The Comparative Transport Cost Analytical Study along the Northern Corridor Region

System inefficiencies and soaring transport costs along the Northern Corridor have been identified as major contributing factors to the high cost of doing business in the sub-region as well as being factors that have negative impacts on the international trade competitiveness of the sub-region.

Addressing the high transportation costs is also a major objective of the Customs Union planned for implementation in the EAC and COMESA regions.

In this regard, the NCTTCA has invited firms to express interest in undertaking a comparative transport cost study with a view to identifying the causes for the high costs of transportation in the region.

It is estimated that the land-locked developing countries suffer, on average, 50% higher international transportation costs than their neighboring coastal countries. There are several possible reasons for this; for example, border delays and transport coordination problems lead to uncertainty and delays which create higher insurance costs hence leading to direct charges that may be incurred by transporters and these are passed on to consumers in the transit countries.

However, despite the general knowledge that transport costs are high, policy makers and the trade and transport community do not have a comprehensive study at their disposal identifying and quantifying the factors contributing to these high costs in order to facilitate the formulation of measures to tackle these factors.

The Comparative Transport Cost Study intends to develop an analytical model comparing the long-term costs for the provision and maintenance of infrastructure relating to roads, rail, pipeline and inland waterways, with a view to guiding investment decisions in these areas.

In addition, the study will analyze freight and other related costs of clearing and forwarding cargo, including delay costs throughout the transportation chain along the Northern Corridor.

Thirteen firms have responded to the Request for Expression of Interest and the NCTTCA Secretariat is finalizing the process of short listing the firms to be invited to submit bids.

It is expected that the study will commence by February 2008.