The government and the European Union (EU) yesterday signed a contract worth Rwf 27 billion for the rehabilitation of the Kigali-Gatuna highway expected to start in May next year.

The Minister of Finance and Economic Planning, John Rwangombwa, signed on behalf of the government while the Head of the EU delegation in the country, Ambassador Michel Arrion, represented the EU, in the presence of the contractors, Strabag International Gmbh.

The amount which is equivalent to €32.9m will oversee the upgrading of the 78km stretch from the main roundabout in Kigali city centre to Gatuna.

Strabag will also be required to upgrade the parking yard at the Gatuna Border Post as part of the wider initiative to create a single border post.

Rwangombwa commended the EU for the continued support in several infrastructural projects and playing a key role in financing international links that connect the country to its international gateway.

The minister underscored that the EU has funded the construction of the Kigali-Kayonza road, Kagali-Nyamata road and Musanze-Rubavu road under its 10th European Development Fund.

"EU has really been a key supporter to our infrastructure development, especially the road network. Now they are going even beyond supporting national roads but also supporting the district roads connecting farmers to the main roads,” he noted.

Ambassador Arrion said that apart from the Kigali-Gatuna road, the EU is also funding the section ---Katuna-Mbarara road on the Ugandan side, observing that the two roads will mark the completion of the Northern Corridor stretching from Mombasa to Goma.

"With those two roads, we are integrating four countries, Rwanda, Uganda, Kenya and DRC. In the EU we believe in economic and regional integration, so we are most happy to contribute to the integration of EAC,” he said.

"The main objective of rehabilitating big infrastructure in the field of road transport is to facilitate the movement of goods and people, as well as decreasing the cost of movement of goods for landlocked countries like Rwanda,” Arrion said.

He added that the EU has another € 40 million in the pipeline to develop the road network, pointing out that the agreement will be signed next year. He said once signed, 90 percent of the fund, will go to feeder roads to link remote areas to main roads and markets.

Part of the funds will go to skills and capacity development in road maintenance to be channelled to the Rwanda Transport Development Agency (RTDA) as part of budgetary support, an EU Policy.

The Kigali-Gatuna road project is part of the 600km road network supposed to be constructed over a period of seven years.

Meanwhile, Amb. Arrion has assured that the current crisis in the Eurozone, as well as the problems faced by the Euro, will not affect EU programmes in the country, but instead plans to increase funding to the country.

He, however, said that it was true that the EU and its member states have been affected in their plans to reach the target of 0.7 percent of their GDP as overall budget aid by 2015, observing that the countries are still committed to doing so.

EU members and other European countries pledged to commit 0.7 percent of their GDP to aid in a bid to facilitate developing countries achieve Millennium Development Goals (MDGs) but the current crisis means that countries will have to cut their budgets.

Arrion said that to fulfil the pledge, countries will have to cut their national budgets and reduce funds allocated to various sectors even though it would be difficult to convince citizens that their budgets on education or health will be cut while increasing development support budgets.

"Yes, there will be arbitrage, there will be difficulties to fix the budget for the next five or six years. Europe is always reinforced by crises though I remain confident but the next two, three years will be certainly very difficult in Europe.

"We are discussing our new multi-annual framework, 2014 to 2020. So we are very much forward looking and that will be very tough to get any increase in the EU budget.

But what will be affected is the increase not the current programmes,” Arrion said.

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