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EAC joint investment in rail transport must be accelerated

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Added 1st October 2019 11:47 AM

A general conclusion drawn from research on transport trends worldwide is that a doubling of transport costs leads to a drop in economic growth.

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A general conclusion drawn from research on transport trends worldwide is that a doubling of transport costs leads to a drop in economic growth.

By Damali Ssali
The need, cost, and quality of multimodal transport is increasingly becoming relevant for the participation of developing countries in the globalised economy.
A general conclusion drawn from research on transport trends worldwide is that a doubling of transport costs leads to a drop in economic growth. This is mainly because the prices of imported products increase, and export revenues decrease.
Further, empirical analysis of any economy’s ability to manage complex multimodal linkages indicates that a 1% improvement in the land transport performance index would lead to a 0.5% increase in overall trade and a 3% increase in exports. 
Therefore, the main task of transport decision-makers is to cause improvements to multimodal transport performance so that national economies benefit from the significant trade and export gains.
An effective multimodal transport system is one where there is integration, and cross interplay, by the various modes of transport including air transport, marine transport, and land transport. Land transport comprises of road, rail and pipeline transport. 
Almost all major East African Community (EAC) economies are currently well serviced by air transport and have functioning state carriers, such as Kenya Airways, Tanzania Air, Rwanda Air and most recently Uganda Airlines.
In respect to international marine transport, the EAC is well served by the two main ports of Mombasa and Dar-es-Salaam even though the inland water transport system is largely underdeveloped. Similarly, when it comes to inland transport, rail transport continues to substantially lag behind road transport.
The above situation analysis makes it very difficult for the EAC to reap the substantial benefits of a multimodal transport system largely due to the absence of a competitive regional rail system.
Each transport mode is characterised by a set of technical, operational and commercial characteristics that give it both a competitive advantage and complementary role to other modes.
Technical characteristics relate to attributes such as speed, capacity, and motive technology while operational characteristics involve the context in which modes are operated, including speed limits, safety conditions or operating hours.
Rail transport, for example, is traditionally linked with heavy industry. Containerisation has improved its flexibility, by linking it with road and maritime transport modes. Rail transport is by far the best inland transport mode for trade offering the highest capacity with a 23,000 tons fully loaded coal unit train being the heaviest load ever carried.
The continued under-development of the rail transport mode means that road transport is burdened by a disproportionate share of bulk trade movement. This results in not only transportation inefficiencies but also in premature road damage from these heavy loads calling for avoidable capital investments in maintenance and rehabilitation. This inevitably results in higher transport costs that diminish the economic potential of the EAC.
After many years of decline, due to neglect and underinvestment, the railway sector has the potential to play an important role in the future development of the EAC not only for long-distance freight and bulk cargo but also for urban transport in major cities.
However, the capacity of the existing railway network is limited by several factors including the low velocity at which the trains can operate, limits to the permissible axle loads and gauge differences between the standard gauge and meter gauge.
According to the East African Railway master plan, with investment, the current traffic on the existing network has the potential to increase to over 21 million tonnes by 2030, with an annual growth rate of over 6.7%. This growth is going to be driven partly by the growth in GDP of the member states and partly from new traffic from the oil sector developments in both Uganda and Kenya.
Investment in the railways of Uganda, Kenya, and Tanzania, therefore, will have a big positive impact on the economic development and social environment of these countries. The consequential benefits of reducing road maintenance and rehabilitation costs, road accidents and road congestion alone will jolt up the regional GDP.
Further, regional connectivity will be enhanced through improved access to the ports of Mombasa and Dar-es-salaam, and additional modal connections to say Rwanda, South Sudan, Burundi and the Eastern Democratic Republic of Congo.
Therefore, if the EAC is to remain the most integrated regional block with some of the world’s fastest-growing economies, it must develop a framework to attract joint investment in rail transport development.
The writer is a trade development expert

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