Rais Jakaya Mrisho Kikwete akifungua Kongamano linalohusu Mkakati wa Kimataifa wa Kuboresha Miundombinu katika Ukanda wa Kati (Central Transport Corridor) katika ukumbi wa mikutano wa kimataifa wa Mwalimu Nyerere jijini Dar es salaam leo April 15, 2014
SPEECH BY H.E. JAKAYA MRISHO KIKWETE, PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA, DURING THE WORLD ECONOMIC FORUM’S ALIGNMENT MEETING ON DEVELOPMENT OF CENTRAL CORRIDOR HELD IN DAR ES SALAAM, TANZANIA, ON 15TH APRIL, 2014
Hon. Dr. Harrison Mwakyembe, Minister for Transport, United Republic of Tanzania;
Hon. Prof. Silas Lwakabamba, Minister for Infrastructure, Republic of Rwanda;
Hon. Eng. Virginie CIZA, Minister for Transport, Public Works and Equipment, Republic of Burundi;
Hon. Justin Kalumba MWANA NGONGO, Minister for Transport and Water Ways, Democratic Republic of Congo;
Hon. Eng. Abraham Byandala, Minister for Transport and Works, Republic of Uganda;
Dr. Donald Kaberuka, President of the African Development Bank;
Dr. Richard Sezibera, Secretary General of the East African Community;
Dr. Stogomena Tax, Executive Secretary of SADC;
Dr. Ibrahim A. Mayaki, President, NEPAD Agency;
Mr. Philippe Dongier, World Bank Country Director for Tanzania, Uganda and Burundi;
Distinguished Guests;
Ladies and Gentlemen;
It is a pleasure for me to welcome you all to Tanzania and Dar es Salaam. I thank the organizers for affording this rare opportunity to speak at this all important World Economic Forum Alignment Meeting on Development of the Central Corridor.
This meeting could not have been organized at a better time, than this. As a matter of fact such people of this region have been waiting for this type of action for a long time. Besides that, this meeting is part of the preparations for the World Economic Forum for Africa meeting scheduled for 7th to 9th May, 2014. The work of this meeting will therefore have a special significance to the implementation of the Priority Action Plan of Programme for Infrastructure Development in Africa (PIDA) which has its roots from the World Economic Forum in Africa held in Addis-Ababa, from 9th to 11th May, 2012.
It is gratifying to see high level participation of four important institutions among us: the EAC, SADC the AfDB, the NEPAD Agency and the World Bank. It is heartwarming indeed, to have you with us because you are critical factor on the success of the agenda at hand. We look forward to your continued involvement until we reach the objectives of this initiative.
From WEF Addis Ababa to WEF Abuja: Private Sector and
African Infrastructure Development
Distinguished Delegates;
The 2012 World Economic Forum for Africa was a turning point with regard to how we approach the question of development of infrastructure in Africa. It came to our awareness and realization that we need to bring in Private Sector in infrastructure development in Africa. Such a perspective had not been embraced before by governments in Africa, with each one trying to shoulder the cost alone.
I commend the joint-initiative of the WEF, the AfDB, the AU Commission and NEPAD (New Partnership for Africa’s Development) for taking forward the agenda. As a follow up, an African Strategic Infrastructure Initiative (ASII) was formally launched in Johannesburg on the 9th of July, 2012, with the formation of the Business Working Group (BWG), a platform for African infrastructure development strategies and initiatives.
I am pleased with the work of the Business Working Group for identifying projects with high potential for short-term acceleration. I am particularly delighted with the choice of the Central Corridor in this regard. I also thank you for affording my country the honour of preparing a Wider Concept Note on the development of the Central Corridor.
Importance of the Transport Corridors
Distinguished Delegates;
The importance of transport corridors as game changers for regional growth and development need not be over-emphasized. Studies after studies have concluded that many landlocked developing countries are among the poorest in the world. It is said, out of 31 such countries, 16 are classified as least developed and half of these are in Africa.
These countries are said to be penalized annually by 1.5 percent reduction in average growth compared to coastal states by simply being landlocked. It goes without saying that: growth of landlocked countries depends on the growth of the coastal countries. That implies the ability of the coastal countries to put in place infrastructure for trade facilitation, as a pre-requisite for development of the land locked countries.
Distinguished Delegates;
The coastal states have never fallen short of good will in facilitating the landlocked countries. They have been putting in place supportive infrastructure because they too, are primary and secondary beneficiaries of such infrastructure. It is the difficulties of raising financing of these infrastructures that has been holding back coastal states particularly the Least Developed Countries, from rising to challenge effectively.
Efforts to exploit joint regional financing mechanisms has also proven unsuccessful. Experience has shown that it is easier to arrange investment for national infrastructure than for regional ones. Our experience on the ongoing construction of 11,174 kilometers of road to tarmac level serves as a good lesson. It is for this reason that, we welcome this approach of partnering with the private sector for regional infrastructure development.
