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HSBC expresses interest in the DART project

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by Wanzagi, Apr 5, 2011.

  1. W

    Wanzagi Member

    Apr 5, 2011
    Joined: Nov 2, 2007
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    The HSBC Bank International based in London has expressed intention to work together with the Dar Rapid Transit Agency (DART) project in the procurement of buses and all the machinery required in fare collection.
    One of the HSBC’s motives to justify its involvement in the DART project is its long time experience in offering expertise in Bus Rapid Transit (BRT) projects and accessing financing through involving Export Credit Agency (ECA) at affordable cost.

    In order for the financial institution to create awareness about its financial services to the government of Tanzania and other private stakeholders in transport sector, HSBC Bank International on March 31, 2011 conducted a half-day workshop at Kilimanjaro Hotel Kempinski in Dar es Salaam specifically highlighting on expertise in ECA and BRT financing.

    Elaborating on the role of ECA, HSBC Director in Export Finance, Mr. Graham Smith, said: “ ECAs are government departments of exporting countries, mainly in Europe, the Americas and the Far East which are tasked with promoting exports of equipment or services from their countries”.

    Mr. Smith said that normally ECAs strive to simplify transactions for foreign buyers when trying to access credit required to pay for imports of equipment from the ECA’s country.

    The Director said, “ECAs normally work with investment banks, such as HSBC in encouraging them to lend by providing them with guarantees covering the borrower’s repayment obligations”.

    He gave examples of BRT projects that have gone through ECAs in accessing finances for imports of buses including Rea Vaya (U$43m), Transantago (U$508m in Sweden and Brazil) and Panama City (U$ 197m).

    The Director vouched for ECA’s efficiency in BRT project financing by saying that: “ECAs are more familiar with the risks involved in BRT projects than commercial banks and can offer extended tenors, let say, of up to 10 years”.

    One of the benefits that ECAs provide to BRT projects is the aspect of offering guarantees which enable banks to provide financing in much larger amounts and for longer periods and at much lower interest rates.

    Briefing on the DART progress, the DART Agency Chief Executive Mr. Cosmas Takule pointed out that all the preparatory works for the implementation of DART system had been completed.

    Mr. Takule said: “The next step is to hold a Road Show whereby investors will be invited to participate in the project without segregation provided that they adhered to procurement principles.”

    The DART works were in August 2010 launched by the President of the United Republic of Tanzania, His Excellency Jakaya Mrisho Kikwete. The works are expected to be completed within 24 months after the launch.

    The workshop attracted participants from Ministries, Municipal Councils, World Bank and DART Agency.