Tanzania continues to show strong commitment to its grand $14 billion, 1,800km standard gauge railway (SGR) project. According to recent reports, the government is pushing forward with the Tabora-Gitega and Isaka-Kigali phases, connecting the infrastructure with Burundi and Rwanda, respectively. This will, hopefully, make Tanzania a transportation hub for its many landlocked neighbours.
The government’s gung-ho approach to SGR is commendable. At this stage of the project, developing cold feet would make no sense. Nonetheless, much more needs to be done to ensure the SGR’s future commercial and economic viability.
To start with, while economic and population growth, global supply chains, landlocked countries and mining investments all call for better and more reliable transport infrastructure, the SGR was not the right solution for Tanzania. Multiple reports have made this quite clear. There is no economic justification for SGR investment anywhere in East Africa at this point.
A 2013 World Bank report observed that an SGR project requires a volume of 55 million tonnes to be viable, while EAC railways are estimated to achieve only 14.4 million tonnes in total by 2030. With such requirements, given that Tanzania Railways Corporation (TRC) achieved not even a third of that, refurbishing the Central Railway at one third of the
of the SGR cost would have sufficed, but the powers that be chose the most expensive option possible!
Neighbouring Kenya is paying dearly for its headstrong decision to ignore the fundamentals of railway economics. Ian Taylor, author of Kenya’s New Lunatic Express, observes that the Madaraka Express was generating a loss of $7.35 million every month in 2018, operating at less than 15 percent of its planned capacity. This is the fate that awaits Tanzania unless the government has something quite special up its sleeve.
But the long list of failed or failing public projects – TRC, UDA, BRT, TTCL, NHC, ATCL, Tanganyika Packers, etc – suggests that that is quite unlikely. While the government may pull off a project here or there, it lacks the track record of successfully running considerable operations in the medium and long term. To give the SGR a chance, the government needs to show a very high degree of resolve to address its future challenges
The government’s gung-ho approach to SGR is commendable. At this stage of the project, developing cold feet would make no sense. Nonetheless, much more needs to be done to ensure the SGR’s future commercial and economic viability.
To start with, while economic and population growth, global supply chains, landlocked countries and mining investments all call for better and more reliable transport infrastructure, the SGR was not the right solution for Tanzania. Multiple reports have made this quite clear. There is no economic justification for SGR investment anywhere in East Africa at this point.
A 2013 World Bank report observed that an SGR project requires a volume of 55 million tonnes to be viable, while EAC railways are estimated to achieve only 14.4 million tonnes in total by 2030. With such requirements, given that Tanzania Railways Corporation (TRC) achieved not even a third of that, refurbishing the Central Railway at one third of the
of the SGR cost would have sufficed, but the powers that be chose the most expensive option possible!
Neighbouring Kenya is paying dearly for its headstrong decision to ignore the fundamentals of railway economics. Ian Taylor, author of Kenya’s New Lunatic Express, observes that the Madaraka Express was generating a loss of $7.35 million every month in 2018, operating at less than 15 percent of its planned capacity. This is the fate that awaits Tanzania unless the government has something quite special up its sleeve.
But the long list of failed or failing public projects – TRC, UDA, BRT, TTCL, NHC, ATCL, Tanganyika Packers, etc – suggests that that is quite unlikely. While the government may pull off a project here or there, it lacks the track record of successfully running considerable operations in the medium and long term. To give the SGR a chance, the government needs to show a very high degree of resolve to address its future challenges