Status of Central Corridors
Distinguished Delegates;
The Central Corridor is located at the strategic geographical position which makes it a natural choice as a major trade route for countries of the Eastern and Central African regions. Indeed, for many decades the Dar-es-Salaam Port, Tanzania’s roads and railways have served the neighboring countries of Uganda, Rwanda, Burundi and the Democratic Republic of Congo (DRC).
Economies of countries served by this corridor have shown strong GDP growth rates of between 4 and 8 percent. Transit demand is forecasted to increase from 2.7 million to 9.8 million tons by 2030. The Dar es Salaam port captures 14 percent of imports and exports of these countries. As a result the throughput at the port has increased from 7.4 million tons in 2007 to 13 million tons by December 2013.
The Central Corridor also enjoys one of the best roads in East Africa. The Dar es Salaam-Rusumo/Kabanga and Dar es Salaam-Mutukula (at the borders of Rwanda/Burundi and Uganda respectively) are fully paved. The presence of these routes makes the Central Corridor a competitive option for cross border trade through the Port of Dar es Salaam.
Distinguished Delegates;
Rwanda and Burundi are connected to the Port of Dar es Salaam by the Central Corridor that consists of several routes. These routes include an all-road unimodal option from Dar es Salaam to Bujumbura and Kigali. Alternatively, cargo flows along the intermodal routes made up of rail from Dar es Salaam to Isaka then trans-shipped to Kigali and Bujumbura. Rwanda and Burundi are now working together with Tanzania to extend the central railway line from Isaka to Kigali on wards to Keza – Musongati in Burundi.
The Republic of Burundi has discovered enormous deposits of nickel. The corridor is about to transport more volumes of heavy minerals within the coming two to three years. Our neighbor Burundi may in the coming 2 or 3 years start exporting between 1.5 million tons to 3 million tons of nickel concentrates a year. In the same development, we expect two nickel mines in Tanzania (Kabanga and Dutwa) to be operational in the same time span. It is likely that nickel processing would require importation of huge volumes of sulphur per annum. All these volumes are expected to pass through the Central Corridor.
Challenges Facing Central Corridor
Distinguished Delegates;
Despite the great potentials and opportunities presented by the Central Corridor, all is not rosy in terms of both effectiveness and efficiency. Transport inefficiencies in this region, have contributed to prohibitively high transport costs, and impede the region’s ambition to realize its overall vision for socio-economic development.
The design capacity of the Tanzania Railway Limited (TRL) line is to move traffic of about 5million tons per year. Unfortunately, this capacity has never been achieved as the maximum capacity reached so far is only 1.4 million tons of cargo moved by train as the performance record in 2002. While there are prospects of transit cargo to double up within the coming few years, as the region braces itself to start exporting millions of tons of copper and nickel a year, the existing 2,707 kilometers Central railway, cannot in its present condition cope with the growing volume of cargo along the central corridor.
Distinguished Delegates;
Rais Jakaya Mrisho Kikwete akifungua Kongamano linalohusu Mkakati wa Kimataifa wa Kuboresha Miundombinu katika Ukanda wa Kati (Central Transport Corridor) katika ukumbi wa mikutano wa kimataifa wa Mwalimu Nyerere jijini Dar es salaam leo April 15, 2014
It suffices to say, both our roads and the central railway line lead to the Port of Dar es salaam needs a turn around. It needs refurbishing. We still need to expand our berth capacity, modernize our cargo handling facilities as well as procedure to cope with the growing volume of throughput. We have indeed embarked on the exercise, but in a limited way by using our yearly budgetary allocations and development partners’ support. Thanks to the World Bank, the AfDB and JICA. Apart from the measures we have so far taken to enhance port efficiency, reliability and security. We thank to Trade Mark East Africa, DFID and the World Bank for the continued support to improve port efficiency.
Efforts Undertaken by Tanzania to Improve the
Central Corridors
Distinguished Delegates;
Tanzania has continued to fulfill her regional responsibility to our landlocked neighbors, and international obligations under the Almaty Programme of Action. There are number of efforts we have put in place which are short and long-term plans. Our short-term plan is to rehabilitate the railway line by reinforcing its formation, strengthening its bridges, removing lighter, old, worn out rails, fasteners, sleepers and installing new heavier rails, sleepers and ballast. We have so far done almost 600 kilometers. Thanks to the World Bank and JICA.
We have continued to make available our Dar es Salaam Port as an export and import gateway for the landlocked countries of Rwanda, Burundi, Uganda, Zambia, Malawi and the DRC. Some of the initiatives which are underway includes;
a) Dredging of the Dar es Salaam port entrance channel;
b) Construction of Berths 13 and 14;
c) Strengthening and deepening of Berths 1-7;
d) Development of the Roll on – Roll off (RO-RO) Berth at the Dar port;
e) Plan to develop Kisarawe Freight Station with intention to decongest container traffic at the Dar port and development of new port at Bagamoyo among others.
