The construction of the Isaka-Kigali standard gauge railway is set to start in October, but Burundi has bowed out of the deal.
Rwanda Infrastructure Minister James Musoni and Tanzania Minister of Communication, Science and Technology Makame Mbarawa launched the project on January 20, in Dar es Salaam.
Tanzania President John Magufuli and Rwanda President Paul Kagame asked for the project to be expedited.
The two heads of state met in mid-January and discussed strategies to speed up the Isaka-Kigali standard gauge railway section.
Rwanda State Minister for Transport Jean Deu Uwihanganye said the investment cost of the 521km Isaka-Kigali section has shot up by $700 million, hitting $2.5 billion due to inflation and depreciation of the Rwanda franc against major currencies.
Three years ago, Canadian engineering firm Canarail and Gibbs Africa, which carried out the feasibility study had estimated that the Isaka-Rusumo-Kigali section would cost $1.8 billion.
Rwanda also faces higher investment costs for its 150km section of the railway compared with other East African member states.
While the 371km Isaka-Rusumo in Tanzania will cost $942 million, Rwanda’s 150km section from Rusumo border to Kigali and Bugesera will cost $857 million.
Mukiza Odilo, a railways engineer at the Rwanda Ministry of Infrastructure said constructing a kilometre of the standard gauge railway will cost $12 million.
“In Kenya the average per kilometre is $5 million, though the Nakuru section will average $8 million per km. The cost in Uganda is estimated at $5 million but the Kampala-Mirama Hills section will also cost more.
“Tanzania is the only country with the lowest cost because of the flat nature of its land,” said Mr Odilo.
Burundi has put the construction of its section on hold.