Cost comparison SGR Kenya vs SGR Tanzania

Geza Ulole

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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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Geza Ulole

Geza Ulole

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Geza Ulole

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Hiii reli hujengwa vilocal sana,
Ata highways kama southern bypass ATLEAST.
Inakaa single lane road under construction,
Very Poor
Yet a locomotive will move at 160km/h
Hiii reli hujengwa vilocal sana,
Ata highways kama southern bypass ATLEAST.
Inakaa single lane road under construction,
Very Poor
Yet the trains will move at 160km/h while ur first class at 80km/h!
 
Geza Ulole

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Geza Ulole

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Aaa wap!

Rwanda, Tanzania agree on electric SGR, opt for open tender

Sunday March 18 2018



President John Magufuli inspects construction works of the SGR project in Dar es Salaam. PHOTO | NMG

In Summary
  • By going electric, the two countries will give the Central Corridor a competitive edge over the Northern Corridor that runs through Kenya.
  • The design change is meant to reduce the travel time for passengers and cargo between Dar es Salaam Port and Kigali.
  • Rwanda and Tanzania are targeting passenger trains travelling at up to 160kph and cargo trains at up to 120kph. That compares with 120kph and 100kph for the Ethiopian electric rail, and 110kph and 80kph for the Kenya diesel line, respectively.

By ALLAN OLINGO
More by this Author
Rwanda and Tanzania are reviewing the designs for the Isaka-Kigali standard gauge railway (SGR) line to accommodate electricity-driven locomotives — the fastest in East Africa.

“We want to have reduced travel time for both cargo and passengers on this line between Dar es Salaam and Kigali. In order to accommodate the efficiency for the railway, we have asked for a review of the feasibility studies to accommodate the electric element,” said Rwanda’s Minister of State in charge of transport Jean de Dieu Uwihanganye.

Mr Uwihanganye spoke in Kigali last week where he met his Tanzanian counterpart of Works, Transport and Communications, Makame Mbarawa.

The Isaka-Kigali line was launched in January. By going electric, the two countries will give the Central Corridor a competitive edge over the Northern Corridor that runs through Kenya. Kenya’s SGR trains — launched in May last year and currently operate between Nairobi and Mombasa — run on diesel.

Rwanda and Tanzania are targeting passenger trains travelling at up to 160kph and cargo trains at up to 120kph. That compares with 120kph and 100kph for the Ethiopian electric rail, and 110kph and 80kph for the Kenya diesel line, respectively.

With the diesel option, the trains between Isaka and Kigali would have run at maximum speeds of 120kph for passengers and 80kph for cargo.

Related Content
Kigali and Dar es Salaam intend to use open tenders for the design review in the hope of accommodating the most suitable financing option. This would break ranks with the government-to-government sourcing that Kenya and Uganda did with China for their section of the SGR. Kenya is now extending the line from Nairobi to Naivasha, a distance of about 120 kilometres.

It is expected that the winning bidder for the Isaka-Kigali line will do works, equipment and logistics mobilisation from August with an expected groundbreaking two months thereafter.

“We shall strive to follow existing laws and regulations governing public tenders, and according to the regulations, this will take us at least three months,” said Mr Mbarawa.



Financing

However, the financing model could prove tricky given preferences by the two countries in the recent past.

In February last year, Tanzania opted for its own domestic sources to fund the $1.2 billion contract it awarded Turkish firm Yapi Merkezi and Portuguese firm Mota-Engil to build the 205km line that will run from Dar es Salaam to Morogoro.

This line is expected to be completed by October next year. And on Wednesday, President John Magufuli laid a foundation stone for the second phase of the 426km Morogoro-Dodoma railway line to be constructed by Yapi Merkezi. Tanzania said it has already released $486 million as an advance payment to the contractor.

“We have different financing models to choose from and I believe we will consider one that’s better for our people. At the moment, we can’t give a clear indication on what model we prefer as we haven’t gotten to that stage yet,” said Mr Mbarawe.

Dar port

Meanwhile, the Tanzania Ports Authority (TPA) has opened a liaison office in Kigali as Dar es Salaam plans to make Rwanda its biggest transit market.

Mr Uwihanganye said that 80 per cent of Rwanda’s external trade has utilised the Central Corridor over the past two years, anchored by the port of Dar es Salaam, which registers an eight-day dwell time. The opening of the new TPA office will cut this to four days, which will reduce the overall time and cost of cargo.

