China, east African leaders sign up for new rail link

NAIROBI Sun May 11, 2014 6:33am EDT

Rwanda's President Paul Kagame, Chinese Premier Li Keqiang, Kenya's President Uhuru Kenyatta, Uganda's President Yoweri Museveni and South Sudan's President Salva Kiir (L-R) pose for a photograph after the signing of the Standard Gauge Railway agreement at the State House in Nairobi May 11, 2014. REUTERS/Thomas Mukoya/Pool

Rwanda's President Paul Kagame, Chinese Premier Li Keqiang, Kenya's President Uhuru Kenyatta, Uganda's President Yoweri Museveni and South Sudan's President Salva Kiir (L-R) pose for a photograph after the signing of the Standard Gauge Railway agreement at the State House in Nairobi May 11, 2014.

Credit: Reuters/Thomas Mukoya/Pool

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NAIROBI (Reuters) - East African leaders and China formally signed agreements on Sunday for the construction of a new multi-billion dollar railway linking the Kenyan port of Mombasa to Nairobi and running on to neighboring states.

The deals were signed in Nairobi on the last stage of an Africa tour by Chinese Premier Li Keqiang, although Kenya's president, Uhuru Kenyatta, had already signed up to the deal during his state visit to Beijing last year.

"The costs of moving our people and our goods ... across our borders will fall sharply," Kenyatta told a news conference with the Chinese and African leaders on Sunday.

The new standard gauge line will supplement a slower narrow gauge network that now only runs to Uganda whereas the new line is designed to go on to Rwanda and South Sudan, part of an effort to cut the hefty costs of trade between east African nations which mainly rely on poor roads and the rickety narrow gauge line built in the 19th century.

Kenyatta has previously said the new railway will cut freight costs to 8 U.S. cents a metric ton (1.1023 tons) per km from 20 cents now.

China Road and Bridge Corporation, a subsidiary of China Communications Construction Company, has been appointed to construct the initial Kenyan leg of the new line, despite widespread criticism that there was no competitive tendering for the work.

Kenyan officials said there was no public bidding because that was a condition of securing Chinese financing but some lawmakers said the deal was overpriced.

Officials previously put the price for the railway from Mombasa to Kenya's western border with Uganda at 447.5 billion shillings ($5 billion), including financing costs.

China has won friends in Africa by building infrastructure across the continent, but critics grumble that it often relies on Chinese labor and is more keen on sucking in African raw materials than passing on skills.

China's premier told the news conference on Sunday that the rail construction company would ensure African workers were trained and laws adhered to.

Meanwhile Kenya signed two financing deals on Saturday with China's Eximbank, although no value was given.

Officials previously said China was offering a $1.6 billion commercial loan and a $1.63 billion concessional facility for the Mombasa to Nairobi section - covering 85 percent of that section's estimated 327 billion shilling ($3.8 billion) cost.

(Writing by Edmund Blair; Editing by Greg Mahlich)

(This story has been refiled to correct punctuation, remove repetition of Kenyatta's title and extraneous word "of" in the sixth paragraph)

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Comments (5)
Asaki wrote:
I dream that one day,Africa is going to wake up without borders as it shown here in this article.When we African begin to understand talking of borders is not the answer for our development,then things become better for the Millions of people.Actually,unless our governments do trade with each other to reduce poverty among the youths there is going to be massive unrest.Others have to follow the patterns of Eat Africa to ease the huge burdens that has been there for a very long time.We have a lot of resources,but the lack of technological know how is our main problem.If the Chinese are there for extracting our raw materials for their own benefits seems to me that Africans are stupid and they cannot realize how to tackle such issues in a good way.

May 11, 2014 7:58am EDT  --  Report as abuse
Asaki wrote:
I dream that one day,Africa is going to wake up without borders as it shown here in this article.When we African begin to understand talking of borders is not the answer for our development,then things become better for the Millions of people.Actually,unless our governments do trade with each other to reduce poverty among the youths there is going to be massive unrest.Others have to follow the patterns of Eat Africa to ease the huge burdens that has been there for a very long time.We have a lot of resources,but the lack of technological know how is our main problem.If the Chinese are there for extracting our raw materials for their own benefits seems to me that Africans are stupid and they cannot realize how to tackle such issues in a good way.

May 11, 2014 7:58am EDT  --  Report as abuse
Asaki wrote:
I dream that one day,Africa is going to wake up without borders as it shown here in this article.When we African begin to understand talking of borders is not the answer for our development,then things become better for the Millions of people.Actually,unless our governments do trade with each other to reduce poverty among the youths there is going to be massive unrest.Others have to follow the patterns of Eat Africa to ease the huge burdens that has been there for a very long time.We have a lot of resources,but the lack of technological know how is our main problem.If the Chinese are there for extracting our raw materials for their own benefits seems to me that Africans are stupid and they cannot realize how to tackle such issues in a good way.

May 11, 2014 7:58am EDT  --  Report as abuse
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