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Importance of Rail

US / AFRICA WORKSHOP “DEVELOPING SUSTAINABLE TRANSPORTATION SYSTEMS 26 – 27 August, Arusha , Tanzania PRESENTATION ON RAIL ISSUES IN TRANSSHIPMENT SMAK KAOMBWE PROJECT MANAGER CENTRAL DEVELOPMENT CORRIDOR. Importance of Rail. Typical Logistics Chains for Trade: Sea – Port – Rail – Road

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Importance of Rail

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  1. US / AFRICA WORKSHOP“DEVELOPING SUSTAINABLE TRANSPORTATION SYSTEMS26 – 27 August, Arusha, Tanzania PRESENTATION ON RAIL ISSUES IN TRANSSHIPMENT SMAK KAOMBWE PROJECT MANAGER CENTRAL DEVELOPMENT CORRIDOR

  2. Importance of Rail • Typical Logistics Chains for Trade: • Sea – Port – Rail – Road • Sea – Port – Road • Sea – Port - Rail – Inland waterways – Rail – Road • Key means of passenger transport • Long distance (Inter – Urban) • Urban

  3. Importance of Rail (Contd) • Advantages of Rail to Road: • Structurally more economical especially for long distance (over 400klm) and bulk traffic • More environmental friendly (less fuel use, less pollution) • Less spread of HV/AIDS compared to road corridors

  4. Status • Rail carries far less traffic (Now about or less than 10% of traffic of transit and long distance traffic through EA ports) • Assets depleted and sub optimal performance

  5. ImpacDirect cost (charges paid)Indirect cost (reliability, predictability, transit times, real time cargo tracking)t • Economies suffering • Too high direct costs (Road carries 90 % traffic at $0.11 per ton-klm compared to average $0.06 for rail) • Also too high indirect cost (reliability, transit times, predictability, real time cargo tracking) • Significant contributor to high cost of doing business constraining investment and economic growth (and winning war o combat poverty)

  6. Example causes to cost of doing business

  7. Reasons and challenges • Rail carries far less traffic (Now about or less than 10% of traffic through EA ports) • KRC 3.5 mil tonnes (1990s) - less than 2.0 mil (2005) • TRC 1.56 mil (2003) – 0.814 Mil (2006) • TAZARA: over 1 mil (1993) – 0.540 (2007)

  8. Reasons and challenges (Contd) • Systems dilapidation and assets depletion (some aspects of technology obsolete) • Limited coverage and connectivity • Inefficiency (technical, operational management and governance) • Lowering of cost (some US rail achieve $0.015 per ton-klm compared to EA average $0.06 per ton-klm)

  9. What needs to be done • Improve governance structure and management away from “bureaucracy based” to “business discipline based” • Modernise • Expand and ensure regional connectivity • Ensure maintenance and future sustainability

  10. Actions being taken and plans • Concessioning of railways (eg Kenya, Uganda an Tanzania) typically to address governance, management, maintenance and efficiency issues • Some investment (associated with concessioning) to stop decline and reverse trend • Projects and plans for modernisation and expansion on going (EAC Railways Master Plan and other specific feasibility studies)

  11. Key future challenges • Financing to implement plans • Traditional sources from public and donor resources too limited • Massive effort to attract private capital (Sub Sahara Africa reportedly gets very small proportion, less than 1%, of available substantial private sector based financing) • Sustaining governance reforms to ensure innovation and efficiency

  12. Going forward • Consolidate concessioning & governance reforms to build strong PPP (of public sector strength in strategic development and private sector strength in innovation and business growth) • Improve capacity to design and implement major projects through PPPs • Strengthen regional institutions to ensure rail connectivity and regional harmonisation • Further improve conditions to attract large needed investment for more prosperous future generations

  13. Going forward • Consolidate concessioning and governance reforms to build strong PPP (to combine public sector strength in strategic development and private sector strength in innovation and business growth) • Improve capacity to design and implement major projects through PPPs • Further improve conditions to attract very large investment needed in rail development for more prosperous future generations

  14. ASANTE SANA

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