Central Corridor states bank on railway project to make route more competitive

Central Corridor member states have for almost 10 years now been working hard to improve the route and make it more attractive and competitive in the region. Over the period, efforts have focused on reducing non-tariff barriers (NTBs) to reduce the cost of doing business along the corridor.

Central Corridor member states have for almost 10 years now been working hard to improve the route and make it more attractive and competitive in the region. Over the period, efforts have focused on reducing non-tariff barriers (NTBs) to reduce the cost of doing business along the corridor. The Central Corridor is made up of Burundi, the Democratic Republic of Congo, Rwanda, the United Republic of Tanzania and Uganda. Rwanda’s State Minister for Transport and the Central Corridor Transit Transport Facilitation Agency (TTFA) chairman, Dr Alexis Nzahabwanimana, says the creation of the agency has played a major role in efforts geared at eliminating trade barriers along the corridor. Business Times’ Peterson Tumwebaze caught up with Nzahabwanimana and he explains the initiatives TTFA is working on to make the corridor more competitive and route of choice for business people in the region:

The Interstate Council of Ministers was tasked to improve trade along the Central Corridor; what is being done to realise this goal?

The council is a multilateral organ responsible for co-ordinating policy issues of the Central Corridor Transport Facilitation Agency (TTFA). It is composed of ministers responsible for transport matters in each partner state.

Our role as ministers is to deal with matters related to transit transport policy and give the corridor the required political drive and orientation. We also study all challenges related to co-operation in transit transport matters, which the member countries agree to promote.

The central role of the council is to ensure the co-operation and collaboration among the partner states as well as harmonise inter-state policies, legal and regulatory aspects which are necessary to attract investments into the region.

It is almost 10 years since the Central Corridor Transport Facilitation Agency was created. What has the agency achieved so far and how are you positioning it to meet the current trade demands?

TTFA was established in September, 2006 under an agreement signed by the five governments of Burundi, the Democratic Republic of Congo, Rwanda, the United Republic of Tanzania and Uganda. It was formed in recognition of the right of landlocked countries to transit trade as declared under specific United Nations General Assembly Resolution 56/180 on particular needs of landlocked developing countries from which other declarations and action programmes evolved.

And since its   inception, the platform, through the secretariat has done a commendable job, especially working on establishing the Central Corridor railway project.

It has also been instrumental in engaging both the private and the public sector, more specifically on resolving transport and transit trade challenges along the route.

The main focus has so far been on easing movement of goods by offering the best infrastructure. And so far our efforts have resulted into reduction of non-trade barriers, which has, ultimately, reduced the cost of operations and delays along the corridor. For instance, the port of Dar es Salaam container dwell-time has reduced from 25 days to about 11 days. Check points along the route have equally reduced from around 50 to at least eight inside Tanzania. This has led to a reduction in transit time along the corridor to about three days from Dar es Salaam to Rusumo border. Our target is to ensure that there are at least three check points in Tanzania and just one in other member states in the near future.

We are generally trying to make the central corridor more competitive and attractive...Presently, over 75 per cent of our total imports and exports pass through Dar es Salaam port.

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Cargo trucks at Rusumo border. The Central corridor still has numerous NTBs that have made it less attractive to the business community. (File)

Despite the achievements, there are still many NTBS along the corridor. What are you doing to eliminate them?

With the guidance of the Heads of State, we are working to expand the mandate of the council so it can handle a wide range of issues concerning trade and investment among member countries. We want to see it become an organisation that is not only facilitating in terms of advocacy   but also playing a critical role in the infrastructure network planning across the corridor.

This is because we cannot talk about none tariff barriers without talking about other structural agencies, like police, customs, revenue authorities and immigration bodies.

Therefore our role as a corridor is to upgrade existing infrastructure and invest in new networks to make the corridor more competitive.

We want to move fast and take all necessary measures for the expeditious movement of traffic and for the avoidance of unnecessary delays in the movement of goods in transit through their territories

What is being done to implement one-stop border posts along the route?

The idea of creating one-stop border posts is one of the priorities of the agency because the initiative can significantly reduce the time and cost of transport along the route.

We have already established one at Rusomo and Nemba borders; we are in the process of setting up others at Kacyaru and Rusizi. Ruhwa, Kagitumba and Ngoma one-stop border posts are now operational.

We are currently looking at creating more one-stop border posts to further ease the way of doing business.

With one-stop border posts, instead of going through clearing procedures at two stations, we have customs officers from both sides share one office so they handle it at once.

Member countries are in advanced stages of establishing a railway line across the region. How do you see the project driving cross-border trade among member states?

The railway line project is essential for us to be able to reduce transport costs. Railway transport is the only way we can be able to significantly reduce transport costs and make the corridor economically viable and attractive to the private sector.

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Nzahabwanimana says infrastructure development key to reducing the cost of doing business in the region. (Timothy Kisambira)

What progress have you made so far in implementing the project?

The major line, from Dar es Salaam through Isaka, which is key to the project, is already in place. However, we are currently calling for the upgrading of the existing line to standard railway gauge before it is extended to other member states.

The government of Tanzania and development partners, including the World Bank,   have already committed to rehabilitate the existing railway line as we work on the remaining segment.

Also, Tanzania and the African Development Bank (AfDB) we are working on the project from Dar es Salaam through Isaka to Musoganti. Many actors have already expressed interest to invest in the project and, currently, clarifying any issues concerning terms of reference.

We talking of linking all member countries up the Eastern DRC. When it is finally implemented, it will be a huge milestone and critical to the region’s growth. That’s why we must move fast and implement the projected by 2020.

Wear also aware of the northern corridor railway project which has already in progress so ours is to make sure we move fast and become more competitive. The Central Corridor railway project will be economically viable if it is integrated into the network, including the Northern Corridor railway line. Our role is, therefore, to market its economic potential to the private sector (which is also showing interest to invest in the project). Generally, we are confident the rate of return on the Central Corridor railway project could be much high compared to any other projects.

Have you faced any challenges so far while implementing the project?

So far, the main challenge is the negotiation time, which sometimes takes long. We have already initiated reforms at the secretariat to help strengthen our capacity to manage the project.

By the time the railway line is in place, we should be ready with the regulations and policies, too. We must have a common management and develop adequate manpower to help manage the network.

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Cargo train.

As Rwanda’s transport minister, which of the two railway projects (central and northern) is the country’s prioritising?

We are going for both projects because any railway line project is more beneficial when it’s networked. We want a more networked system that will help reduce the cost of doing business across the region.

We look at how to accelerate the Central Corridor project and integrate it into the whole network. For instance, block trains have been allocated to Rwanda from Dar–Kigali via Isaka purposely to reduce cost of transport of goods compared to truckers.

The message to the business community is to use the cheap facility to increase their profitability. The dry port at Isaka was handed over to the Private Sector Federation so that they can developed it.

We, therefore, encourage  the private sector to move fast and develop it because it presents other business opportunities for th country and the region generally.  Remember, creating a seamless network to transport goods and people along the Central Corridor will help drive the region’s growth.

What is the role of the private sector in the railway project implementation?

The project is a great business opportunity for the private sector...it guarantees high rate on return. The private sector should take advantage of this to improve their competitiveness.

The business community should utilise the infrastructure in place, as well as take advantage of the most strategically positioned and efficient corridor in East and Central Africa.

Any lessons for the central corridor from the Europeean Union experience?

We know that what started as a corridor in Europe has since transformed into in political and economic Union. Therefore, that is the direction we are taking. We are working to ensure that the cost of doing business along the corridor goes down.

 

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