Master Plan on Logistics in Northern Economic Corridor Draft Interim Report April 2016 JICA Study Team
Agenda 1. Objective & Structure of the Study 2. Comprehensive Development Strategy 3. Regional Plan and Industrial Development 4. Way Forward NK/EJEC/PADECO 2
Objectives 1 1 1 1 & Structure NK/EJEC/PADECO
Objective and Target Objective of the Consulting Assignment : To formulate a Master Plan on Logistics for Northern Economic Corridor, along with integrated • regional development strategy consistent with sub-regional development plans and national development plans. Target Year: The target year of the Master Plan is 2030. • Target Area: The target area of the study will cover • the following routes with its surround area. - Main route: Mombasa-Nairobi- Tororo-Kampala-Katuna- (Kigali/Rwanda) - Sub-route: Eldoret - Nadapal – (Juba/South Sudan) - Sub-route: Tororo - Gulu – Elegu – (Juba/South Sudan) - Sub-route: Kampala- Gulu – Elegu – (Juba/South Sudan) - Sub-route: Mbarara- Mpondwe– (Kisangani/D.R.C) NK/EJEC/PADECO 4
Work Schedule Major Works 2015 2016 Mar~June July~Sept Oct ~ Dec Jan~Mar Apr~June July~Sept Understanding of current situation Additional Market and issues (situational analysis) Survey Freight Transport Survey, Market Survey, and Freight Lead Time Survey Identification of Development Potentials and Bottlenecks Formulation of Development Vision Establishment of Social and Economic Framework Formulation and Comparison of Alterative Development Scenarios Formulation of Comprehensive Development Strategy Development of Draft Master Plan on Logistics with Regional Development Strategy Strategic Environmental Assessment/Stakeholder Meetings NK/EJEC/PADECO Deliverables PR 2 ICR PR 1 ITR DFR FR 5
Deliverables Report Main Contents Timeline 1. Inception • Plan and Deliverables April 2015 Report 2. Progress • Situation Analysis and Preliminary August 2015 Report No.1 Assessment of Current Bottlenecks 3. Progress • Bottleneck and Potential Assessment December 2015 Report No.2 • Development Framework for NEC • Comprehensive Development Strategy 4. Interim Report February 2016 for Northern Economic Corridor 5. Draft Final • Draft Logistics Master Plan with Regional June 2016 Report Development Strategy • Final Logistics Master Plan with Regional 6. Final Report September 2016 Development Strategy NK/EJEC/PADECO 6
Comprehensive 2 2 2 2 Development Strategy NK/EJEC/PADECO
Proposed Development Vision (Key words in Vision) 1. Leading : to be the leading, most efficient and reliable corridor in Africa and the success of NEC can be disseminated to other African regions. 2. Economic Corridor : which stimulates regional economic Development in the area surrounding the corridor through the development of transport infrastructure and logistic facilities and creating industries. 3. Integrated :integrated transport and logistics system, which offers diversified and multi-modal options (road, rail, waterway, and pipeline), facilitates regional integration in East Africa, and connects and promotes industrial areas. NK/EJEC/PADECO 8
Development Issues and Strategies Development Strategy Development Issues 1. Issues on Region 1. Regional Strategy (1) Concentration of Functions on Capitals (1) Linking with agricultural (2) Lack of linkage between production and mineral resource areas through areas and logistics hub promotion of Secondary Cities (3) Outflow of income due to excess of (2) Linking with LAPSSET, Central imports Corridor and Kampala-Juba-Addis (4) Lack of trade within the region Ababa- Djibouti Corridor 2. Industrial Strategy 2. Issues on Industry (1) Promotion of Growth Drivers (1) Lack of export oriented goods (2) Connecting industrial and trade (2) Strength of industries with strong areas to logistic hub through COD forward and backward linkage (3) Establishment of logistics hubs (3) Lack of information on potential and weak promotion of mining and energy 3. Logistics Strategy resources (1) Modal shift from truck to rail and 3. Issues on Logistics pipeline (2) Reduction of bottlenecks of cargo (1) Integration and efficiency of multi modal transportation infrastructure (3) Improvement and utilization of (2) Development of efficient road network existing transport infrastructure as basic infrastructure (inland water, airport and (3) Bottlenecks of logistics Mombasa port) (4) Transportation Safety NK/EJEC/PADECO 9
