The timelines for the construction of Tanzania Standard Gauge Railway have become hazy as reports from Tanzania indicate that the Tanzanian Government is struggling to find financiers for its proposed $1.2 billion standard gauge railway.
“There are questions on the viability of this project,” an official was quoted by the media as saying.
A group of MPs recently said the project is likely to stall due to lack of financing unless the government considers alternative sources of funds outside low-interest loans such as a 15-year railway bond.
The president has in the past few months lobbied heads of state and international financial institutions to help raise money.
For now, no one can tell when the project will commence.
Last week, South African president Jacob Zuma visited Dar es Salaam to help Tanzania secure loans from the Brics Development Bank.
Brics is an association of emerging economies, Brazil Russia, India, China and South Africa.
“I have asked President Jacob Zuma to help us secure a low interest loan from Brics to finance particularly the SGR project,” President Magufuli said.
However, Brics remains reluctant to finance the project.
President Magufuli had also requested the World Bank President Dr Jim Yong Kim to help in financing the project.
The World Bank claims that it is not viable. World Bank instead has issued $200 million to renovate the old railway line.
A Chinese company awarded the contract to build the railway by the Jakaya Kikwete government had its contract suspended by President Magufuli over questions in the tendering process.
The SGR which will now be constructed by Reli Assets Holding Company (RACHO) is the first phase of the Central Railway Corridor (Dar-es-Salaam –Mwanza).
The construction of the 205 km section between Dar-es-Salaam to Morogoro was planned to be completed within 30 months.
The Tanzania SGR which will use electricity full-time is designed for a maximum speed of 160km/h for passenger trains and 120km/h for freight.
Northern Corridor
Construction of the Northern Corridor line is now progressing towards Naivasha to the west of Nairobi while the section between Mombasa and Nairobi is set to be launched in 5 days.
Uganda is expected to start construction of the 273km link between Kampala and Malaba later this year.
Construction of that phase will take 3 years — the time Kenya is expected to have extended its line to the border with Uganda.
Kenya secured funding for the Nairobi-Kisumu SGR last week during Uhuru Kenyatta’s visit to China.
Ugandan officials say that discussions for financing from China EXIM bank are soon to be closed and construction set to begin this year.