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China Signs East Africa Rail Agreement

May 12, 2014 (EIRNS)—On the last stage of an Africa tour by Chinese Premier Li Keqiang, East African leaders and China formally signed agreements on May 11 for the construction of a new multibillion-dollar standard gauge railway. The high-speed road will link the Kenyan port of Mombasa to Nairobi and then run around Lake Victoria through the states of Uganda and Rwanda, then north into South Sudan, pointing toward distant Cairo.

Li had already declared during this trip that China wishes to link every African capital by high-speed rail. This is one aspect of China’s plan to issue credit internationally for, and build, 80,000 km of land-bridge rail.

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 yesterday. The new standard gauge line will supplement a slower, narrow-gauge network, a 19th century British colonial relic, that now only runs to Uganda. Kenyatta has previously said the new railway will cut freight costs to 8 U.S. cents/metric ton/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. 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’s premier told the May 11 news conference that the rail construction company would ensure African workers were trained and laws adhered to.

Meanwhile Kenya signed two financing deals May 10 with China’s Eximbank, although no value was given.

(See May 16, 2014 EIR for full Story)