Background

Uganda depends for over 90% of its seaborne (import/Export) traffic transport on the Northern Corridor that is through the Port of Mombasa. Less than 1% of her seaborne traffic volumes are through the Port of Dar es Salaam. This over dependency on the Northern Corridor makes the Country’s trade vulnerable to the socio-economic environment in Kenya, the route monopoly and the transport logistic limitations. The Government policy is therefore to strengthen the use of Central Corridor as a second route to the sea and mitigate such undesirable effects to the economy. 

The Central Corridor Route comprises:The Rail/Marine/Rail: Kampala – Port Bell/Mwanza – Dar-es-Salaam Route 1229 km. Rail/Marine/Road: Kampala – Port Bell – Mwanza/Dar-es-Salaam route 1503 km.All Road Kampala:

Mutukula-Bukoba-Isaka-Dodoma – Dar-es-Salaam  20120 km. New Rail/Marine/rail – Kampala – Port Bell – Musoma – Arusha – Tanga.New Road/Rail/Marine/Rail or Road Kampala – New Park – Mwanza – Dar-es-Salaam 1235 km to be developed.

The most feasible alternative route to Dar-es-Salaam is therefore via Lake Victoria to Mwanza connecting by rail or road to Dar-es-Salaam. 

Operationalization of the Route, Operationalization of the most feasible alternative central corridor route requires investment in transport infrastructure, equipment and improvement in transport logistics as follows:

Port Infrastructure, The alternative Port infrastructure on the Northern Shores of Lake Victoria are Jinja Pier, Port Bell and the proposed New Port at Bukasa near Namanve – Kampala Industrial Business Park (KIBP).

 Jinja Port and Port Bell, Although connected to Rail by Wagon Ferry and with a potential for expansion, Jinja Pier is distant from the major Business Centre, Kampala and KIBP (80 km by road and 100 km by rail). This would increase transport costs and cost of doing busi-ness. Port Bell is near Kampala, the centre of industry and commerce, connected by a 9 km railway line to Kampala and close to the Kampala Business Industrial Park (KBIP) at Namanve. It therefore offers a direct connection with Dar-es-Salaam via Mwanza and avoids crossing the populated urban Greater Kampala Metropolitan Area (GKMA).  However, the space for expansion is limited to handle multipurpose and containerised ships.   The development of the port is therefore of a short term nature to handle current traffic.

The planned developments at the Port includes the rehabilitation of the dry dock and remodeling of the Port to handle containerized and general Cargo.  The required investment is US$ 13million. Sh. 3.9 billion (US $ 1.9 million) has been provided in the 2009/10 FY.  The balance will be required in the MTEF 2009/10 – 2013/14.

The New Port at Bukasa, Based on the expected volume and type of Uganda Cargo to be handled, a New conventional container and multipurpose harbour has been recommended.  The proposed new port will be located at Bukasa 3 km away from the KIBP at Namanve.  It can be linked to the rail and the Kampala Northern By Pass. The latter will facilitate movement of transit traffic to neighboring Rwanda, Southern Sudan and DR Congo. The Port will have the capacity to handle 1.5 – 2 million tons between 2012 – 2017 (Phase 1) and 6 – 7 million tons when fully developed.

Mwanza Port

Mwanza Port has been enhanced with the provision of container handling facilities by the Tanzania Port Authority.  There is also a second Port owned and operated by Messer’s Kamanga Ferries a Multipurpose Transport Company.

The new Port Development at Bukasa, Kampala includes developments at Mwanza. This will cover the construction of the Container Yard, Docking facilities, procurement of Container Handling equipment and improvement of infrastructure and facilities including utilities.  These are estimated to cost US $ 20 million with an investment of US $ 1.3 million in the first phase 2010 – 2012. Uganda will require land at the Port of Mwanza to develop a dedicated Container Terminal and fuel storage facilities in order to effectively and efficiently handle the projected increase in containerized and fuel traffic on the Dar es Salaam-Mwanza route. The estimated cost of developing the container Terminal is US $ 12 million.

Port of Dar-es-Salaam, The annual rated Port Capacity of Dar-es-Salaam Port is 13.3 million tones.  However, during the 2006/07 the Port handled 7.4 million tones of Cargo of which 70% was for Tanzania and 30% transit.  Of the Transit traffic (2.3 million tones) Uganda’s traffic was 0.043 million, the rest comprised of Rwanda, Burundi, Malawi, Zambia, DR Congo and other transshipment Cargo.  The Port of Dar es Salaam utilization capacity is about 50% and has therefore capacity to handle more Cargo.  To handle the increased projected traffic in the medium and long term, Uganda will require to develop her own container terminal at Dar es Salaam and reactivation of the request for the land earlier offered by the Tanzania Government.  The cost of developing the Container Terminal is estimated at US $ 15 million including equipment and super structure.

The Port is further constrained by a long cargo dwell time of about 13 days arising from delays in cargo processing and handling.

