As Rwanda, Burundi demand end of TRC concession to Indian Rail Company
With the construction of a trans-boundary railway line from Tanzania through Rwanda to Burundi planned to begin at the end of this year, infrastructure ministers in the three countries are pushing Tanzania to terminate the exclusive rights held by Rail India Technical and Economic Services (RITES) to manage Tanzania Railway.
The Tanzanian government reached a 25-year concession agreement with RITES to manage the railway in 2007 with a major objective of turning around the once loss making and rundown railway corporation into a profitable and competitive company. RITES acquired a 51 per cent stake in the TRL while the government retained 41 percent. Rwanda's Infrastructure minister, Linda Bihire, who coordinates the project, says revising the concession will allow Rwanda, Tanzania and Burundi to be part of the new railway project with clearly defined roles.
"The issue of Rites came up during the meeting. We [infrastructure ministers] recommended that government of Tanzania discusses with RITES to end their exclusive rights on TRC," said Bihire in an interview with The Independent.
The construction of the Dar-es-Salaam “Isaka“Keza“Gitega“Musongati/Bujumbura railway at standard gauge is projected to cost $3.5 billion.
Bihire says the trans-boundary railway project will change the lives of people in the region when the train rolls out 2013.
"Transport costs will lower from 42 percent to between 6 and 11 percent," she says.
Rwanda has always suffered high goods haulage costs partly because of the distance from the sea and the non-tariff barriers in the region. As a result, the price of most goods and services in Rwanda is much higher compared to other countries in the region.
According to a report, "Assessment of Non Tariff Barriers along the Northern and Central Corridor", Rwanda's business community spends 42 percent on transport, a cost that eats into their profits.
The study was commissioned by Rwanda Private Sector Federation.
But with a modern railway line that can handle more cargo and fast, the prices will reduce drastically.
Bihire says with the standard gauge, cargo can be delivered in Kigali or Dar-es-Salaam within a day, as opposed the whole week trucks are currently spending to complete the route.
The old 1,000mm gauge railway rail lines in Uganda, Tanzania and Kenya the country through which Rwanda transports her goods are hopelessly slow and allow limited cargo to be transported on the line.
But when the Dar-Kigali-Bujumbura line is completed, a modern high-speed train, with a minimum speed of 120kph will be deployed on the rail.
Studies carried out by a consultancy firm on the project indicate the volume of cargo hauled by the train annually will reach 50 million tonnes by 2044.
The minerals from Burundi and Tanzania alone will contribute 4.5 million tonnes of cargo annually.
As for revenue, it is projected that the multinational railway will be able to generate $44.8 billion in 30 years of operation.
With most cargo in the region currently being handled by road, countries are spending a lot to in maintenance to keep the roads passable.
Rwanda with its steep hills is spending billions of tax payers' money on rehabilitating the narrow roads which date back to colonial times.
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