Rwanda, Uganda kick-start regional railway project
May 15, 2014
The governments of Rwanda and Uganda are working closely to procure the consultancy for the feasibility studies and fund mobilisation for the Standard Gauge Railway (SGR) project set to run from Mombasa to Kigali through Uganda.
The governments of Rwanda and Uganda are working closely to procure the consultancy for the feasibility studies and fund mobilisation for the Standard Gauge Railway (SGR) project set to run from Mombasa to Kigali through Uganda.
The studies will precede the preliminary designs for the railway.
Monique Mukaruliza, the national coordinator of the Tripartite Initiative, said the two countries will jointly procure consultancy services for the Kampala-Kigali section that is expected to go through Mirama Hills, Rwanda’s New Times has reported.
“Rwanda is jointly working with Uganda in the feasibility studies and fund mobilisation to ensure the project becomes a success,” Mukaruliza said.
Mukaruliza said the ministers of finance of the two countries had been directed to explore financing options.
“For the financing of the SGR project, the Summit of Heads of State directed the ministers of finance to explore financing for the project using both the African Development Bank (Africa 50) and the China Exim Bank approaches,” she said.
Rwanda, Kenya and Uganda signed an MoU with the African Development Bank/Africa50 on the financing modalities of the project in February 2014 in Kampala.
The MoU aimed at making the project bankable where parties shall work together for the development, structuring, costing, financing, construction and operation of the railway estimated to cover nearly 3000km.
The Northern Corridor Transit and Transport Coordination Authority report released earlier this month indicated that the government of Rwanda had secured funds to finance the preliminary designs of the section from Mirama Hills to Kigali.
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Ugandan President Yoweri Kaguta Museveni, Kenyan President Uhuru Kenyatta and Rwanda President Paul Kagame after thUganda's President Yoweri Museveni (L), Rwanda's President Paul Kagame (2nd R) and their host Kenya's President Uhuru Kenyatta (L) attend the commissioning of a new berth at a port in the coastal town of Mombasa August 28, 2013. REUTERS
Over the weekend, President Paul Kagame joined East African counterparts involved in the project, Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda and Salva Kiir of South Sudan in signing a deal with the Chinese Prime Minister, Li Keqiang, on the financing of the first phase of the project (Mombasa-Nairobi).
The first phase of the project is expected to cost $3.7 billion (Rwf2.6 trillion) with China expected to fund 90 per cent of the project while the other 10 per cent will be provided by the Kenyan government.
The standard gauge railway is aimed at providing efficient and cost effective rail transport for both freight and passengers across the region.
It is intended to reduce the cost of doing business by reducing the cost of transport, a move that could turn the East African region into a competitive business hub.
Businesses in the region, especially importers, and exporters are already upbeat about the project, saying it will help improve their efficiency and reduce the cost of doing business.
“We expect the cost of exports to reduce and this will significantly increase the price of Rwandan coffee on the international market,” Pierre Munyura, the head of coffee processors and exporters said.
The standard gauge railway is expected to be complete by 2018.
It is expected to cover a distance of about 2,935 kilometres and have features such as passenger trains with a speed of 120 kilometres per hour and freight trains designed to move at 80 kilometres per hour.
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