BusinessDay

Tanzania’s $1.9bn with Turkey to deliver 368km of rail tract

Tanzania is turning away from China as it seeks to rebuild its vital railway links and has instead turn to Turkey in a deal that holds more than one lesson for Nigeria, the continent’s biggest economy.

On Tuesday, Tanzania signed a contract with Turkish firm Yapi Merkezi to build a 368 km section of standard gauge railway that is expected to cost $1.9 billion.

The contract has been hailed as frugal and a smart choice given the cost per kilometre of rail track delivered in comparison to Nigeria’s secretive deals with China which have been criticized for their huge cost outlays.

In addition, the choice of the Tanzanian rail is strategic with the biggest possible impact on the economy while in Nigeria, the impact of the Chinese built rail has been muted at best.

This contract is part of a 1,219 km line which Tanzania is building to help boost trade with neighbouring countries and Yapi Merkezi is already building two other sections which are near completion.

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The section announced on Tuesday will link Makutopora with Tabora, two towns in the country’s central region, Masanja Kadogosa, director general of Tanzania Railway Corporation (TRC), said in a televised ceremony.

The full line will connect Tanzania’s Indian Ocean port and commercial capital of Dar es Salaam with Mwanza, a port city on the shores of Lake Victoria which straddles the borders of Tanzania, Uganda and Kenya.

President Samia Suluhu Hassan said at the ceremony that Tanzania would borrow to finance the project.

“We will find friendly loan facilities and the best ways to get loans. We won’t get this money from levies or from domestic taxes,” she said, adding they were giving priority to the project because it connects Tanzania to its regional neighbours.

The east African country is currently implementing mega infrastructure projects to support its industrialisation plans including a controversial 2,115 megawatt hydroelectric dam being built in a UNESCO world heritage site

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