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Transport: Riding the rails in Ethiopia and Kenya

By Elissa Jobson in Addis Ababa and Marshall Van Valen
Posted on Tuesday, 25 March 2014 11:08

At Meskel Square, in the heart of Addis Ababa, traffic is even more chaotic than usual as cars, buses and pedestrians weave around the 5.5m-high pillars now straddling an eight-lane highway.

Confusion reigns too at Mexico Square to the west and Megenagna round-about to the east – evidence that work on the city’s light rail transit (LRT) system is progressing at a phenomenal pace.

Bringing in the resources from the rural areas for processing is a problem. Part of that is transportation costs being high

East Africa is home to a series of promising rail projects, from Kenya’s standard gauge line to the railroad linking the Ethiopian capital to the port of Djibouti.

Ethiopia’s projects are far more advanced – they benefit from the wholesale support of the government – while Kenya’s are lagging behind.

The railway to link South Sudan to the port at Lamu lacks investment, and the development of the new standard gauge line is bogged down in debates about how the contract was awarded.

In Ethiopia, two twin-track lines will bisect Addis Ababa north to south and east to west, diving underground along certain sections and, as in Meskel Square, rising up high on elevated tracks.

Trains will run for up to 18 hours per day at intervals of three to six minutes at peak times and will be able to carry a maximum of 60,000 passengers per hour.

With journey times from the periphery slashed by up to two-thirds, the LRT has the potential to revolutionise transportation in this fast-growing city.

“Ground was broken on 31 January 2012 and the first trains are expected to start running on 1 January 2015,” says project manager Behailu Sintayehu, adding that 52% of the construction has been completed so far.

More than 3,000 Ethiopian labourers and engineers, overseen by the main contractor China Railway Engineering Corporation (CREC), are working in shifts around the clock to meet the ambitious deadline.

Networking the country

This first phase of the LRT scheme is expected to cost $475m, with 85% of the financing in the form of a loan from China Export-Import Bank.

The Ethiopian government is funding the remainder. A second phase, which will double the length of the track and reach further into the city’s suburbs, is also planned.

Aside from the Addis Ababa mass transit system, the Ethiopian Railways Corporation (ERC) – the body charged with realising the government’s bold rail strategy – has also begun construction of a 5,000km network that will criss-cross the country, stretching into almost every area of Ethiopia.

“The main purpose of the national network is to connect Ethiopia economically and increase access for imports and exports,” explains Abebe Miheretu, head of information and public relations at the ERC.

The routes will link the country’s main productive centres, allowing for the swifter transport of commodities such as sugar, charcoal, potash and coffee, he continues. They will also extend to the borders with Djibouti, Sudan, South Sudan and Kenya.

Henok Assefa, managing partner of Precise Consult International in Addis Ababa, is convinced of the economic benefits of the rail network.

“Part of the poverty that we have in Ethiopia is a direct consequence of the unintegrated nature of the country,” he says. “Bringing in the resources from the rural areas for processing is a problem. Part of that is transportation costs being high.”

The majority of goods entering and leaving this landlocked country travel by road to and from Djibouti. It is an expensive and time-consuming journey that, according to some manufacturers, can cost up to $4,000 per container.

“For a country that is looking to grow richer by light manufacturing, where margins are very low, you need to be doing volumes and railways become a very handy instrument,” says Henok.

Ethiopia thinks ahead

As a result, the ERC’s priority is the line from Addis Ababa to the port of Djibouti. The government awarded this contract to CREC and China Civil Engineering Construction Company, and so far around 25% of the project has been completed.

The government is using the first phase of construction of both the LRT and the national rail network to build capacity for domestic industries.

Contractors conduct training for local staff and the Institute of Technology has opened at Addis Ababa University specialising in engineering. The government is sending promising undergraduates to Russia, India and China to continue their education.

The government hopes that the second phases of the LRT and rail network projects will be carried out entirely by Ethiopian enterprises, says Abebe.

Amid two parliamentary investigations and a court case against the contract for the standard gauge line that will link Nairobi and Mombasa, Kenya’s rail projects have been slow to develop.

In November 2013, President Uhuru Kenyatta laid the first stone for the new line, which will compete with the colonial-era narrow gauge line managed by Rift Valley Railways.

The company is doubling its number of locomotives this year, but the long-term viability of its concession is now in doubt.

China Export-Import Bank has agreed in principle to provide 85% of the finance for the standard gauge line, which estimates put at a cost of $5.3bn.

However, transport principal secretary Nduva Muli told the Public Investments Committee in early February that the cost of the project had not been agreed and the finance deal had not been signed.

The first phase will cover 500km, while the second phase would link the line to the Ugandan capital of Kampala. Work is expected to begin in July of this year and last four years.

The government started the process of buying up land along the railway’s proposed path in February.

The Nairobi government says that the project will be beneficial because it will reduce freight costs from $0.20 per tn/km to $0.08 per tn/km.

In late January, Kenyatta said “the standard-gauge railway must and will go ahead for us to achieve our development agenda,” and said that critics are sore losers who lost out on the contract.

China controversy

The Chinese and Kenyan governments signed a state-to-state contract that includes a provision that China Road and Bridge Corporation (CRBC) will carry out the work.

Groups opposed to the deal say that there are no provisions in the constitution for single-sourced deals like this one and point to the fact that the World Bank banned the company from participating in its bids due to corruption involved with a contract in the Philippines.

Critics also argue that the deal allows CRBC to conduct the feasibility studies, so there is no independent oversight on costs, which they say are inflated and more expensive per kilometre than its Ethiopian counterpart.

The authorities say the deal is structured like this because the previous government under President Mwai Kibaki had shopped around for financiers and found Beijing to be the only party interested.

With China Merchants Holdings having signed a deal with the Tanzanian government in May 2013 to build a port, special economic zone and railroad network at Bagamoyo, competition in East Africa’s transportation and other sectors is heating up.

The Ugandan government has now agreed to build a pipeline through Kenya that could terminate at the new port under construction at Lamu, in northern Kenya.

Both the Kenyan and Ethiopian governments would like to serve as South Sudan’s access route to the coast, so being the first across the finishing line is crucial for wooing the Juba government.

The ports at Bagamoyo and Mombasa can both attract trade from Rwanda and the Democratic Republic of Congo, providing East Africa with some of the continent’s densest rail networks. ●

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