Blow to Northern Corridor as Tanzania signs deal to link SGR to Burundi, DRC

Sunday December 8 2019

The faster moving SGR trains

The faster moving SGR trains offer an opportunity to reduce the time and high transport costs that the landlocked countries currently have to bear. SHUTTERSTOCK 

EMMANUEL ONYANGO
By EMMANUEL ONYANGO
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Tanzania has signed an agreement to link its Standard Gauge Railway (SGR) to Burundi and the Democratic Republic of Congo, in a deal that gives Dar es Salaam’s multi-billion-dollar project a major shot in the arm.

Transport ministers of the three countries Isack Kamwelwe (Tanzania), Jean Bosco (Burundi) and Roger Biasu (DRC) signed the agreement this past week in the port town of Kigoma.

The SGR link gives landlocked Burundi and DRC direct access to the Dar es Salaam Port, greatly boosting Tanzania’s Central Transport Corridor.

The development is, however, a blow to Kenya’s Northern Transport Corridor, which had marketed its own SGR as the cheaper and more efficient route for East Africa’s landlocked countries including Burundi and eastern DRC.

“This agreement is in line with the completion of a preliminary feasibility study of detail design plans which was successfully done by the consultancy company Gulf Engineering Ltd based in Uvinza,” Mr Kamwelwe told The EastAfrican.

The first phase of the construction will start from Uvinza district in Kigoma region in north western Tanzania to Gitega, via Msongati region, in Burundi, covering a stretch of 240km. The railway will then be extended to the eastern regions of DRC according to the agreement.

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The proposed Tanzania SGR map. PHOTO | TEA
The proposed Tanzania SGR map. PHOTO | TEA

Tenders for the project will be floated next year, according to the ministers.

The total cost of the project is yet to be established but each country will have to finance its own portion, Mr Kamwelwe said.

“The two countries have expressed their optimism and commitment in supporting the SGR project as both depend largely on Dar es Salaam Port for exports and imports,” Mr Kamwelwe added.

The faster moving SGR trains offer an opportunity to reduce the time and high transport costs that the landlocked countries currently have to bear.

Tanzania’s SGR line will, on completion, stretch for 1,457 km from Dar es Salaam to the shores of Lake Victoria.

It is among the ongoing mega infrastructure projects in the country, and is estimated to cost Tsh14 trillion ($ 6.5 billion) over the next five years.

About a year ago, Tanzania signed an agreement with Rwanda for an extension of the SGR line from Isaka (Tanzania) to Kigali (Rwanda), covering 575km.

A detailed design for the extended line has already been drawn.

Both countries are going to finance the project at a total cost of $2.5 billion, of which Tanzania will pay $1.3 billion and Rwanda $1.2 billion. Rwanda will incur another expense to cover the extended line to Rubavu, covering a stretch of 221km.

DRC’s President Felix Tshisekedi during his state visit to Dar es Salaam four months ago said that the extension of the SGR line to Rubavu from Kigali would open trade opportunities for the landlocked DRC which depends largely on the ports of Dar es Salaam and Mombasa to access the sea.

According to Mr Kamwelwe, the detailed design along Uvinza-Gitega line is complete. Burundi is looking for funding to complete a detailed design plan for the remaining portion from Gitega to eastern DRC.

Tanzania is also yet to get full funding for its own SGR line, although it is eyeing Chinese support which two months ago declared its intention to finance the project.

Dar es Salaam is currently funding its own SGR, straining its annual budget as it takes away funding intended for other projects.

Another potential financier, ‘Trade and Development Bank for Eastern and Southern African,’ two weeks ago expressed its intention to give a soft loan to the Tanzanian government to help fund the project.

The Bank’s President, Dr Admassu Tadesse, made his pledge to co-operate with Tanzania to facilitate funding of mega economic projects currently going on across the country.

The Minister for Finance and Planning Dr Phillip Mpango met with the bank’s president in Dodoma.

Tanzania will become the third country in East Africa to start enjoying modern railway services after Kenya and Ethiopia.

Kenya, was the first in the region to start constructing an SGR line, completing over 500km between Mombasa and Nairobi, and also inaugurating its passenger services in June 2017.

Phase two of the project has also stretched to Mai Mahiu but stalled due to lack of funding amid queries over its economic viability.

The Kenyan SGR, which has cost nearly $4.9 billion, was planned to go all the way to the Ugandan border and later extend to Kampala and Kigali.

The fate of the subsequent phases from Naivasha to Kisumu and then to Malaba at the Ugandan border hangs in the balance.

If executed, the Tanzanian to DR Congo SGR could raise even more doubts on the viability of the Kenyan line given that the two are competing for the same cargo.

China has asked Kenya and Uganda to work on their respective financing modalities for the joint railway in order to receive funding for the project, Uganda’s Finance Minister Matia Kasaija was recently quoted as saying.

The Chinese funded the initial two phases of the Kenyan SGR, but declined to bankroll subsequent phases citing public debt default risk.

The Mombasa to Nairobi SGR has failed to attract anticipated cargo volumes, which has seen the government force all importers to transport inland-bound goods on the new line.

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