The governments of Kenya and Uganda are to put up an ultra-modern standard gauge railway system that will connect the East African region.

Kenya's Prime Minister Raila Odinga told private sector players at a round table meeting that the new railway line will address slow railway transport and ease congestion at the sea ports.

Odinga told the meeting a joint commission consisting of representatives of both countries has already been established to look into the construction of the railway line. The joint commission is headed by Prime Minister of Uganda Prof. Apollo Nsibambi and Odinga himself.

The announcement comes at a time when serious doubt has been cast over the capacity of the Rift Valley Railways (RVR) concession to live up to its expectations of turning around the Kenya-Uganda railway.

Already, the concession is running behind schedule as a result of cash constraints that have seen the two governments of Uganda and Kenya engage RVR in deadlines and ultimatums most of which have hit a snag.

"There is every need to address cargo transport in the region to foster trade. And I envision a new railway line coming on board especially when the Kenyan government is planning to construct a second port in the coastal town of Lamu to complement the overwhelmed one in Mombasa.

The port of Mombasa has been facing serious cargo clearance challenges since the presidential directive in August that transformed it into a 24-hour business facility.

Matters have not been helped by the fact that port clearing and forwarding agents are at loggerheads with the Kenya Revenue Authority (KRA).

KRA wants the agents to operate from premises outside the port and accuses them of aiding runaway corruption at the port.

Private stakeholders at the meeting pointed out that various departments within the government had shown that critical reforms were within reach in efforts to up economic development in Kenya.

Representatives from the sector had earlier in August met the Prime Minister with a draft of reforms that the government needs to put in place to ensure a smoother business environment.

And this round table meet held recently, was a follow-up to see if the government had adopted their suggestions.

Prime Minister Raila Odinga said the government was committed to listening to the requirements of the private sector as their role in economic growth could not be underscored. Ms Betty Maina, the CEO of Kenya Association of Manufacturers said much as the government had moved to reduce the barriers to trade in the country, there was still a lot required in regard to tax reduction, infrastructure development and public service delivery.

The ministry of transport and that of finance were particularly lauded for drastically reducing cargo pile-up at the port of Mombasa through the introduction of a 24 hour port operation system by the government last August.

Private sector players called on the Kenya Revenue Authority (KRA) to live up to the presidential directive of paying the VAT refunds within 60 days. President Mwai Kibaki last month directed KRA to ensure that the directive is adhered to but not much has happened since then.

The Premier submitted that the government had reacted on the long hours spent on roads by ensuring that customs sealed containers are immediately checked and weighed only once at the port.

The government is also in the process of constructing the eastern and northern by-passes to reduce traffic. To reduce corruption at weighbridges, the prime minister said the government was privatizing the Mariakani and Athi River weighbridges.