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Work has begun on building the first stage of the new Tanzania-Rwanda railway, making it likely that the project as a whole will be developed.

While many new African rail lines have been proposed over the past 20 years, there is a growing trend of them actually being built. To take one example, the first phase of the new standard gauge line in Kenya, from Mombasa to Nairobi, is approaching completion.

Indeed, it is this project that may have given added emphasis to the development of the Tanzanian line. Both new lines, as with the ageing colonial-era lines in the region, connect landlocked Eastern Africa to the rival ports of Mombasa and Dar es Salaam, Kenya and Tanzania’s competing windows on the world. Mombasa is already the larger of the two and its possession of a far superior rail connection could have proved deciding in attracting business.

The new contract relates to the 300km section of line between Dar and Morogoro. A joint venture of Turkey’s Yapi Merkezi and Mota-Engil of Portugal were awarded the contract in December following a competitive tender managed by Tanzania Railways Corporation. Both companies have made Africa a marketing priority. Yapi Merkezi had requested financial guarantees on the project from the Turkish government. Ankara is keen to encourage much greater involvement in Africa by Turkish companies.

However, the government and the state owned rail utility may have to review the tender process for future contracts. Although a massive 40 companies asked for the tender application documents, only one bid was received. It is possible that the successful contractors were prepared to make an attractive financial offer in order to aid their application for the remaining contracts on the project. Yapi vice chairman Erdem Arioglu said that his company was “very interested” in bidding to develop the rest of the scheme.

Four phases

Construction is expected to take 30 months on the US$1.1bn project. This seems expensive for the length of line involved but includes the port and Dar es Salaam city infrastructure, so the remaining three sections as far as Kigali are expected to be completed at a lower cost per kilometre. The three tenders are expected to close by mid-2019, so construction work is expected to place simultaneously on all four stretches, creating a great deal of employment in the process. The second contract will relate to the 336km section from Morogoro to the ostensible Tanzanian capital Dodoma.

It will be interesting to see what proportion of the skilled workforce comprises local people. As with the Kenyan project, the new line will be standard gauge, rather than the narrower gauges currently in use in Tanzania. This will allow the transport of heavier loads and could encourage the exploitation of the various mining commodities that the government hopes to see developed.

Traders in areas with direct rail links to Dar or Mombasa are likely to favour those ports but the key battleground will be over adjacent areas of Uganda, Burundi and Eastern Democratic Republic of Congo. Road connections between these landlocked areas and the two railways are scheduled to be upgraded. At present, many roads in the region are still unsurfaced and so unusable for freight transport following heavy rain.

The Tanzania-Rwanda railway will have one advantage over the new Kenyan line: with a top speed of 160km an hour it will be faster. This is also much faster than the existing Tanzanian rail network. Accurate figures are difficult to obtain but existing rail services for both cargo and passenger traffic are slower than road transport in most areas.

Discussing the project, Tanzanian President John Magufuli commented: “Our main focus is to improve the infrastructure sector, something which will in turn improve other sectors.” He is particularly keen to promote intra-African trade, which currently accounts for just 15% of the continent’s international trade, although this is up from 11% a decade ago. Connecting the Kenyan and Tanzanian lines, probably in either Rwanda or Uganda would help this process but the two governments may not be prepared to cooperate.

Neil Ford

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from African Business Magazine http://ift.tt/2pYYpPC