(DTIS) Update, Volume 1 – Main report - Enhanced Integrated ...

carried out carefully so that the country gets the full benefits of this privatization. The choice of the rightpartners will be paramount and should be done with great care.6.5 Cost ComparisonBased on the above, Burundi has two main alternative routes to access seaports in Kenya orTanzania, namely the Northern Corridor to Mombasa and the Central Corridor to Dar es Salaam(Table 5.7). The Northern Corridor is an all road route for Burundi, while the latter has two main routeoptions, either transporting goods by road all the way, or using a rail and lake transport combination. Therail and lake option has the lowest price primarily because it uses modes with comparative advantagegiven the distances involved. Even though distance is greatest, the fastest alternative is by road on theNorthern Corridor. This is due to a combination of factors, including faster clearance of goods at the Portof Mombasa and at the border posts between Kenya and Uganda, Uganda and Rwanda, and Rwanda andBurundi.Table 5.7: Cost and time performance of Burundi’s major international trade routesContainer Bulk Liquid bulkMode DistanceCorridorcombination (km) Cost Time Cost Time Cost TimeUSD (hrs) USD (hrs) USD (hrs)Northern Road 1903 4,950 411 8,511 364 8,316 328Central Road 1567 4,369 440 6,704 545 6,704 449Central Rail/Lake 1446 2,403 524 2,146 533 2,146 533Source: Based on Marine Logistics Ltd (2009)Road and a rail/ lake multimodal combination are the feasible options for Burundi to access theDar es Salaam port in Tanzania. Of these two options, the rail/ lake option has the least cost though itis slower than using all road transport (Table 5.8). Traditionally, this has been the preferred option forBurundi trade traffic and in fact remains the one the private sector is most interested in reviving. A studyby Nathan Associates (2011) estimated that the cost of the multimodal option (including facilitation andextra inventory) is 38 percent less than the road, even though handling costs at modal interfaces arehigher. Cargo goes through three port nodes, Dar es Salaam, port of Kigoma and the port at Bujumbura.When the intermodal option is operational, it has been found to take 21 percent more time than road,mainly due to poor port infrastructure and inefficiencies of the rail and the lake ports, which delayintermodal transfers.Table 5.8: Typical costs per ton for different modecombinations for Burundi trade on the central corridorMode combinationCost per ton(USD)Road 242 0.150Rail/Lake 96 0.068Cost per ton perkm (USD)Rail/Road 142 0.087Source: Author’s estimates based on Marine Logistics Ltd (2009)Nathan Associates (2011) carried out a detailed analysis of the two main trade routes options for Burundiand found that a large proportion of the costs of road transport are due to vehicle running costs, while inthe multimodal option rail transport costs are the most relevant part with a 62 percent share of the total(Figure 5.14). For both options, time in the port is the most important, accounting for 67 percent and 74percent respectively, though for the latter the number includes also time taken to transfer cargo at the104 / 153