Masaka ICD to open in January, cutting time and cost of imports to the region

Monday November 19 2018

Rwanda is developing a cargo centre in Masaka, near Kigali CitY. NMG

Rwanda is developing a cargo centre in Masaka, near Kigali City, in an attempt to position itself as a regional cargo hub. PHOTO | CYRIL NDEGEYA | NMG 

By IVAN R. MUGISHA
More by this Author

Dubai Port World will in January 2019 start operations at the first phase of its inland container depot and logistics hub in Masaka, Rwanda.

The dry port east of Kigali is expected to help realise the country’s ambitions of becoming the region’s trade and logistics hub.

Built at a cost of $80 million, the port sits on 30 hectares of land given on a 25-year concession by the government of Rwanda to the Dubai-based investor in 2016.

It is located close to the Special Economic Zone and linked to both the Northern and Central Corridors. This will cut by half the time and costs incurred in transporting of goods.

“By January next year, traders will benefit from the first phase, which covers 13 hectares and features an inland container terminal with modern warehousing space, a container yard, administrative and service buildings and a large parking area. It is a hub that provides everything that a trader needs,” said Sumeet Bhardwaj, the chief executive of Dubai Ports World Logistics Rwanda.

Services

“The facility will provide container handling, loading and unloading from trucks, warehousing, and cold storage, which are currently a challenge for many traders in the country. Imports from overseas can also be distributed through the logistics chain to neighbouring Uganda, Tanzania, Burundi and the DR Congo.”

Mr Bhardwaj said that Customs officials at the logistics hub will use modern e-tags to allow real-time tracking of cargo coming to Kigali, increasing transparency and security.

The facility will also enable traders to outsource logistics services including international shipments, clearances and final delivery of goods.

Rwanda and Tanzania are currently working on a joint modern railway project that once completed, will feed into Rwanda's inland container depot.

Market estimates show that the cost of transporting a 20-foot container from China to Mombasa is about $500-$1,000, which increases to about $4,000 when transporting the same container from Mombasa to Kigali.

“Our target is to reduce this cost and time by half; we are already seeing through our test phase that it is possible. If bringing cargo to Rwanda becomes cheaper and the trucks are waiting for half the time they were used to, traders will be able to save on time and money,” Mr Bhardwaj added.

“The three weeks taken for shipping and clearing of goods will also be reduced drastically.”

Construction

He said that with construction nearly complete, the port is currently undergoing a testing phase to ensure that its systems are well connected to the EAC member states’ national systems.

The hub will be connected to both the ports of Mombasa and Dar es Salaam, and later will be connected directly to the standard gauge railway being built from Dar es Salaam to Kigali.

Dubai Port is currently in negotiations with the government to begin the second phase of construction, which will include modern cold storage facilities on seven hectares.

In 2016, DP World was granted a 25-year greenfield concession to develop and operate a new logistics centre in Kigali.

The DP World Kigali Logistics project’s first phase was to be built on 969,000 square feet with a 129,000 square feet container yard and a 211,000 square feet warehousing facility.

It was envisioned to have an estimated annual capacity is 50,000 teus and 640,000 tonnes of warehousing space, with the total project cost estimated at $35 million.

Foothold

DP World has a strong foothold in port operations in the region but has in recent months faced challenges in its Djibouti operations, its biggest port concession in the region so far.

In September, the government of Djibouti ordered the nationalisation of the Dolareh Container Terminal, a vital port facility, after a long spat with DP World.

The terminal is an essential facility for supplies to neighbouring landlocked Ethiopia and the Djibouti government had a two-thirds stake in the venture but claimed that the terminal had come under the de facto control of DP World.

“The Republic of Djibouti following a presidential decree dated September 9, has decided to nationalise with immediate effect the shares," the Djibouti authorities said in a statement.

The terminal was run by DP World since 2006. But in late February, Djibouti cancelled the contract, saying its national sovereignty was being compromised.

The Dubai-based state-controlled company is also said to be eyeing Eritrea as an alternative to its lost business in Djibouti, and has already established itself at the port of Berbera in Somaliland.

“Eritrea is going to have a major role. We believe that the way we should look at the Horn of Africa is not at Eritrea alone, but add to the equation South Sudan, other parts of Sudan, and Eritrea’s needs, and then the Ethiopian population,” said the firm’s chief executive, Sultan Ahmed bin Sulayem, in an interview with Bloomberg last month.