Comprehensive Development Strategies Development Strategies to attain the proposed Development Vision 1. Regional Strategy 3. Transport Strategy 2. Industrial Strategy (1) Linking with agricultural (1) Promotion of Growth (1) Modal shift from truck to rail and mineral resource areas Drivers and pipeline through promotion of (2) Connecting industrial (2) Reduction of bottlenecks of Secondary Cities and trade areas to cargo transportation (2) Linking with LAPSSET, logistic hub through (3) Improvement and utilization Central Corridor and COD of existing transport Kampala-Juba-Addis (3) Establishment of infrastructures (inland water, Ababa- Djibouti Corridor logistics hubs airport and Mombasa port) Supported by… 5. Financial Strategy 4. Organizational and Policy Strategy (1) Role of the government for logistics (1) Diversifying financial sources and multi-modal transport (2) Expanding revenue sources for (2) Regional coordination or logistics cost recovery NK/EJEC/PADECO 10
1. Regional Strategy (1/2) (1) Linking with agricultural productive areas and mineral resources through secondary cities development ⇒ Smooth transportation of products and balanced development of the region NK/EJEC/PADECO 11
1. Regional Strategy (2/2) (2) Linking with LAPSSET Corridor, Central Corridor and Kampala-Juba-Addis Ababa- Djibouti Corridor ⇒ Creating larger market and strengthening linkage of East Africa region Kampala-Juba- Addis Ababa- LAPSSET Corridor Djibouti Corridor Central Corridor NK/EJEC/PADECO 12
2. Industrial Strategy (1/3) (1) Promotion of growth drivers to increase export, replace current import, and develop local economy ⇒ improving of the export (85% of increased export) and reducing import (10% of increased import) Category Kenya Uganda Tea, Coffee, Cut Flower, Processed Coffee, Oil Seeds, Crude Oil, Fruits and Vegetable, Crude Oil, Phosphate, Other Minerals (e.g., Niobium and Rare Earth Elements, gold, iron ore, wolfram, tin, Expansion of Construction Materials (e.g., iron tantalite, copper etc), Leather, and steel, glass), Consumer Goods Construction Materials (e.g., iron Export (e.g., soaps and detergents, and steel), Consumer Goods processed foods), Textile and (e.g., soaps and detergents, Apparel, Leather processed foods) Replacement of Rice, Soda Ash Palm Oil, Rice, Petroleum Current Import Meat Production, Plastics Meat Production, Leather Value Addition to Packaging, Coal, Natural Gas, articles, Tourism, Logistic Local Economy Tourism, Logistic Service Service Total 20 Drivers 15 Drivers NK/EJEC/PADECO 13
2. Industrial Strategy (2/3) (2) Connecting industrial areas to logistic hubs through Cargo Oriented Development (COD) ⇒ Efficient Logistic Network for Industrial Promotion Mbarara, Kampala, Gulu, Tororo Kisumu, Nairobi and Mombasa NK/EJEC/PADECO 14
2. Industrial Strategy (3/3) (3) Establishment of logistic hubs with ICD and Logistic Center ⇒ ① Efficient Linkage of railway, truck and inland water transport, ② Reduction of empty container (7% of reduction of truck transport at Mombasa), ③ Promotion of Regional Logistics Service Logistics Center Logistics Center Logistics Logistics Center Center ICD(modal shift) ICD(modal shift) ICD(modal shift) ICD(modal shift) Customer Loading/ Unloading Rail Truck transport delivery Container Inventory management storage (Customs clearance) Container delivery Container Customer delivery NK/EJEC/PADECO Customer Customer 15
3. Transport Strategy (1/3) (1) Modal shift from truck to rail and pipeline 2015 2030 27 Million tons 62 Million tons at Mombasa at Mombasa � Truck: 76% of Cargo � Truck: 46% of Cargo at at Mombasa Mombasa � Railway (MGR): 4% � Railway (MGR+SGR): of Cargo at 33% of Cargo at Mombasa Mombasa � Pipeline: 20% of � Pipeline: 21% of Cargo Cargo at Mombasa at Mombasa • The transit cost of SGR should be almost 50% of truck’s transit cost • The replacement of old pipelines and establishment of new ones with expanded capacity should be done as planned. NK/EJEC/PADECO 16
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