China reasserted its plans to play a bigger role in East Africa by agreeing to undertake a new railway construction project in Nairobi. The line will run from Mombasa to Nairobi and will be late extended to from Uganda to Rwanda and South Sudan.
China will finance 90 percent of the cost of the first stage of the project and will be investing USD3.8 billion. Construction is due to start in October. The line will be a 610 km stretch linking the coast with the Kenyan capital.
Kenyan President Uhuru Kenyatta welcomed the agreement and said that the project would reduce the cost of moving people and goods. The cost of moving a tonne of goods for a kilometer is expected to decline from 20 cents to 8 cents if the railway line is constructed. Chinese Prime Minister Li Keqiang said that the project reflects co-operation and would create mutual benefit for China and East Africa.
The prime contractor of the project is China Communications Construction Co. The funding will be provided by China's Exim bank. China is a major investor in the primary sector of East African states. The country has made huge investments in coal mining, power generation and agriculture.
A major blockade for the country is the poor infrastructure in the region. China is also active in non-governmental projects and has undertaken many projects to initiate infrastructural development in the region