Whereas a Ugandan trader pays less than $1,000 dollars to transport a 20 feet container to Mombasa, the Rwandan counterpart pays $4,000, a hides and skins dealer in Kigali complained. Remember we buy from the same source. We supply the same market, the trader added. And concluded:
"This makes doing business in Rwanda expensive and uncompetitive." He is right. Transport and insurance cost for traders in Rwanda is estimated to be between 40 – 50 per cent of the value of exports and imports while the average for the world’s developed countries is 8.6 per cent and 17.2 per cent for all the least developed countries.
But in a few years, transport costs are to reduce to less than half what importers and exporters are paying today, an expert working on the Tanzania, Rwanda and Burundi railway line said. A modern high-speed train, with a minimum speed limit of 120 kilometres per hour is planned to be introduced on the Kigali-Dar Es Salaam route. Imports will be delivered in Kigali within a day, contrary to the six days they have been taking from Mombasa.
If introduced, this is going to be the fastest train in the East African region with capacity to haul several tonnes of cargo. The average speed for the Uganda Railways train is 40kms per hour while that of Tanzania Railways is 20 km per hour.
Transport experts say the locomotive will speed up movement of cargo and people, thereby reducing doing business costs not only in Rwanda but the entire East African region and countries neighbouring the economic bloc.
But importers will have to wait for more years before they start reaping from this multi-million project.
The feasibility study which started on June 19th, 2007 may be completed in August. The studies funded by the African Development Bank (ADB) grant are to ascertain the cost of the Isaka-Kigali and Burundi railway link, and necessary investment required for improvement of the existing Isaka- Dar Es Salaam old railway line.
The railways project is described by technocrats in Kigali as one of the big projects that might position Rwanda as a cargo hub; drive the country out of poverty, as it will accelerate economic growth.
Philippe Munyaruyenzi, multi nation railway project coordinator for Tanzania, Rwanda and Burundi was however quick to say that it will also serve the agricultural, commercial, mining and industrial hinterland of Tanzania, neighbouring states of Rwanda, Burundi and the Democratic Republic of Congo (DRC) and Uganda.
He said the next phases of the study is going to be a detailed design study, paving way for the countries to determine the actual cost for investment, construction phases and fund mobilisation.
When competed, the Muyaruyenzi said the Isaka-Kigali- 450km railway line and the 198km Burundi link will enable the development and exploitation of un-tapped natural resources to provide the critical level of tonnage to support the railway corridor development.