AFRICAN DEVELOPMENT BANK TO FINANCE BURUNDI - RWANDA - TANZANIA RAILWAY

Construction of the railway line from Tanzania to Burundi and Rwanda could start next year after the three countries hired a transaction advisor for the project.

Canadian Pacific Consulting Services (CPCS), railways transportation services consultancy firm is to source funding and investors in the planned railway line connecting the three countries.

The hiring by the governments of Burundi, Rwanda and Tanzania, which are jointly funding the project, paves the way for CPCS to market the project to investors and ultimately attract financiers.

A functional and reliable railway line along the Central Corridor is seen as crucial in bringing down transport costs and also as key to protecting roads, which are being damaged by heavy trucks.

Information from the Dar es Salaam-Isaka-Kigali / Keza-Gitega-Musongati Railway project co-ordination office in Kigali indicates that the planned 1,672 kilometre standard gauge railway project is to cost the three countries $5 billion.

And the model of investment is a private public partnership. It is also emerging that Chinese, Indian, African and German investors have expressed interest in the project. But what is holding back negotiations is that the three countries have no expertise in the private-public partnership mode of investment for railway project.

“A note of no objection has been sent to African Development Bank and should the bank okay it, CPCS will start marketing the project to prospective investors,” said a source in the Rwanda Transport Development Agency.

AfDB is a key financing agency of this project after studies that have informed the three countries about the viability of the project.

Traders spend 40 per cent of the cost of an item on transport partly because of an inefficient railway system, a poor road network and growing non-tariff barriers.

The East African