East African Business Week

A regional inter-governmental task-force has warned that East Africa risks lagging behind unless it develops it regional transport corridors and supports infrastructure projects over the next five years.
 According to a new landmark study dubbed Corridor Diagnostic Study (CDS) of the Northern and Central Corridor of East Africa, conducted by the regional inter-governmental task-force, transport corridors in East Africa are presently performing "fairly" based on comparisons with other international corridors.
 
East Africa boasts of two transport corridors, the Northern and Central corridors. The Northern Corridor which is one of the most strategic commercial and humanitarian routes in Africa, stretches more than 1,500km, linking the Port of Mombasa in Kenya to the Great Lakes countries of Uganda, Rwanda, Burundi and the Democratic Republic of Congo, with links to Northern Tanzania, Southern Sudan, Ethiopia and Somalia.
 The Central Corridor on the other hand is shared between Tanzania, Burundi, Rwanda, Uganda and the Democratic Republic of Congo.
 Citing the key Mombasa and Dar es Salaam ports, the study said berth and yard congestion in the ports and the lack of customs clearance coordination contribute to excessive dwell times of up to 9 days in Mombasa and 12 days in Dar es Salaam.
 The study, which includes intensive interviews with stakeholders such as shippers, transport service providers, freight providers, and government ministries, regulatory and custom departments particularly, gives a bad account of the regional road network, the most common way of transport in East Africa and rail.
 "Road transport costs are high due to lack of backhauls and poor road conditions. On the Northern Corridor, high informal payments are a significant component of total costs," notes the study in part.
 It adds: "Rail service, while improving is still unreliable service especially at transfer points and locomotive exchange points. Rail rates are not necessarily cost based but are priced just below road transport as rail does not have current surplus capacity."
On the operations nature of the corridors, the taskforce notes that lack of risk management results in longer delays at border crossings.
 "Extra inventory costs due to delays and inefficiencies in the corridors have a significant impact on the total costs of the goods, accounting for 10-25 percent of the total logistics cost," it said.
 In Kenya, the report notes that vehicles licensed for transit cannot carry domestic cargo and must use prescribed transit routes.
 This, it said, has the effect of many return trips being empty. Similarly in Tanzania, the Revenue Authority licenses trucks for transit or domestic with the same negative effect.
 The findings of the report will be presented at an upcoming high-level conference on the development and launch of the North-South Corridor (NSC) scheduled for the Kenyan capital Nairobi on September 28 and29.
 The conference to be officially opened by Kenyan President Mwai Kibaki will be attended by officials from all the regional trading blocs including COMESA, EAC and SADC. It is being supported by TradeMark East Africa.
 Under direction of the Tripartite, the conference will seek to avail resources to develop a list of bankable projects for infrastructure investments in East Africa in the areas of roads, railways, inland waterways, ports, pipelines and power generation and transmission at an estimated cost US $ 4.2 billion.