“We now don’t expect importers to travel to the Dar es Salaam port to clear their goods, but instead use the Kigali office,” he said.

At last week’s meeting between the Rwandan and Tanzania transport ministers and the implementing agencies, the feasibility study should be reviewed and a project implementation unit established by July. Bids for contractors will then be floated with a ground-breaking target of October.

From the previous design, the 1,320km SGR project is expected to cost the two countries $2.5 billion. Tanzania was expected to pay $1.3 billion while Rwanda was to raise $1.2 billion. However, the electric element incorporation is expected to increase these costs slightly.

The two countries are also pushing for a lower time frame in movement of goods to a maximum of 13 hours between Dar-es-Salaam and Kigali, and 10 hours for the passenger line.

In comparison, the Chinese-built 756 km $4 billion electrified rail line between Addis Ababa and Djibouti does a maximum of 13 hours for its cargo line.

The Kenyan passenger train takes five hours while the cargo one takes eight hours.

Kenya-Uganda SGR

In January, Tanzania in a tender notice indicated that it had set aside funds for the purchase of the electric engines and carriages to operate along the Central Corridor, making the country the second in the region after Ethiopia to use high-speed electric cargo and passenger trains.

The latest project between Dar es Salaam and Kigali enhances competition to the port of Mombasa, as Kenya and Uganda still grapple with their joint SGR project to Kampala.

Uganda is banking on Kenya to complete its last phase of the project between the lakeside city of Kisumu and the border town of Malaba in order to start the Malaba – Kampala stretch.

In January, Kampala said that it was considering revamping its metre gauge railway in the medium term as it turned out that Kenya’s failure to get finances for the Kisumu-Malaba leg could delay that of Uganda for at least three years.

“We still have issues to sort out in 2018. I cannot answer when we will get financial closure for Malaba-Kampala. We need to first agree with Kenya on how quickly they can get financial closure for Kisumu-Malaba,” said Secretary to the Treasury and Permanent Secretary in the Ministry of Finance Keith Muhakanizi.

It is understood that a meeting scheduled over the final funding proposal between the ministers of finance and transport from Uganda and Kenya with China Exim Bank officials, which was to be held in Beijing last October, failed to materialise.

Instead the executives from China Exim Bank flew in to Kampala and Nairobi in November to carry out due diligence on the Uganda project proposal and contract application. Kampala was challenged to meet some financial conditions which they said they would by end of March this year.

Rwanda, TZ agree on electric SGR, opt for open tender
 
komora096

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Ndo manake mkaamua kujengaa vyoo kw ajili bullet trains...akili zako unazijua mwnywe...
Leta picha za gari moshi!

Passengers spend 95% of the time on trains traveling and not sleeping in train stations!
 
Teargass

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Passenger train 120km/h
Aaa wap!

Rwanda, Tanzania agree on electric SGR, opt for open tender

Sunday March 18 2018



President John Magufuli inspects construction works of the SGR project in Dar es Salaam. PHOTO | NMG

In Summary
  • By going electric, the two countries will give the Central Corridor a competitive edge over the Northern Corridor that runs through Kenya.
  • The design change is meant to reduce the travel time for passengers and cargo between Dar es Salaam Port and Kigali.
  • Rwanda and Tanzania are targeting passenger trains travelling at up to 160kph and cargo trains at up to 120kph. That compares with 120kph and 100kph for the Ethiopian electric rail, and 110kph and 80kph for the Kenya diesel line, respectively.

By ALLAN OLINGO
More by this Author
Rwanda and Tanzania are reviewing the designs for the Isaka-Kigali standard gauge railway (SGR) line to accommodate electricity-driven locomotives — the fastest in East Africa.

“We want to have reduced travel time for both cargo and passengers on this line between Dar es Salaam and Kigali. In order to accommodate the efficiency for the railway, we have asked for a review of the feasibility studies to accommodate the electric element,” said Rwanda’s Minister of State in charge of transport Jean de Dieu Uwihanganye.

Mr Uwihanganye spoke in Kigali last week where he met his Tanzanian counterpart of Works, Transport and Communications, Makame Mbarawa.

The Isaka-Kigali line was launched in January. By going electric, the two countries will give the Central Corridor a competitive edge over the Northern Corridor that runs through Kenya. Kenya’s SGR trains — launched in May last year and currently operate between Nairobi and Mombasa — run on diesel.

