Cost comparison SGR Kenya vs SGR Tanzania


Geza Ulole

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Tanzania secures $7.6 billion financing deal from Chinese lender to build new railway

President John Magufuli with China Exim Bank president Liu Liang after holding talks at Chamwino State Lodge in Dodoma this week. PHOTO | COURTESY

In Summary

  • Dar es Salaam is positioning itself as a regional hub, upgrading its port to attract more business from its neighbouring landlocked countries.
  • The EAC railways master plan incorporates the standard gauge railway’s Northern and Central Corridors, which are both commercially viable for landlocked countries in the region as they give them strategic access to the ports of Mombasa and Dar es Salaam.
  • The Northern Corridor Integration Projects championed by Rwanda, Kenya and Uganda spearheaded the establishment of a railway link from Mombasa to Kigali.
  • In June 2013, a Northern Corridor Integration Projects Heads of State Summit held in Kampala put in place mechanisms for fast-tracking the development of the SGR.

Tanzania has secured a $7.6 billion loan from China’s Export-Import Bank (Exim) for the construction of a railway line that will link it with Burundi, Rwanda and Democratic Republic of Congo.

President John Magufuli secured the concessional loan after meeting with the Exim Bank’s president Liu Liang.

President Magufuli, while announcing the funding, alluded to a preferential deal without providing details.

Oil and gas discoveries have turned Tanzania into an exploration hotspot, but the country’s transport infrastructure has suffered from decades of under investment. The country is also positioning itself as a regional hub, upgrading its port to attract more business from its regional landlocked neighbours.

According to Mr Liu, China Exim Bank will offer Tanzania technical support.

READ: China Exim sets terms for financing Uganda’s SGR

ALSO READ: Rwanda looks to Tanzania for rail transport as Uganda falters on SGR

Last year, Tanzania announced that it had awarded rail contracts to a consortium of Chinese firms led by China Railway Materials (CRM), which included the standard gauge rail project.

The Exim Bank is also financing a $1.2 billion, 532km natural gas pipeline in Tanzania.

On Wednesday last week, Finance and Planning Minister Dr Philip Mpango after a meeting with Dr Alberic Kacou, African Development Bank vice-president for human resources and corporate services, announced that Tanzania had secured a further $200 million loan from the AfDB to finance transport infrastructure projects.

“We will use some of this funds towards the construction of the SGR project to transform the country’s infrastructure,” Dr Mpango said.

In an interview with Bloomberg, Gerson Msigwa, a spokesman for Tanzania’s presidency, said the construction will start by July next year. Before then, Tanzania and Exim Bank China will be expected to have finalise technical issues on the contract and sign the financing deal for the 2,190km project.

Tanzania Transport Minister Samuel Sitta said the SGR will have a main line that will connect the port city of Dar es Salaam to Rwanda and Burundi, with additional branch lines running within the country.

“We expect to have two offshoots: One of them to Mwanza, which will open up the lakeside port city and link it with Uganda, while the second one will link to the coal, iron ore and soda ash mining areas in the south. Through this, we expect an increase in cargo on this route,” Mr Sitta said, adding that will be at an additional cost of $6.6 billion.

Already, Tanzania has signed contracts with China Railway No 2 Engineering Group to build a rail link between the southern port of Mtwara, which is rich in coal, iron ore and natural gas. The contract will see China Railway No 2 Engineering Group provide 10 per cent of the funding with the rest provided by the government.

Kenya is also constructing a $3.27 billion 609km new standard gauge railway line between Mombasa and Nairobi to boost the movement of cargo from the port.

However, queries have been raised over the economic viability of SGR, after key landlocked states indicated their intention to connect to the Indian Ocean through Tanzania.


The issue of cost is also bound to arise now that Tanzania’s SGR is four times longer than Kenya’s but only two times as expensive.

In a previous interview with The EastAfrican, Kenya Railways managing director Atanas Maina said that the cost of the Kenyan SGR was high because of the design adopted, which will see the train maintain an average speed of 80 kilometres irrespective of the terrain.

