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World Bank Document ReportNo. 8694-AFR Africa The Great LakesCorridor Study March, 1990 Public Disclosure Authorized InfrastructureDivision AfricaTechnical Department FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Docwnentof the Word Bank Thisdocument has a restricteddistribution and may be usedby recipients Public Disclosure Authorized only in the performanceof theirofficial duties.Its contentsmay not otherwise be disclosedwithout World Bankauthorization. GLOSSARY OF TERMS AND ABBREVIATIONS AMI Agence Maritime Internationale (Belgian-owned forwarding and clearing company) BELBASE Former Belgian concessions at Dar es Salaam and Kigoma B/L Bill of Lading BNR Banque Nationale du Rwanda CIF Cost, Insurance and Freight C/F Clearing and Forwarding CMB Coffee Marketing Board (Uganda) CORWACO Private Rwandese trucking company DSM Dar es Salaam ECA Economic Commission for Africa EEC European Economic Community ESA Equivalent Standard Axle FOB Free On Board F/E Foreign Exchange GVW Gross Vehicle Weight ICD Inland Clearance Depot KCHC Kenya Cargo Handling Company KPA Kenya Ports Authority KRC Kenya Railways Corporation L/C Letter of Credit Liberation War Overthrow of General Amin LLC Landlocked Country MAGERWA Rwandese warehousing company, joint public-private venture NCTA Northern Corridor Transit Agreement NRM National Resistance Movement ODA Overseas Development Administration (UK) OTRABU Burundian parastatal trucking company O/D Origin/Destination POL Petroleum, Oils and Lubricants PTA Preferential Trade Area RCTD Road Customs Transit Declaration SOCABU Burundian parastatal insurance company STIR Rwandese parastatal trucking company TC Transit Country THA Tanzania Harbors Authority Transocean Ugandan parastatal clearing and forwarding authority TRC Tanzania Railways Corporation URC Uganda Railways Corporation ZBR Zaire, Burundi and Rwanda THE GREAT IA S CORRIDR STUDY Table of Contents EXECUTIVE ',UMHARY . ... i I. INTRODtiCTION .... ......... *.......... 1 A. Purpose and Scope of the Study . B. Geo-Political Developments Since 1971 . .. C. The Transit Objectives of the Landlocked . 2 II. PRESENT TRANSIT ROUTES .... .. 3 A. Introduction .... .. 3 B. The Northern Corridor .... .. 3 Port of Mombasa . 4 Road Routes.. 4 Rail Routes.. 6 The Kenya Pipeline.. 7 Transport and Transit Operators . 7 C. The Central Corridor . 8 Port of Dar es Salaam .. 8 Rail/Lake Route via Kigoma .. 8 All-Road Route to ZBR .. 9 Isaka Rail/Road System .. 10 Rail/Lake Route via Mwanza .. 10 Transport and Transit Operators . 10 D. Potential New Transit Routes ..... ...... 11 Lake Transport: Kisumu-Kemondo Bay . 11 Lake-River Transport: Kisumu-Kagituma . 11 Rail Transport: Kampala-Kasese . 11 Rail Transport: Musoma-Tanga . 11 Road Route: Mwanza-Arusha-Mombasa . 11 E. Additional Investment Studies ..... ...... 12 III. TRAFFIC FLOWS.. ......... 12 A. Total Intern.tional Traffic ...... .. .. .. 12 B. Growth Trends in International Traffic . 13 C. Commodity Composition: International Trade . 14 Imports ........................... 14 Exports ........... .... .... 15 D. Distribution of Traffic by Mode and Corridor.15 E. Relative Importance of Transit Traffic . 17 Kenya . 17 Tanzania . 18 This Report was prepared on the basis of a World Bank Mission carried out in June and July 1988, headed by Mr. B. Chatelin (AFTIN) and comprising Mr. B. Bostrom (AF3IN), Mr. D. Havlicek (INUTD), Mr. Ngwenya (a consultant from PTA), and Messrs. S. Thomas and Wartel, Consultants. Further discussions were held in the Region during October and November 1989 as a follow up to the Draft Report. Mr. S. Thomas was responsible for the preparation of this Report. IV. MAJOR ISSUES WITHIN THE NORTHERN CORRIDOR. 19 A. Infrastructure . 19 GeneralConditions . .. 19 Specific Problemsi...... .. ...... 19 Potential Issues and Problems . 20 B. Movement Capacity and Efficiency . 21 Mombasa Port . .21 Kenya Railways . .23 Road Transport. .. *. *. 23 C. TransitRegulations.. .. ........ .*. 25 Northern Corridor Transit Agreement (NCTA) . 25 Transit Bonds . .25 SecurityRegulations ................... 26 V. MAJOR ISSUES WITHIN THE CENTRALCORRIDOR .. .28 A. Infrastructure . .. 28 Roads . * . * . * . 28 Rail ... .. 28 DSMPort ...... ............ 28 B. Movement and HandlingCapacit. .. .29 DSMPort . v.. .. 29 TRC. .. .. .. 30 Kigoma Port . .. ........ ... .32 C. Transit Systems for the Central Corridor . 32 The Transit Pass and Transit Formalities . 32 Belbase, Kigoma and AMI . .. 34 The Isaka System ... .35 VI. TRANSIT ISSUES WITHIN THE LLCs RWANDA. .. 36 A. Infrastructure .36 B. Government Intervention: Present Situation . 36 Road Transport Policy . ....... o. 36 Air Transport Policy . 41 Magerwa.. ..... * 41 National Bank of Rwanda (BNR) . 42 C. Government Intervention: Possible Extension .42 Extension of Road Transport Restrictions . 