Rwanda and Tanzania are targeting passenger trains travelling at up to 160kph and cargo trains at up to 120kph. That compares with 120kph and 100kph for the Ethiopian electric rail, and 110kph and 80kph for the Kenya diesel line, respectively.

With the diesel option, the trains between Isaka and Kigali would have run at maximum speeds of 120kph for passengers and 80kph for cargo.

Related Content
Kigali and Dar es Salaam intend to use open tenders for the design review in the hope of accommodating the most suitable financing option. This would break ranks with the government-to-government sourcing that Kenya and Uganda did with China for their section of the SGR. Kenya is now extending the line from Nairobi to Naivasha, a distance of about 120 kilometres.

It is expected that the winning bidder for the Isaka-Kigali line will do works, equipment and logistics mobilisation from August with an expected groundbreaking two months thereafter.

“We shall strive to follow existing laws and regulations governing public tenders, and according to the regulations, this will take us at least three months,” said Mr Mbarawa.



Financing

However, the financing model could prove tricky given preferences by the two countries in the recent past.

In February last year, Tanzania opted for its own domestic sources to fund the $1.2 billion contract it awarded Turkish firm Yapi Merkezi and Portuguese firm Mota-Engil to build the 205km line that will run from Dar es Salaam to Morogoro.

This line is expected to be completed by October next year. And on Wednesday, President John Magufuli laid a foundation stone for the second phase of the 426km Morogoro-Dodoma railway line to be constructed by Yapi Merkezi. Tanzania said it has already released $486 million as an advance payment to the contractor.

“We have different financing models to choose from and I believe we will consider one that’s better for our people. At the moment, we can’t give a clear indication on what model we prefer as we haven’t gotten to that stage yet,” said Mr Mbarawe.

Dar port

Meanwhile, the Tanzania Ports Authority (TPA) has opened a liaison office in Kigali as Dar es Salaam plans to make Rwanda its biggest transit market.

Mr Uwihanganye said that 80 per cent of Rwanda’s external trade has utilised the Central Corridor over the past two years, anchored by the port of Dar es Salaam, which registers an eight-day dwell time. The opening of the new TPA office will cut this to four days, which will reduce the overall time and cost of cargo.

“We now don’t expect importers to travel to the Dar es Salaam port to clear their goods, but instead use the Kigali office,” he said.

At last week’s meeting between the Rwandan and Tanzania transport ministers and the implementing agencies, the feasibility study should be reviewed and a project implementation unit established by July. Bids for contractors will then be floated with a ground-breaking target of October.

From the previous design, the 1,320km SGR project is expected to cost the two countries $2.5 billion. Tanzania was expected to pay $1.3 billion while Rwanda was to raise $1.2 billion. However, the electric element incorporation is expected to increase these costs slightly.

The two countries are also pushing for a lower time frame in movement of goods to a maximum of 13 hours between Dar-es-Salaam and Kigali, and 10 hours for the passenger line.

In comparison, the Chinese-built 756 km $4 billion electrified rail line between Addis Ababa and Djibouti does a maximum of 13 hours for its cargo line.

The Kenyan passenger train takes five hours while the cargo one takes eight hours.

Kenya-Uganda SGR

In January, Tanzania in a tender notice indicated that it had set aside funds for the purchase of the electric engines and carriages to operate along the Central Corridor, making the country the second in the region after Ethiopia to use high-speed electric cargo and passenger trains.

The latest project between Dar es Salaam and Kigali enhances competition to the port of Mombasa, as Kenya and Uganda still grapple with their joint SGR project to Kampala.

Uganda is banking on Kenya to complete its last phase of the project between the lakeside city of Kisumu and the border town of Malaba in order to start the Malaba – Kampala stretch.

In January, Kampala said that it was considering revamping its metre gauge railway in the medium term as it turned out that Kenya’s failure to get finances for the Kisumu-Malaba leg could delay that of Uganda for at least three years.

“We still have issues to sort out in 2018. I cannot answer when we will get financial closure for Malaba-Kampala. We need to first agree with Kenya on how quickly they can get financial closure for Kisumu-Malaba,” said Secretary to the Treasury and Permanent Secretary in the Ministry of Finance Keith Muhakanizi.

It is understood that a meeting scheduled over the final funding proposal between the ministers of finance and transport from Uganda and Kenya with China Exim Bank officials, which was to be held in Beijing last October, failed to materialise.

Instead the executives from China Exim Bank flew in to Kampala and Nairobi in November to carry out due diligence on the Uganda project proposal and contract application. Kampala was challenged to meet some financial conditions which they said they would by end of March this year.