Shipping Capacity The Uganda traffic through the Port of Dar-es-Salaam has been on the decline from 6.3% in 2001 to 1.9% of total Uganda input/Export traffic in 2006 and is now less than 1%.  The decline is attributed to the grounding the 3 Ugandan ferries in 2005 leaving only MV Umoja the Tanzania Wagon Ferry to service the route. When all the Vessels are rehabilitated and put back to service by mid  2010, total available capacity will be 0.620 million tonnes which is still below the estimated demand of 2.7 million in 2012.

To increase Uganda’s traffic through the Port of Dar es Salaam the marine sector capacity shall be expanded through an expeditious rehabilitation of Uganda’s grounded vessels and provision of more vessels especially container and Multipurpose vessels by the private Sector. The New Port Development Projects has an estimate of 5 vessels estimated to cost US $ 20 million with an initial start of 3 vessels at an estimated cost of US $ 12 million. These vessels can however be supplied outside the project and operated privately.  The URC grounded vessels will be rehabilitated at a cost of US $ 3.8 mn. provided by both the GoU and World Bank.

Railway

The railway line to Port Bell (9 km) is still in good condition. The railway to the New Port at Bukasa and to the Business Industrial Park and Main Jinja – Kampala railway line (7 km) will be developed under the New Port development Project RVR when restructured will secure US $ 40 Million to finance the procurement of Wagons and Locomotives of the Uganda and Kenya Railways. The Tanzania Railway Company will finance the development of central railway network from Mwanza to Dar-es-Salaam.  Should RVR fail to meet its contractual obligations, GoU may implement Plan B to operate and develop railway services and infrastructure at an estimated cost of US $ 1 million (Sh. 20 bn.) within 1 – 2 years.

Roads There has been substantial development of the road infrastructure both on the Uganda and Tanzania sections of the Central Corridor route.  For example from Dar es Salaam to Mutukula via Dodoma and Isaka only a small section Isaka-Lushungu (60 km) remains to be tar-macked. In Uganda, the Kampala-Masaka reconstruction is in progress and the Masaka-Kyotera road section will be reconstructed before 2013. Kyotera-Mutukula road section is still in good condition. The problem is, however, the long distances, transit  time and border crossing delays. Under the East African Trade and Transport Facilitation project a One Stop Border Post will be constructed and operated at Mutukula to facilitate border crossing.  Under the same project the cargo tracking systems between Uganda and Tanzania revenue authorities will be introduced and harmonized to enhance cargo processing.

Logistical Support

To strengthen the efficiency and effectiveness of the Central Corridor and attract more traffic to the route the following logistical measures should be taken:

(i) The Tanzania Port and Revenue Authorities should improve Cargo handling, documentation at the Port of Dar-es-Salaam in order to reduce Port dwell time, transit time comparable to Mombasa Port.

(ii) The establishment of the one stop Border Post facilities and operations and establishment and harmonization of cargo trucking systems by the Uganda and Tanzania authorities at Mutukula Boarder Post should be expedited.

(iii) The Tanzania Port Authority should intensify  its marketing of the route through sensitizing of the business Community/Shipers in Uganda and in Tanzania to increase its customer/shippers market.

(iv) RVR and Tanzania railways should operate seamless block trains to reduce transit time (currently 19 days) and increase railway efficiency. 

Financing

Financing of Investments for the development of the Central Corridor route can be through Government, Development Partners and Public Private Partnership arrangements (PPP).

The GoU is already financing the Rehabilitation of the 2 grounded marine vessels and the rehabilitation and expansion of Port Bell at a cost of US $ 5.8 million. However, more funding will be required (US $. 6.0 million.) to complete the project in Fy 2010/11.  Initiatives have been taken to salvage, repair and operate “MV Kabalega” by the Private Sector in an effort to increase the shipping capacity.

In addition, the Government of Uganda on 26th June 2009 signed a Memorandum of Understanding (MOU) attached with Messer’s Gauff and Company, Engineering of Germany on the Proposals for the Development of the New Kampala Port and Transportation as part of the Central Corridor Development Project. The estimated cost of the project is 230 million starting with an initial investment of US $ 73.0 million in the first 3 years. The MOU provides, among other things, that:

(i) Gauff will source for funds for the Project from European Credit Financing Banks and the Export Credit Bank of Germany (AKA). 

(ii) The Government of Uganda will negotiate with Gauff for an Engineering, Contract and Operation Management (EPCOM) Agreement for implementation of the project. 

Conclusion

Considering the problems associated with the over dependency on the Northern Corridor route, it is imperative that Uganda urgently develops a competitive second route to the sea via the Port of Dar-es-Salaam.  The development strategy will involve addressing physical infrastructure constraints such as Ports, railways, roads and provision of adequate associated maritime facilities such as ships, handling equipment and improvement of transport logistics, by both Uganda and Tanzania. 

You are requested to note the limitations on the increased use of the Central Corridor, consider the proposed Infrastructure equipment and logistical interventions required to improve the route.

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