July 26, 2019

What Is Happening With The Isaka-Kigali Railway?

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President John Pombe Magufuli receives President Kagame in Dar es Salaam last May

Rwanda this week put the final seal on the bilateral agreement with Tanzania that details a mechanism for the construction of the 532Km Standard Gauge Railway Project – which will be Rwanda’s first railway line.

On July 18, the framework agreement was published in the national gazette with a signature of President Paul Kagame, which essentially means Rwanda is ready to implement everything on paper.

The agreement was signed in Kigali on March 9 last year between Rwanda’s state minister in charge of Transport Jean de Dieu Uwihanganye and Tanzania’s minister of works, transport and communication Prof Makame Mbarawe.

Uwihanganye was last week dropped from cabinet, and appointed envoy to Singapore. A replacement has yet to be made, as the docket’s responsibilities fall back to the full Minister of Infrastructure, Claver Gatete.

With the publication of the agreement, we have an idea of what tools are in place to ensure the project succeeds – as countries usually drag feet on such large projects.

The Isaka-Kigali SGR has been in talk dating back to the early 2000, but little progress was made until the election of current Tanzanian President Dr John Pombe Magufuli in October 2015.

However, Rwanda was also planning another SRG route; the 2,935km Standard Gauge Railway (SGR) line from Mombasa port (Kenya) to Kigali via Kampala, Uganda.

But then, in mid 2017, signs began emerging of brewing trouble between Kigali and Kampala. Rwanda abandoned this route, and has focussed all its energy on Tanzania. Its from here that the March 2018 deal was hammered.

READ: Confirmed: Kampala-Kigali Railway Line Put Off Until Further Notice

The joint SGR project will cost $3.6 billion, of which of $2.3 billion for Tanzania’s section of 394 Km and $1.3 billion for the Rwandan section of 138 Km.

On the Tanzania side, construction on the part from Isaka-Keza inside Tanzania, has not started despite claims early last year that construction would start in December 2018.

While speaking in the Lower Chamber of Deputies in this past May, State Minister Uwihanganye informed the lawmakers of the progress of the construction.

He said works on the Dar Es Salaam-Morogoro (205 Km) was estimated at 45.9%; and Morogoro-Makutupora (336 Km) was at 7.12% and that the latest stage was search for money for the section Makutupora-Isaka (427 Km).

Uwihanganye was in Parliament to deliver a draft law approving the ratification of the SGR agreement.

Now, the agreement has been ratified in Rwanda with publication in the national gazette. No indication yet if Tanzania has.

What does the agreement say? First, it sets up a so called ‘Joint Technical Monitoring Committee’ (JTMC), which includes 5 technocrats from each of the governments.

Tanzania will build its SGR to Isaka, and the Rwanda will come onboard to push the line to its border, and then finance it alone to Kigali and other towns in Rwanda. At least that is the plan

The other is step is that Rwandan and Tanzanian line-ministers are required to meet twice a year to “review progress” on a range of aspects; funding, policy and regulations.

The permament secretaries of the line-ministries, who are the accounting officers, are required to meet one every three months to look at what the JTMC technocrats have done because the experts are supposed to meet regularly.

The agreement also highlights how funding for the project will be got, and what each government will do. However, the agreement gives three ways of financing, which are yet to be adopted.

Each country is supposed to find funding for the portion of the SGR on its territory, meaning Rwanda has to look for the money for the section inside its borders.

However, the agreement also leaves open the possibility to look for financing jointly as Tanzania and Rwanda.

In case of disagreements arising between the two on any issue, Kigali and Dar es Salaam agreed that disputes will be “amicably” resolved “through negotiations”.

But in case they cant agree, the only other instance the agrieved party can go to is the East African Court of Justice (EACJ), based in Arusha, Tanzania.

It is unclear how many meetings the two sides have have been held by officials from either side since January this year. What is clear now, is that with Rwanda ratifying the agreement, it could set in motion increased activity.

Less than 30% of Rwandan imports now go through Mombasa in Kenya, according data available as of October last year, suggesting that after March 2019 when the Rwanda-Uganda stand-off began, the imports through Tanzania may have gone up further.

With Uganda currently considered a hostile neighbour, Kigali will do everything to wean itself from depending on the Kampala route.

Last week, the appointment Maj. Gen. Charles Karamba, a former Air Force Chief of Staff, as envoy to Tanzania, is latest clear sign that Tanzania is a key need for Rwanda.

READ: Kagame’s New Ambassadors Speak To Impending Gov’t Reshuffle

Maj Gen Karamba’s brief will surely indeed be fast-tracking the Isaka-Kigali Standard Gauge Railway Project.

Importers say they pay on average $4,990, to import a 20ft container while the sub-Saharan average is $2,504, which significantly affects Rwanda’s competitiveness in terms of cross-border trade. It makes commodities very expensive in Rwanda.

When completed, the Isaka-Kigali railway line is expected to improve trade between the two countries by making it easier and more cost effective for people and cargo to move across the common border.

From the capital Kigali, work on Rwanda’s SGR section will continue without stopping to Bugesera International Airport, currently under construction, about 30km away from Kigali.

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