Kenya, Tanzania in tight race for region transport hub status

Wednesday April 01 2015

Kenya and Tanzania are caught in a head-to-head race to become the preferred regional transport hub amid massive expansion projects in sea ports, connecting railway and road networks.

Tanzania on Monday said it plans to spend Sh1.3 trillion ($14.2 billion) to construct a new rail network in the next five years, financed with commercial loans as the country aims to become a regional transport hub.

Tanzania, like its neighbour Kenya, wants to capitalise on a long coastline and upgrade existing rickety railways and roads to serve growing economies in the land-locked heart of Africa.

Oil and gas discoveries in Kenya, Uganda and Tanzania have turned the East African region into an exploration hotspot, but transport infrastructure in those countries has suffered from decades of under-investment.

“This will be the single biggest project ever to be implemented by the Tanzanian government since our country’s independence,” Reuters quoted Transport Minister Samuel Sitta as having said in a statement seen on Monday, referring to the year 1961.

The projects include constructing a 2,561 km standard gauge railway connecting the port at the commercial capital of Dar es Salaam to Tanzania’s land-locked neighbours, Rwanda and Burundi at a cost of $7.6 billion (Sh700 billion), Mr Sitta said.


Two additional lines, to be built at a combined cost of $6.6 billion (Sh608 billion), would connect Dar es Salaam to the coal, iron ore and soda ash mining areas in the south and northern parts of the country, he said.

Tanzania targets to increase the capacity of its main port to 28 million tonnes a year by 2020 from the 14.6 million tonnes it handled in the financial year 2013/14.

The grand infrastructure expansion plans by Tanzania could help revamp the status of the port of Dar es Salaam which eyes to outwit the rival Kenyan port of Mombasa.

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The two ports are the main gateways to the East African region and also service markets in South Sudan and the Great Lakes region, handling key items including fuel, consumer goods and other imports as well as exports of tea and coffee from the region.

Kenya is also constructing a Sh327 billion-609 kilometre new standard gauge railway line between Mombasa and Nairobi to boost the movement of cargo from the port and boost the countries competitiveness.

The Mombasa port handled a record one million twenty-foot equivalent units (TEUs) of cargo last year, signifying rising trade volumes in the region, but frequent pile-up of cargo has piled pressure for its expansion and upgrade of support infrastructure such as railway and roads.

Kenya is also building a second container terminal valued at Sh28 billion in Mombasa to handle increased trade within the region driven by a boom in the construction industry, vast infrastructure development and an emerging middle class.

By 2016, the new terminal is projected to have a capacity of 450,000 TEUs and this is expected to rise to 1.2 million by 2019. The government through the Kenya Ports Authority has already shortlisted firms for a concessionaire deal to run the first phase of the new container terminal.

The Treasury in February picked a consortium led by consultancy firm PricewaterhouseCoopers to offer transaction advisory for expansion of the Mombasa-Nairobi highway (A109) into a dual carriageway in yet another move aimed at easing traffic to Mombasa port.

The 485km Nairobi-Mombasa highway is deemed critical for trade in the region because of its key link to the Mombasa port. Besides the Nairobi-Mombasa highway, the government also plans to expand the 157km Nairobi-Nakuru highway into a dual carriage.

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