Business
East Africa: Investment in railway infrastructure to boost region’s competitiveness with Asia
“Five to ten percent of the country’s imports are planned to come through the port of Berbera, and we will be looking for proper ports for different areas of the country,” transport minister Workneh Gebeyehu told parliament in February.
“But the port of Djibouti continues to be the major one.”
The government in Addis Ababa has experimented in outsourcing the management of key parastatals without relinquishing ownership.
For instance, France Telecom managed Ethio Telecom from 2010 to 2013.
Given the scale of the Ethiopian Shipping & Logistics Services Enterprise’s operations, it may well be that external companies see management opportunities arise. Across the border in Kenya and Uganda, management contracts for parastatals already exist, although they had a bumpy ride in their first iterations.
The Rift Valley Railways (RVR) consortium picked up the baton in 2006 and is currently managing the colonial-era meter-gauge track system. The RVR bought 20 new General Electric locomotives in 2014, of which 13 have been delivered to Mombasa.
When added to the current rehabilitated stock, this doubles RVR’s mainline pulling power. An additional 120 wagons should arrive by November of this year. RVR says that it welcomes the competition from Chinese-built rail networks.
China Road and Bridge Corporation, a subsidiary of China Communications Construction Company, began work on a new standard gauge rail line in Kenya in 2014.
“The total throughput of Mombasa port is estimated to be around 26 million tonnes per annum by 2017,” says Andreas Heinel, RVR’s chief commercial officer. “We would be able to carry approximately 4 million tonnes per annum at full capacity on the meter gauge. And the standard gauge railway would target around 10 million tonnes per annum when fully up and running. That still leaves a lot of slack to be picked up.”
Source: The Africa Report
