President Mwai Kibaki has called on East Africa Community member states to adopt public-private partnership to finance infrastructural development projects in the region.
Speaking on Thursday during the official opening of the 2nd EAC Heads of State Summit Retreat on Infrastructure and Financing in Nairobi, President Kibaki noted that the EA region needs to seek innovative financing solutions in order fund infrastructural projects.
Noting that there has been a major global shift towards new approaches of provision, operation and financing of infrastructure, the president said in the past the region significantly relied on conventional sources of funding infrastructural projects while ignoring the private sector.
President Kibaki who is the current chairman of the East African Community noted as part of the solution, capital markets have to be reformed and the required legal frame work put in place for the public-private partnerships to take root.
"My government has been approached by credible and serious investors who intend to construct major highways and other infrastructure provided the policy and legal frameworks are in place. Let us seize these opportunities," said the president.
Noting that infrastructure is an enabler that facilitates all other development objectives, President Kibaki said large proportion of resources will continually be invested in the sector.
The Head of State further noted that the ongoing retreat of EAC leaders will focus more on railways, ports and energy so as to give the projects and programmes in these sectors required strategic and political profiling.
President Kibaki said this will enhance mobilization of domestic resources as well as attract support from development partners and private sector.
On the transport sector, President Kibaki said efficiency in the sector will result in cost effectiveness and faster movement of goods and persons which will in turn increase economic activities.
"The enhancement of transport efficiency results in the reduction of transportation costs and the faster movement of goods and persons. This in turn increases economic activities and improves the socio-economic wellbeing of our people," said the president.
In this connection the president said there is need to invest heavily in rehabilitation and expansion of the rail systems in East Africa Community in order to enhance cheaper transportation of goods in the region.
The Head of State re-affirmed that transporting goods by rail is not only cheaper than using the road but will also prolong the life span of the newly constructed and rehabilitated roads in the region.
Noting that less than 5 percent of cargo in East Africa is moved by rail, the Head of State said that the road network will face major challenges with the volumes of goods expected to triple in the next 15 years.
He said that lack of adequate infrastructure is one of the biggest barriers to trade, industrialization and economic development of EAC.
The president at the same time noted that increased power production and interconnected power grids will facilitate the necessary industrial development in the region through the availability of reliable and cost effective power supply.
President Kibaki noted that tremendous progress has been made over the last five years in the road sub sector across the region which has received huge investments resulting to construction, expansion and rehabilitation.
The president added, "In addition, one-stop border posts are being implemented in various parts of the region to hasten the movement of goods and people across our borders."
In the port subsector, the Head of State observed that substantial investments mobilization efforts are ongoing for the Dar-es-Salaam and Mombasa Ports in particular to enhance the container handling capacity. Further efforts are underway to revitalize ports equipment.
Concerning the port of Mombasa, the President maintained that his government has just completed port dredging at a cost of Sh5.5 billion with the work on a second container terminal which will handle over one million Twenty Foot Equivalent Units being underway.
Regarding power, President Kibaki said that the current installed capacity in the region is only about 4,100 megawatts which needs to be increased significantly if the region is to achieve the industrialization and development goals set for the economies.
"On the other hand, increased power production and interconnected power grids facilitate the necessary industrial development of the region through the availability of reliable and cost effective power supply. This is a prerequisite for attracting foreign and domestic investment as well as sustaining local industries," the president said.
President Kibaki also noted that in the aviation and airports subsector, major airport rehabilitation works have been undertaken at the main International airports in the region.
He said such facilities include Nairobi, Dar-es-Salaam, Kigali, Zanzibar, Bujumbura, Entebbe and Kisumu airports have seen major investments in passenger terminals, hangars, runway improvements and air navigation enhancement technologies.
President Kibaki thanked all development partners and noted that EAC looks forward to working together in more infrastructure projects across the region.
In attendance at the retreat are EAC presidents Yoweri Kaguta Museveni of Uganda, Jakaya Kikwete of Tanzania and Pierre Nkurunziza of Burundi and the Prime Minister of Rwanda Dr Pierre Damien.