Rwanda, TZ agree on electric SGR, opt for open tender
 
BlietzKrieg

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Umetumia vigezo gani kuja na hitimisho hilo?
Wewe huoni,inaundwa kama lami za kawaida?
Nikiangalia ya Kenya na Ethiopia naidharau hii yenu by far.
Nothing superior about it
 
Kafrican

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Kafrican

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Njuru za first class sasa zimeisha?

Sometimes you should use your brain alittle instead of just consuming information..

Let me translate it for you
road-rail-transpo-jpg.1180464




Hio picha hapo juu kabisa inaonyesha avg cost ya ku transport mzigo na lorry kutoka Msa-Nrb Ambayo ni $650

Lakini ukiangalia hesabu za kusafirisha mzigo na reli, it includes non standard costs ambazo kwa table ya kusafirisha na barabara hazijaonyeshwa.


Hata wanaotumia malori pia hua wanalipia Demurrage costs, Shipping line margins, bado hua wanalipia KPA storage fee hapo bandarini Mombasa na kama hawataki kulipa storage fee ya KPA hua wanaagiza private container depot ziwaekee mizigo yao hadi pale watapokua tayari kuilipia .....
Wanaotumia malori pia hua wanalipia kuregesha empty container kwa bandari.... Hizo garama zote (hidden charges) hazijaonnyeshwa huko kwa kusafirisha mizigo kutoka Msa hadi Nairobi kupitia barabara... wameonyesha tu gharama ya kuleta mzigo na gari kutoka msa hadi Nairobi.... Kabla huo mzigo utoke hapo bandarini mombasa utakuta umekaaa wiki moja na mwenye mzigo lazima atakua ameshalipia hio storage fee kabla akodishe lory la kumletea mzigo wake Nairobi... Hizo gharama hazijaonyeshwa hapo kwa road transport. Tofauti na SGR ambapo mzigo ukishashukishwa kwa bandari Mombasa unaletwa moja kwa moja hadi Nairobi ICD ambapo ndo unalipishwa storage fee ukiendelea kukaa hapo ICD.


Hio road Transport rate ya $650 ni sawa na kama wangeonyesha hio rail freight transport rate ya $500 na wasionyeshe hizo gharama nyengine..... 650/500*100 = 130% i.e the standard rate of just transporting a container through the SGR is 30% cheaper (In the feasibility report they said it would be 40% cheaper) compared to road charges - If you exclude all the non standard extra charges.


Last time niliona import invoice ya kuleta mzigo na gari hadi Nairobi ilikua ni bill $1,200 (inclusive of all charges) na wala si hio $650 inayoonyeshwa hapo..



Advantage kubwa ya kutumia gari ku import kontena ya mizigo ni kwamba unaletewa hadi nyumbani kwako au kwa mlango wa kampuni, hapa ndo SGR inakosa competitive edge, manake mizigo ya SGR inafika Nairobi ICD, kuitoa hapo hadi kwako inabidi utumie gharama nyengine kuisafirisha la lori.... unaona hapo hio transporters last mile cost ndo the biggest non standard cost at $250.
Hio last mile charges ni changamoto ambayo hata nyinyi huko TZ mtakua nayo, SGR itafika kwa stesheni haitapeleka mizigo hadi kwa milango ya watu, itabidi malori ya kibinafsi ndo yatoe mizigo kwa stesheni hadi kwa milango ya watu.... So don't start counting your chicks before they hatch! Hadi ule wakati utakua na uwezo wa kunionyesha table kama hio ya SGR tz cost VS road transport cost, don't pretend your SGR won't face same initial challenges we are facing!
 
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kirk git

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Hayo mandhari hayapendezi. Angalia ya Kenya. It's scenic
It's best to leave the environment as natural as before.

The Chinese cause a lot of damage building unnecessary concrete floors and walls all over! I think it's meant to inflate the project!
 
Teargass

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Teargass

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Your railway line doesn't impress at all.
It's best to leave the environment as natural as before.

The Chinese cause a lot of damage building unnecessary concrete floors and walls all over! I think it's meant to inflate the project!
 
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Janerose mzalendo

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It's best to leave the environment as natural as before.
The Chinese cause a lot of damage building unnecessary concrete floors and walls all over! I think it's meant to inflate the project!
I don't mean buildings. I am referring to nature... the beauty of nature
 

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