$5.2 BILLION RAILWAY PROJECT TO EASE INLAND HAULAGE COST FROM TANZANIA, RWANDA AND BURUNDI

The New Times, Dar Es Salaam | 30Th April, 2016

The Dar es Salaam-Isaka-Kigali/Keza-Musongati (DIKKM) standard gauge railway (SGR) project is progressing well, an official said. Eng. Jules Ndenga, the acting special project implementation unit coordinator at the Ministry of Infrastructure, said this following a recent joint technical monitoring committee meeting in Arusha, Tanzania.

“Tanzania, Burundi and Rwanda are continuing the joint development of the DIKKM railway project. The recent meeting in Arusha was a joint technical meeting aimed at extending the contract for the transaction advisory services that had expired on December 31, 2015,” Eng. Ndenga told The New Times last week from Kampala, Uganda. The extension of services being processed will end this month.

The Arusha meeting, which was attended by officials from various entities, including finance, environment and land departments from the three countries agreed on the contract terms and conditions and the Rwanda Transport Development Agency (RTDA), will procure it on behalf of the three countries.

Eight firms have been prequalified to bid for the construction of the standard gauge railway to link the port of Dar es Salaam in Tanzania to Rwanda and Burundi as the region seeks to lower transport costs.

Details of prequalified firms to finance, design, build and operate the proposed 1,665km long railway are however scanty. The project will cost about $7.6 billion, making it one of the East African Community’s biggest railway project. “I cannot name the firms that have been prequalified. But about 60 per cent are from China,” said Imbuchi Onyango, a technical expert on railways at the East African Community Secretariat.

MAP OF NEW RAILWAY ALIGNMENT source AfDB, 2015

The Dar es Salaam-Isaka-Kigali-Keza-Musongati railway, is a high priority project within the framework of the East African Railway Master Plan. According to the Rwanda Transport Development Authority, at least 172 km of the route will be in Burundi and 123km in Rwanda.

There will be 407km of new alignment in Tanzania from Keza to Isaka, and 970km paralleling the existing metre-gauge line between Isaka and Dar es Salaam.

Mr Onyango would also not reveal when governments of Rwanda, Tanzania and Burundi are likely to call for the bids, saying the African Development Bank (AfDB), the major financer of the project, has to issue a no-objection note on the prequalified firms.

Mr Onyango described the prequalified firms as experienced and financially sound and thus able to deliver the project in time. “The list of prequalified firms has been sent to the African Development Bank for a no-objection note before they bid,” said Mr Onyango in Kigali.

The East African states are under pressure from the business community to develop an efficient railway system to reduce the costs of transport.

High transport costs in East Africa have been cited as a serious challenge to the region’s ability to compete effectively with the rest of the world in trade. For instance, importers say it costs Rwanda on average $4,990 to import a 20ft container while the sub-Saharan average is $2,504, which makes the country uncompetitive in cross-border trade

The estimated cost of standard gauge railway project is $5.2 billion.

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