Report cites potential for EAC to save transport costs
18 September 2012
IPP Media: The East African business community will be able to save on transport costs by $1.9bn by 2015 if the East African Community (EAC) Partner States rehabilitate northern and central corridors, according a new report released by a United States consultancy firm.
However, the rehabilitation requires the partner states to implement projects at a cost of $4.1bn to increase road capacity and rehabilitate the road surface that reduces congestion and vehicle operating costs, according to a diagnostic study report of the two corridors by Nathan Associates Inc of USA.
It says reduced costs savings of $1.9bn by 2015 corresponds to an average reduction in transport costs of 28%.
“Due to the larger volumes and longer average distances, the Northern Corridor accounts for about three-quarters of the total transport cost savings with cost reduction of $ 1.4 billion while the Central Corridor will have annual transport cost savings of $ 0.4 billion by 2015,” says the report submitted to the EAC secretariat recently.
The report proposes an action plan of 27 transport infrastructure projects to be implemented within the next five years at a total cost of $ 4.1bn.
It anticipates that 21 of the 27 projects could be implemented under a public private partnerships arrangement with varying degrees of private sector participation.
“Of the 27 infrastructure projects, 13 are in the Central Corridor with a total cost of $ 2.1bn while there are 14 proposed projects for the Northern Corridor with a total cost of $ 2.0bn,” it says.