Once again, Kenya has been hit hard after Rwanda announced that it is choosing the Tanzania route over the Kenyan one citing that the rail link to Indian Ocean ports through the former is cheaper and will be shorter.
Rwandan finance and economic planning minister Claver Gatete said his country would develop its rail through Tanzania, Rwanda and Burundi, putting the Kenya-Uganda-Rwanda coalition of the willing relationship (CoW) at stake.
In March, Uganda dropped the bombshell that it was opting out of the crude oil pipeline deal with Kenya, settling to work with Tanzania instead. Even though Kenya tried to salvage the situation, Uganda-Tanzania pact sailed through with Uganda arguing that the Kenyan route was not only expensive but also insecure.
Aimed at bringing about development in the region through infrastructure, telecommunication, defense, and tourism promotion projects in East Africa’s Northern Corridor, Presidents Uhuru Kenyatta of Kenya, Paul Kagame (Rwanda) and Uganda’s Yoweri Museveni entered into the CoW agreement in 2013.
The Northern corridor was planned such that it would give the landlocked Uganda, Rwanda, Democratic Republic of Congo and South Sudan access to the sea through Kenya’s Port of Mombasa.
But that deal has been watered down by the latest announcement by the Rwandan government. The standard gauge railway was estimated to cost $13 billion.
Now Kenya and Uganda have been left alone in the pursuance of the rail construction project which might prove difficult especially because the 2013 CoW isolated Burundi and Tanzania.
According to studies by East African Community affairs ministry, the Tanzanian option would cost Rwanda between $800 million and $900 million while Rwanda would part with $1 billion in the Kenyan route.
“We opted for the route transiting to Tanzania during the construction of our railway line because the Kenyan route would be expensive and time-consuming,” said Gatete as quoted by Xinhua news agency.
Rwanda’s decision was expected, according to Kenya Railway Corporation Managing Director Athanas Maina. The EAC railway master plan gives the country an option to interconnect from either Mombasa or Dar es Salaam, he argued.
Rwanda has said it will continue using the port of Mombasa as it has always done. “Our trade goes through Dar es Salaam and Mombasa … We will need both of them.”
In a June meeting, Rwanda questioned the haste in which Uganda was pushing for the extension of the rail to Juba at the expense of Kigali, even though at the time, South Sudan was yet to become an EAC member. The slow connection to Kigali and cost considerations might have fueled the need to look the other way.
There is a possibility that Kenya could still gain economically from the railway despite Rwanda’s withdrawal. South Sudan and Uganda which have the bulk of cargo passing through the port are great opportunities for Kenya.
Statistics from Mombasa port indicate that Uganda has the largest volume of transit cargo averaged 77 percent of gross transit volumes, followed by South Sudan (11.5 percent) and Rwanda at 3.9 percent.
Rwanda’s decision has to be discussed at the 14th Northern Corridor Integration Projects (NCIP) summit next month, to make the plan official.
Image Credit: Salaton Njau/Nation Media Group