EAC Railways Sector Enhancement Project
- Reference: P-Z1-DC0-013
- Approval date: 29/06/2012
- Start date: 10/09/2014
- Appraisal Date: 25/04/2012
- Status: OngoingOnGo
- Implementing Agency: EAST AFRICAN COMMUNITY (EAC)
- Location: Tanzania
Description of Studies:
The study consists of three packages as under: Feasibility and legal & regulatory harmonization studies including Environment Impact Assessment (EIA) and social impact analysis for:
I.Package A: Establishment of Railway Coordination Office (Rail Unit) within EAC Secretariat;
II.Package B: Preparation of investment package including pre-and feasibility studies of 21 Regional Railways main links;
III.Package C: Policy Program for Improved Sub-regional Rail Traffic including an harmonisation of Legal and Regulatory Framework;
Unpacking the East African Railways Master Plan and preparing bankable projects for investments and policy related documents to assist in the reforming railways sector in the region. Specifically the study will pursue the following objectives: a) Propose an optimal Institutional Design and implementation arrangement for the establishment of a railway unit within EAC Secretariat. b) Determine main rail missing links to complete an EAC Inter-connected Rail Network System. c) Propose a legal and regulatory framework for harmonization of EAC Rail Network System.
Many of the regional railway systems, in eastern and southern Africa, are not functioning as they should, in virtually all respects - poor reliability, high accidents and failure rates, high costs, low volumes and financially loss making. The reasons for this have been well debated and studied for many years and are also well understood - initial loss of volumes and income from road transport deregulation, followed by lack of investment and deferred maintenance, leading to declining reliability and further loss of traffic. Despite the generally negative prognosis, there is clearly a renewed interest in rail transportation throughout the region, with very many proposed new projects, the general expectation from governments and institutions that the systems will now be revived, upgraded and expanded with increased private sector participation. The reasons for this renewed, particularly in respect of transport services on the Northern and Central Corridors of East Africa is mainly driven by the following factors: "Continued decline and poor state of the "old" railways, despite private sector concessioning, has led to the belief by some regional governments and institutions the regional railway system is obsolete and may not be adequate to support expected economic growth, and the better solution would be to modernize the network to higher capacity and speed, at the standard gauge. "Increased heavy goods vehicle traffic on the roads, with consequent increased road maintenance costs, which cannot be afforded or sustained on many of the routes - except on some high volume routes which can be operated as toll roads; "Rail can better handle empty backhaul, because lower variable costs "Rail is the natural mode for most large volumes of heavy bulk commodities, because of the ability to move heavy and large freight parcels "A viable rail service is necessary to keep trucking competitive "The shift of bulk imports to road exacerbates the imbalance in full truck flows, resulting in higher costs "Efficient rail operations would facilitate competition between two corridors for transit traffic, with more competitive pricing "Improved rail transport is also key to resuscitating lake transport services "The high cost of road transport compared to rail transport (assuming that the rail volumes are high enough to achieve an acceptable level of equipment and infrastructure utilization) "The increasing cost of fuel. Railway transportation is about four times more fuel efficient than road transportation, and as the fuel price increase, rail will become increasingly competitive. There will be many more international oil crises, and it is estimated that by the year 2030, oil production will have fallen from their present levels with consequent substantial price increases - indicating a shift to more fuel efficient rail. This will be an increasingly important factor in future. "Environmental factors - congestions, safety and emissions. These factors are becoming increasingly important, and are being controlled by commitments and legislation. "Overlapping memberships of regional organizations by member countries resulting in fragmented transport policies; "Slow substantive changes in national policies, legislation, rules and regulations and failure to take into account the provisions of the EAC Treaty and other efforts towards common transport policy; "Absence of effective monitoring mechanisms at the EAC, due to the lack of capacity of the Secretariat to follow up on adherence to agreed matters and timetables; "Lack of well-structured financing resources like dedicated railway funds that would ensure sustainable development of the sub-sector; "Domestic opposition to integration and sovereignty sentiments, with Governments unwilling to subordinate immediate national political interests to long-term regional economic goals; "Differences in laws relating to procedures for obtaining licenses, public service obligations, regulation of safety rules. "The current status is that respective railway safety regulators enforce provisions of the railways acts in each country in respect of track and equipment condition, operating procedures, including speed restrictions. The process by which trains cross borders is cumbersome and requires switching of train crews and application of different safety and inspection procedures. A safety regulator covering all the countries would allow the operation of seamless train services between the different systems with joint wagon safety inspections carried out at the points of departure (ports), rather than interchange points (borders). "
The project will be commence by June 2012 June and last for a couple of years. The anticipated costs of 1.8 million USD are will be used to harmonize the countries legal framework, investigate the feasibility of certain missing railway links and to establish a regional Railway Coordination Unit at EAC. This important study, will allow the member countries of EAC to develop and improve efficiency of the railway sector. The transportation sector in the region is unfortunately characterized by very high road transportation costs of bulk goods by trucks which impedes trade and inflate prices. We have also seen serious adverse impacts in the form deterioration of roads and air pollution. The EAC Railway Enhancement Project will contribute to lowering the transportation costs in the region. When the project is completed it will be enable a large scale shift of the transportation of bulk goods from roads to the cheaper railways. Lowering transportation costs and improving efficiency will significantly contribute to increased economic growth, enhanced trade and improved quality of life for the 133 million living in the region by reducing the cost of goods and services.
CHIRWA Mtchera Johannes - IPPF