“We have built bridges, and raised the track in areas where we would have had corners to achieve the average speed we expect the wagons to travel at. This has increased the costs immensely as compared with the neighbouring Ethiopia and Tanzania SGER designs that haven’t taken this into account,” Mr Maina said.

Recently, a confidential World Bank report cast doubt on the region’s push for the SGR projects, saying they would only be viable with increases in cargo of between 20 tonnes and 55 million tonnes per year.

The report done by the Africa transport unit at the World Bank titled The Economics of Rail Gauge in the East Africa Community showed that the volumes of the forecasts undertaken for the EAC railway master plan and central line in Tanzania, are unattainable over the medium to longer term.

“Based on these assumptions, there is no economic or financial case for standard gauge in the EAC area at this time. A refurbished meter gauge network would appear to be the most appropriate option in economic and financial terms, and could easily accommodate forecast traffic up to 2030, with lower investment requirements,” the report concludes.

The World Bank team highlighted the rehabilitation of the existing railway network as the best alternative, which would allow a phased approach to the regions development, consistent with current and projected demand and the financing envelope available.

The SGR alternative, which the regional governments chose, involves the construction of a standard gauge railway on a new right of way, an option the World Bank team said required additional investment in land acquisition and structures, and new right-of-way construction.

“This alternative predicates axle loads in the order of 25 tons per axles and a maximum operating speed of up to 120 km per hour. Again, based on these assumptions, the estimated maximum carrying capacity of the current network would exceed 60 million tonnes per year. The estimated investment cost per km will be $ 3.25 million,” the report said.

From the estimates provided, the Tanzanian new railway line will cost an average of $3.4 million per kilometre.

MY TAKE

It is time now to look at the cost of the two rails as we know cost of construction is very important for prospect of any infrastructure! i welcome bright minds to contribute and not some propaganda in here!


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mwaswast

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Reli yenyewe imefika Kibaha lakini mbwembwe utafikiri ishafika Mwanza. Alafu nasikia ujenzi ulikwama desemba mwaka jana na hizo tunakaririwa hapa ni spin tu.
 
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He has said contract for emu and cargo train will be signed early next month.

Any idea who's the suppliers?
I thought the contract for supply of 14 electric trains and 2 diesel-electric trains had already been awarded last year and you were awaiting delivery.
Sasa kama wanasema contract itatiwa sign next month , I doubt kama kiwanda cha kutengeneza reli kinaweza kutengeneza treni 16 na mabehewa karibia 1,400 Chini ya miezi 7 kabla mwaka uishe... Zile za Kenya mpaka Leo bado hawajamaliza order ya mabehewa miaka mitatu baadae, vichwa vya treni ndo walileta vyote tuli order hivyo vichwa mwaka mmoja na nusu au miwili kabla tumalize ujenzi ndo vichwa vya Kwanza vikaanza kuwasili na iliwachukua kama miezi sita kabla wavilete vichwa vyote.
 
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thisdayes

thisdayes

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I thought the contract for supply of 14 electric trains and 2 diesel-electric trains had already been awarded last year and you were awaiting delivery.
Sasa kama wanasema contract itatiwa sign next month , I doubt kama kiwanda cha kutengeneza reli kinaweza kutengeneza treni 16 na mabehewa karibia 1,400 Chini ya miezi 7 kabla mwaka uishe... Zile za Kenya mpaka Leo bado hawajamaliza order ya mabehewa miaka mitatu baadae, vichwa vya treni ndo walileta vyote tuli order hivyo vichwa mwaka mmoja na nusu au miwili kabla tumalize ujenzi ndo vichwa vya Kwanza vikaanza kuwasili na iliwachukua kama miezi sita kabla wavilete vichwa vyote.
Hivi hizo train zenu mlichagua au mlichaguliwa kama ilivyokua kwa contractor..

