In 2009, Canadian consultants CPCS produced the East Africa Railways Master Plan Study, on behalf of the East African Community (EAC). This was a significant step forward in the development of the East African Railway network, as it helped crystallise the debate over its proposed development and the benefits which this could offer.

The existing transport infrastructure is shown on the map. This is of very poor quality which has obvious implications for landlocked Rwanda and Burundi. In order for either of these countries to access international markets, they have to use a combination of trains, boats and motorised vehicles to access the port at Dar es Salaam (using the Central Corridor, which is shown in purple) or the port at Mombasa (using the Northern Corridor, which is shown in red). Significant physical difficulties, time consuming customs controls and varied regulations compound the issues.

Click here to view map.

The 2009 Master Plan Study made a number of recommendations, including:

  • railways can be major contributors to the development of East Africa
  • with investment, the existing narrow gauge network can meet this demand for the next 20 to 30 years, although wider track gauge would have some direct benefits but the investment costs are high
  • conversion to electric traction is uneconomical
  • a range of legal and institutional measures are required to promote the implementation of the master plan
  • attention to environmentally sensitive zones will be required especially for new lengths of track
  • the improved infrastructure would yield significant benefits
  • the rail network should be expanded to meet the needs of the growing economy of East Africa

The EAC has now received a grant from the NEPAD Infrastructure Project Preparation Facility towards the costs of implementing various components of the East African Railways Master Plan. To give a flavour of EAC’s intentions, it is intended to improve transport links along the central corridor from Burundi and Rwanda through Tanzania to the port at Dar es Salaam by developing new track and rehabilitating some exiting track. Integral to this is a new rail authority, the East Africa Railway Authority.

This project will present various technical challenges as well as a number of commercial and regulatory issues. Some of the commercial and regulatory issues are referred to below.

Structure and regulation

The indications are that the project would be let as a PPP (or a number of PPPs) and that there will be some form of project financing. The project crosses a number of countries and a key issue will therefore be how it is structured. Options include:

  • a unified scheme let by a single body
  • a series of separate national schemes each let by the relevant state organisation
  • a Tanzania – Burundi scheme and a Tanzania – Rwanda scheme

Separation may be workable and may deliver the infrastructure more quickly but certain issues would need to be settled in advance. For example, the separate networks would need to be built to common standards in order to avoid any interoperability issues. Also, as each component of the scheme relies on other components, the contractors and funders would be concerned about the delivery of the other parts of the scheme and reluctant to take any revenue risk. Even if the scheme is delivered on a unified basis, revenue risk may be a step too far.

The three effected countries signed a Memorandum of Understanding in 2009 which implies separation but with Rwanda having a coordination role. However, given the nature of the scheme, it would seem preferable for it to be delivered as a unified scheme by a single regional body acting with the authority of the constituent members and the necessary funding.

A related issue is how the scheme is to be regulated. Logic suggests that this should follow the structure although this is not necessarily essential.

Maintenance and operation of the infrastructure

The developers of the scheme would have to think about how it is to be maintained and operated. If a PPP structure is to be adopted, then it is likely that the infrastructure would be developed by the private sector with the private sector recouping its investment over a period. In this scenario, it is likely that the private sector would have a role in the maintenance of the infrastructure. It might (or might not) have a role in its operation too (e.g. granting access, timetabling and signalling). However, this is not essential as some or all of these tasks could be undertaken by somebody else (such as the East African Railway Authority). Depending on how the scheme is to be financed, a key issue to consider could be tariff control (i.e. the level of the access charges).

Train operation and rolling stock

The infrastructure is intended to be for freight and passenger railways. Freight railways are generally provided on an open access basis (i.e. without any agreement with the East African Railway Authority). The open access operators would in all likelihood provide their own rolling stock and enter into an access agreement to run the trains.

Passenger services are more likely to be operated on a concession basis as they are generally not viable without some public sector support. The concession agreement would address issues such as payments to the train operator (or to the East African Railway Authority), services to be provided and fare levels.

Given the time bounded nature of concessions, passenger operators might not provide their own rolling stock. Instead, rolling stock might be provided by the East African Railway Authority or leased from a rolling stock provider.

Given that the East African Railway Authority would want to ensure the continuity of services at the end of the concession thought would need to be given to the handover arrangements.

Other issues

Once the fundamental parameters have been resolved there will be a range of other issues to consider including safety, performance issues, governing law, customs issues, land acquisition and environmental issues.