* China offering finance for most of first part of line
* Mombasa-Nairobi railways to be finished in March 2018
* New railway to bring down freight costs, boost trade
(Adds details on start of construction, financing)
By Edmund Blair
NAIROBI, May 11 East African leaders and China
formally signed agreements on Sunday related to the construction
of a new multi-billion dollar railway to run from the Kenyan
port of Mombasa to Nairobi and on to neighbouring 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 existing narrow gauge railway in Kenya was built in the
19th century and only runs to Uganda whereas the faster new line
is designed to go on to Rwanda and South Sudan and is aimed at
cutting the hefty costs of trade between east African nations.
Kenyatta has previously said the new railway will cut
freight costs to 8 U.S. cents a tonne per km from 20 cents now.
Journey times will also be shortened.
Work on the 609-km (380-mile) Nairobi to Mombasa stage is
due to start on Oct. 1 and be completed in March 2018.
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
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
Kenyan shillings ($5.1 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 labour 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.
The Nairobi to Mombasa stage will cost $3.6 billion, with
China covering 90 percent of the financing, the Kenyan
presidency said in a statement. Kenya will fund 10 percent.
Kenya has previously said China is offering a $1.6 billion
commercial loan and a $1.63 billion concessional facility to
help finance that section of the line.
($1=87.1000 Kenyan shillings)
(Editing by Greg Mahlich)