China is back as one of the
potential financiers of Tanzania’s flagship standard gauge railway project,
Foreign Affairs Minister Palamagamba Kabudi confirmed this past week.
“The Chinese government has
declared its intention to support the SGR construction at a later stage, and is
now doing its own evaluation of the project before engaging us in further
talks,” Prof Kabudi said, after attending a co-ordination meeting of the
Forum on China-Africa Cooperation (FOCAC) in Beijing.
The SGR, stretching 1,457km from
Dar es Salaam to western Tanzania, is one of the mega-infrastructure projects
being touted by President John Magufuli’s government as key to its
industrialisation agenda over the next decade.
The budget for the railway is
$7.5 billion, with a five-year completion timeline.
Earlier plans for China’s Exim
Bank to provide most of the funding for its construction fell through after the
administration rejected the Chinese in favour of a Turkish-Portuguese
consortium.
After that deal failed, Tanzania
declared that it would pay for the project out of its own pocket. That has
worked for the first two phases of the project, Dar es Salaam-Morogoro and
Morogoro-Makutupora, covering 726km and costing Tsh4.89 trillion ($2.5
billion).
Tanzania Railways Corporation (TRC)
officials say the first phase of the project (Dar-Morogoro) is two-thirds
complete, and preparatory work on Phase Two (Dar-Makutupora) is underway.
However, funding has become an
issue. TRC communications manager Jamila Mbarouk confirmed in an interview with
The EastAfrican this past week that:
“The government is now
striving hard to get some financing assistance in order to complete the
remaining phases of the SGR construction, starting from Makutupora to the Lake
Victoria zone and the western part of the country — covering about
731km.”
The Tanzanian parliament last
month approved a Tsh2.5 trillion ($1.1 billion) allocation in the country’s
2019/20 budget for the SGR project, almost half of the entire Ministry of Works
development expenditure budget for the year.
China is understood to have also
told Kenya and Uganda to work on their respective financing modalities for
their joint SGR project in order to receive funding.
China had initially declined to
fund the project, with analysts saying the risk of default for both countries
was high.
For the full article visit: https://allafrica.com/stories/201907080040.html
