PRESS RELEASE

East African Community Secretariat, Arusha, Tanzania, 12 March 2010: The President of the United Republic of Tanzania His Excellency Jakaya Mrisho Kikwete has described rail networks as a lynchpin in regional integration and commended the World Bank, the African Development Bank (AfDB) and other development partners for the keen interest and dedication they have shown in infrastructure development in the East African Community.

The President and current Chair of the EAC Summit of Heads of State was opening a two-day regional conference on the East African railways system themed Revitalising the Railways for Enhanced Regional Integration and Economic Growth at the Mlimani City Conference Centre in Dar es Salaam Thursday 11 March.

HE Kikwete said the eastern and southern African countries had resolved to create a huge free trade area spanning from Alexandria to Cape Town, but without a reliable railway network, this ambition would be unattainable. “Our resolve to move to a single market will not succeed without a wider connectivity of the existing railway lines,” President Kikwete said.

The President noted that the East African Community needed over $20 billion to upgrade the railway network in the Partner States and boost trade, and indeed a robust railway would be crucial, especially once EAC merges with two other blocs i.e. the Southern African Development Community and the Common Market for Eastern and Southern Africa. Therefore the need for seamless interconnectivity of the railway systems of the regional blocs that should be addressed in tandem with the rehabilitation and upgrading infrastructure projects.

The President challenged participants to generate ideas and come up with pertinent proposals on how to modernise the railroads to the standard gauge instead of the narrow gauge which limits the freight carrying capacity.

In view of the envisaged investment and colossal capital outlay, the Chair of the EAC Heads of State Summit called upon the private sector operators to play their part alongside Partner States’ governments. He noted that the absence of effective participation of the private sector was a matter of concern.

The President noted that the railways in the region had suffered years of mismanagement and underinvestment by government, leaving them dilapidated, inefficient and costly to run. “But private businesses have a role in future investment projects and are capable to fill the gap in financing railway development in the region,” the President noted.

President Kikwete  urged the participants to give serious thought to the issue of concessioning, remarking: “We have been going through difficulties in the management of our railways because of concessioning and therefore this conference will be of immense value if you come up with workable solutions on this matter.”

According to the East African Railways Master Plan, upgrading the region's network is expected to cost up to $35.5 billion, of which 75 percent would have to be financed by the public sector.

The report indicates that traffic on the existing network i.e. Kenya and Uganda's Rift Valley Railways, Tanzania Railways and Tanzania-Zambia Railways had the potential to rise to up to 21 million tonnes by 2030 from 3.7 million tonnes in 2007.

The Director of Infrastructure at the African Development Bank (AfDB), Mr. Gilbert Mbesherubusa said rail transport was far more cost effective for long distance transport compared to road transport, but the rail transport potential of the region has not been fully mobilised.

Mr. Mbesherubusa said AfDB was a strong partner for the EAC in the infrastructure development for greater competitiveness and enhanced trade and that special emphasis shall continue to be put on opening up landlocked regions through the continued development of the existing Northern and Central Corridors, while identifying and extending new corridors into Sudan, Ethiopia and potentially to DRC.

Mr. Mbesherubusa also disclosed that AfDB had over the last three years alone committed close to US$ 1 billion to regional projects in eastern Africa in the transport, power, agriculture and governance sectors.

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