central corridor starting from the ports of Mombasa and Dar es Salaam and reaching to the border of DRCongo.
This is along with a north-south road link through Namanga on the Kenya-Tanzania border.
"These corridors are critical for transit of EAC's imports from outside and its goods exports beyond the region," he said.
He said therefore the objective of the project is to improve efficiency and modernize the railway sector in the EAC.
"The project will commence in June 2012 and end in June 2014 with the anticipated budget of $1.8m which is composed of harmonization of the regulatory and legal framework, pre-feasibility and feasibility of missing railway links and the creation of a regional coordination unit," he explained.
He said the study will allow member states of the EAC to develop and improve efficiency of the railway sector as the whole transportation sector is characterized by very high road transport costs of bulk goods by trucks which impedes trade and inflate prices.
'Further we have seen serious adverse impacts in the form of deterioration of roads and air pollution, when the project is completed, it will enable a large scale shift of the transportation modalities of long-haul bulk goods from roads to the less costly railways," he said.
He added that lowering transportation costs and improving efficiency will significantly contribute to increased economic growth, enhanced trade and improved quality of life for the 133m people by reducing costs of goods and services.
Sezibera said the fund will help the secretariat to unpack the EA Railways master plan for priority projects to better coordinate with the Dar-Isaka-Kigali/Keza-Musongati railways project.
It will also help EAC to undertake a feasibility assessment towards the eventual establishment of the EAC Railways Authority.
He said railways currently are contributing hardly 10% of the required transportation capacity for heavy and bulky freight despite attempts at concession the network.
"This situation is causing heavy stress and shortened lifespan for the EAC roads with implications on maintenance and faster reconstructions," he said.