26 November 2012

Rwanda: Govt Plans to Develop Foreign Land Hits a Snag

A plan to develop inland ports in Mombasa, Isaka and Djibouti is not expected soon as government's efforts to recover the plots of land offered to it by the respective governments hit a snag.

The inland ports and a dry port are crucial to a landlocked country like Rwanda to improve service rendered to the importers and exporters. The country imports goods worth over $1.2 billion, or 25 per cent of the country's Gross Domestic Product (GDP) annually.

In an interview with Ephraim Karangwa, responsible governments are still in negotiations to hand over the parcels of land to Rwanda.

These include the 17.5h plot of land Isaka (Tanzania), 12.8 hectares parcel in Mombasa and a 20 hactare parcel in Djibouti which are supposed to be developed into warehouses, inland container depots, container freight, clearing services and parking yard.

Previously, government projected to have the Isaka plot as a dry port, a decision which was later dropped as feasibility studies conducted proved not viable due to a projected railway line.

The Isaka dry port was preferred as it is near Rwanda and commonly used by the Rwandan business community. Isaka is located 485kms away from Kigali and 982 kms away from Dar es Salaam. It is estimated that importers pay $5,500 per 27 tonne of cargo truck including transit clearance while the Mombasa port charges $6,000 on the same cargo for a period of two weeks.

The plots were given to Rwanda in 1986 and when government failed to develop them, Isaka and Mombasa plots were occupied by local citizens and the process to expropriate them delayed.

The embassies of Kenya and Tanzania and Rwandan's ministries of Foreign Affairs and Infrastructure are however following up on the process of expropriating the citizens and fencing the plot in Isaka.

"For the Mombasa plot, we had even paid arrears of land taxes to the tune Rwf43 million up to 2011, and we hope government efforts are not futile," Karangwa said.

For the 20 hectares of land set aside in Djibouti, the plot developed into a mangrove forest and government decided to protect it as a national treasure but agreed to replace it with another 40 hectare piece of land but awaiting presidential decree.

The Private Sector Federation, Ministry of Trade and Industry and TradeMark East Africa, are developing a business plan so that when government recovers the plots of land, it will be ready to develop them.

Stakeholders are optimistic that once the dry ports are developed, import prices will go down.

The process to develop a business plan is at advanced stages with an open tender to recruit a consultant. The plots are still in government hands and will be handed over to the private sector for development.

Rwanda Trade Hub composed of Magerwa, a national logistics firm and PSF; intends to attract more investors on board to mobilise resources to develop the plots.

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