The government decided to give due weight to these initiatives through mainstreaming them in the Big Results Now (BRN) Port Initiatives, with the aim to ensure their timely implementation. We have earmarked to increase throughput of the Dar es Salaam Port from the current 13 million tons per annum to about 18 million tons annually by end of 2015. Furthermore, it is targeted to reduce time taken by a truck to transport a transit container from the Dar es Salaam Port to the borders of Burundi and Rwanda to 2½ days from the current 3½ days by the end of 2015.
Distinguished Delegates;
But these short-term measures will not enable us to service a growing regional economy effectively and efficiently. The Dar es Salaam Port for example, currently handles 13 million tons of freight per year but hardly 2 percent of the freight is carried on rails, the rest is transported by trucks, drastically shortening the lifespan of most of our paved roads.
It is against this background that we came up with a long-term plan or strategy to upgrade the central line to standard gauge. Part of the line i.e. Dar es Salaam – Isaka – Keza – Kigali/Gitega – Musongati (1,591 kilometers long), is a joint project by Tanzania, Rwanda and Burundi. It is estimated to cost us a minimum of USD 4.13 billion. We have jointly done all the preliminary studies. With the completion of the detailed study recently, we are now on procurement of Transaction Advisor. Thanks to the AfDB for its support.
Tanzania and Burundi have also a bilateral arrangement to construct a 200 kilometers standard gauge railway between Uvinza in Tanzania and Musongati in Burundi expected to cost us USD 550 million.
Private Sector and Central Corridor
Distinguished delegates;
The central corridor projects I have briefly narrated cannot be successfully implemented within the context of the traditional method of financing infrastructure development. Government financing alone may not easily raise all the money required. We do not have the money nor can we easily get someone to lend us so much money. We have tried this option over the years without much success.
It is time we encouraged further private sector participation. It remains an alternative and viable option to minimize the public financing gap in infrastructure development. I have vested my hopes in this meeting which I believe will take us to the next level in terms of unlocking private sector funding, identifying cross-border regulation gaps and building private-public sector confidence.
Distinguished Delegates;
Rais Jakaya Mrisho Kikwete katika picha ya pamoja na wajumbe wa Kongamano linalohusu Mkakati wa Kimataifa wa Kuboresha Miundombinu katika Ukanda wa Kati (Central Transport Corridor) baada ya kulifungua katika ukumbi wa mikutano wa kimataifa wa Mwalimu Nyerere jijini Dar es salaam leo April 15, 2014
It is befitting that this alignment meeting is taking place at this point in time. We have undertaken to put in place conducive environment to facilitate private sector to join our efforts. The government has put in place the National Public-Private Partnership (PPP) Policy in 2009, in 2010 we enacted the Public-Private Partnership Act, Cap 403 and Regulations in 2011. In addition, feasibility studies have been undertaken while various identified PPP projects have been advertized for private sector to show interest. We will continue to work together with our Central Corridor member states in soliciting funds to invest in the key transport infrastructure projects along the corridor.
The Government, in partnership with the OECD and NEPAD, undertook a review of its investment policies to support the national strategy for economic reform and improve the business climate to attract more investment in key sectors, such as infrastructure and agriculture. The review was launched on 31st January, 2014 and will be used to update all investment policies; and continue with implementation of Government Roadmap on the Improvement of the Investment Climate by undertaking administrative measures with very limited cost implications while reducing hurdles of significant costs to local and foreign investors. These measures go along with automated and electronic payment systems that minimize human interference and discretionary powers.
Way Forward
Distinguished Delegates;
I am optimistic that the groundwork we have undertaken as a region for the implementation of the Central Corridor Infrastructure projects through public private sector cooperation have caught the attention of the international business community. I thank the WEF in collaboration with the AfDB, the AU Commission and NEPAD for championing this noble cause for Africa’s economic development. As corridor member states with a lot to gain from improved inter and intra-regional trade, let us continue to plan, discuss, decide and implement together our infrastructure development projects. Our numbers would always attract the attention of serious investors.
Conclusion
Distinguished Delegates;
I am optimistic that our regional efforts to implement the Central Corridor Infrastructure projects through public private partnership is now at a point of take-off and definitely will bear good results in the very near future. We believe that WEF strategies under this new model of Central Corridor to be the African pilot project for accelerating investments will support the current potential infrastructure projects along the corridor to secure strategic investors soon. What I wish to share with our colleagues from the Corridor member states is to continue working together under these efforts so as to achieve the expected regional investment goals. Everything is possible if we plan, discuss, decide and implement together.
This is the opportunity for our governments to interact with other stakeholders including the private sector, with a view to coming up with a programme of action for the development of the central transport corridor.
To conclude my remarks, I have taken note of the fact that you have a rather long and demanding agenda in front of you and, for that reason, I wouldn’t like to keep you any longer than necessary. It is therefore my singular honour and pleasure to wish you a very fruitful meeting and to declare that the Alignment meeting on the Central Corridor is now opened.