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diamond d

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I thought the contract for supply of 14 electric trains and 2 diesel-electric trains had already been awarded last year and you were awaiting delivery.
Sasa kama wanasema contract itatiwa sign next month , I doubt kama kiwanda cha kutengeneza reli kinaweza kutengeneza treni 16 na mabehewa karibia 1,400 Chini ya miezi 7 kabla mwaka uishe... Zile za Kenya mpaka Leo bado hawajamaliza order ya mabehewa miaka mitatu baadae, vichwa vya treni ndo walileta vyote tuli order hivyo vichwa mwaka mmoja na nusu au miwili kabla tumalize ujenzi ndo vichwa vya Kwanza vikaanza kuwasili na iliwachukua kama miezi sita kabla wavilete vichwa vyote.
Sio wote watachelewesha

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Abunwasi

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Reli yenyewe imefika Kibaha lakini mbwembwe utafikiri ishafika Mwanza. Alafu nasikia ujenzi ulikwama desemba mwaka jana na hizo tunakaririwa hapa ni spin tu.
Unasikia? wengine tumekwenda kushuhudia maendeleo ya ujenzi huo na tulivyoona na kwamba unaendelea vizuri.
 
Lusematic

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I thought the contract for supply of 14 electric trains and 2 diesel-electric trains had already been awarded last year and you were awaiting delivery.
Sasa kama wanasema contract itatiwa sign next month , I doubt kama kiwanda cha kutengeneza reli kinaweza kutengeneza treni 16 na mabehewa karibia 1,400 Chini ya miezi 7 kabla mwaka uishe... Zile za Kenya mpaka Leo bado hawajamaliza order ya mabehewa miaka mitatu baadae, vichwa vya treni ndo walileta vyote tuli order hivyo vichwa mwaka mmoja na nusu au miwili kabla tumalize ujenzi ndo vichwa vya Kwanza vikaanza kuwasili na iliwachukua kama miezi sita kabla wavilete vichwa vyote.
kenya ni kenya na Tz ni Tz,,,,,


ndiyo maana hata town nyie huwa mnaita Taoo lakini sisi hatuiti taoo,usiforce tufanane



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mwaswast

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Abunuasi weka picha basi zile ulizopiga kwa simu yako smart phone la sivyo niko sahihi hamna kitu pale bongolala land. Hapa tunafanya kweli kwa ushahidi wa picha sio umbea wa ccm.
 
Kafrican

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kenya ni kenya na Tz ni Tz,,,,,


ndiyo maana hata town nyie huwa mnaita Taoo lakini sisi hatuiti taoo,usiforce tufanane



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Sijatumia huo mfano ili kufananisha, nimetumia huo mfano ili ujue timeline ya ku order vichwa vya treni itachukua between 1.5-2 years , kwahivyo kama mna order mwezi ujao basi the soonest zitawasili mbele ya June 2020.....
Kuna jamaa hapa walituletea taarifa kwamba SGR ya TZ itaanza kufanya kazi October 2019.... Ndio maana nikasema nilikua nafikiria mlisha order vichwa na mabehewa mwaka uliopita na kilichobaki ilikua mnangoja ziwasili.....
Hii inamaanisha ujenzi wa reli unaweza kukamilika lakini treni na mabehewa yakawa badoo hayajafika na reli ikakaa idle kwa kama miezi sita ikingojea mitambo ya reli iwasili.
 
Lusematic

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Lusematic

Lusematic

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Sijatumia huo mfano ili kufananisha, nimetumia huo mfano ili ujue timeline ya ku order vichwa vya treni itachukua between 1.5-2 years , kwahivyo kama mna order mwezi ujao basi the soonest zitawasili mbele ya June 2020.....
Kuna jamaa hapa walituletea taarifa kwamba SGR ya TZ itaanza kufanya kazi October 2019.... Ndio maana nikasema nilikua nafikiria mlisha order vichwa na mabehewa mwaka uliopita na kilichobaki ilikua mnangoja ziwasili.....
Hii inamaanisha ujenzi wa reli unaweza kukamilika lakini treni na mabehewa yakawa badoo hayajafika na reli ikakaa idle kwa kama miezi sita ikingojea mitambo ya reli iwasili.
nakuelewa vyema kikubwa nikungoja nakuona kitakachotokea kabla ya huu mwaka kuisha nadhani hapo itajulikana mbivu na mbichi au vipi...

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