43 Rwanda Entrepot: Mombasa . 43 The Isaka Route . ... ... ... ... .. 44 VII. TRANSIT ISSUES WITHIN THE LLC: BURUNDI. 45 A. Infrastructure . 45 Present Transit Network .. 45 Planned Developments ..... ...... .. 46 B. National Transit Policies. .. .. .46 The Role of the Central Bank (BNB) . 46 Other Transport Policies . .. .. .... ..... 49 Coffee Marketing . .. .... 50 Supply of Petroleum Products ... .. 51 Customs Facilities . .. .. 53 VII. TRANSIT ISSUES WITHIN THE LLC: UGANDA 53 A. Introduction . 53 B. Traffic Direction ... 53 Mode Direction .... ....... 54 Route Direction . 55 Transocean . 56 C. Future Role for Uganda Railwas. .. .. 58 Development of Kenya Route . 58 Development of the DSK Route . .. .. 61 Overall Development Strategy . 62 D. International Trucking Capacity . 63 E. Transit Taxes ........ ... .. 64 IX. COSTS AND REVENUES IN THE TRANSIT SYSTEM . 65 A. Transit Costs to the LLC: Introduction . 65 B. Transit Costs to Burundi ........ ... ..... 65 Direct Transit Charges . 65 Indirect Transit Costs . 66 Total Transit Costs . 67 C. Transit Cost to Rwanda . .. 68 Direct Transit Costs . 68 Indirect Transit Costs . 69 Total Transit Costs . 69 D. Transit Cost to Uganda .... ..... 69 Direct Transit Costs .... ...... 70 Indirect Transit Costs .... ........ 70 Total Transit Costs . 71 E. Revenues to the Transit Countriest Introduction . 71 F. Transit Revenues to Kenya ... .... 72 G. Transit Revenues to Tanzania . .. 73 H. Transit Revenues to Burundi ... ...... 74 I. Transit Revenues to Rwanda . .... 74 J. Transit Revenues to Uganda ... .74 K. Transit Costs to the Transit Countries . ... 76 Background .. .. 76 Road Costs in East Africa .... 77 PTA Harmonization Initiative . 78 Recommendations . 79 X. FUTUREDISTRIBUTION OF TRANSIT TRAFFIC . 79 A. Routing Decisions . 79 Generalized Transit Costs . 80 Trade and Marketing Channels . .80 Private and Public Interests .. 81 Transit Security ... .81 B. Traffic Distribution 1995: Least Cost Assignment . 81 C. Traffic Distribution 1995: Study Scenario . 82 Import Traffic. 83 Export Traffic .. 84 D. Implications of Transit Routing Scenario . 85 Central Corriodr Routes .. 85 Dar es Salaam Port . ** . 86 Tanzanian Railways Corporation . 87 Northern Corridor Routes . 87 Mombasa Port ... 87 KlenryaRailways .. .88 XI. ISSUES AND POLICY CONSIDERATIONSs AGENDA FOR DISCUSSION . 88 A. SummarU of Findings ........ 8B Infrastructure . 88 Rail Transport . 89 Road Transport . .... 89 Ports. ................. 89 Transit Procedures . 90 B. Priority Issues . 91 C. Strategies and Priorities .i . 91 Transport Competition . 91 Regional Transit Cooperation . 93 D. Regional Framework for Bank Activities . 93 Bank Structure . 93 Bank Perspective . 94 Regional Policies . 95 ANNEXES Annex 1 Transit Routes (Kenya, Uganda, Rwanda, Burundi, Tanzania, Zaire) Annex 2 Burundi and Rwanda: Distribution of Imports (Corridor Analysis) Annex 3 Kenya Railways: Main Commodities to and from Uganda (1987) Annex 4 Uganda: Import and Export Traffic carried by Uganda Railways Annex 5 Mombasa Portt Transit Traffic (1984-1987) Annex 6 Central Corridor: Modal Split RoadlRail (1986, 1987) Annex 7 Central Corridor; Transit Traffic through D'Salaam Port (1986, 1987) Annex 8 Deliveries of ZBR and Uganda Import Cargo from DSM Port Annex 9 Transport Costs: Rwanda Annex 10 Mode Cost Analysis Annex 11 Containerization Annex 12 Review of the Status of Implementation of Bilateral and Multilateral Transit Agreements in the Central and Northern Corridors Annex 13 The Cost of Burundi Truck Protection Annex 14 Transit Tolls and Vehicle Regulations in East Africa: A Cost Related Approach MAP IBRD 21189: The Great Lakes Region--International Surface Transport Connections EXECUTIVESUMMARY Backgroundto the Study Internationaltransport-related trade costs are a seriousconstraint to the developmentof the landlockedcountries in Africa. The Bank, through its countrytransport investment programs, has assistedgenerally in the development of regional infrastructurebut has no specificpolicy toward regionaltransport development. This study defines the issues and policies required to develop a coherent internationaltransport-transit strategy for East-CentralAfrica and provides the regionalperspective for countryeconomists in the preparationof their projects and in their dialoguewith governments. The study assesses the regionalinfrastructure but focusesprimarily on transportoperations, the impact of governmentpolicies, and the responseof shippersand transporters.The study is not prescriptivebut presents the policy issues and options for further analysis and discussion. The landlockedcountries surrounding the Great Lakes of CentralAfrica -- Rwanda, Burundi, Uganda and the Ki-= Province of Zaire
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