High costs stymie standard gauge plan

CHRISTOPHER MAJALIWA in Dodoma

MINISTER for Finance and Planning, Dr Philip Mpango winds up his speech on the National Development plan in the House in Dodoma yesterday.(Photo by Fadhili Akida)

THE government yesterday noted that the envisaged multi-trillion shilling central railway line project that was to be rebuilt to standard gauge level is for now too expensive for Tanzania to finance through own funds.

Finance and Planning Minister Dr Philipo Mpango said this yesterday when wrapping up the debate for the 2016/2017 development plan and budget framework.

Dr Mpango told the parliament that for the 15tril/- project to be commercially viable, it has to run through Burundi, Rwanda and the Democratic Republic of Congo (DRC).

He explained that it was hard to carry out the project through Railway Development Levy as it was previously suggested by some MPs.

The Minister noted that if such approach was to be applied “it was going to take the country over 300 years to complete the project”.

Funds generated through Railway Development Levy, according to the Minister stands at an average of 50bn/- per year. Dr Mpango noted that the government has not ignored the project, insisting that his ministry was one of the key stakeholders, as it depended on the venture as a backbone for the country’s economic growth.

“Just to set the record clear, Tanzania cannot afford financing the project using our own funds.” He expounded that through the support of the World Economic Forum (WEF) and African Development Bank (ADB), the central corridor has been found most commercially viable, thus the government was doing all it could to implement it.

“WEF and ADB are working closely with Tanzania to raise the required funds. The project will only be viable through Public Private Partnership (PPP).”

He noted that there are Chinese and American companies which have already shown interests to invest in the project. “We are going to look into the matter with our colleagues in transport ministry and see how we can implement the project,” he said. However, the Minister could not state exactly when the project would begin.

He noted that it was also important to consider improving the country’s major water gateway--Dar es Salaam port. In May last year, the then Transport Minister, Mr Samwel Sitta, issued a statement to Parliament, declaring that a Chinese consortium led by China Railway Materials, was awarded a $7.6 billion contract to build a 2,561km standard gauge railway from Dar es Salaam to Burundi, Rwanda and DR Congo.

According to Dr Mpango, the contract was revoked after the Public Procurement Regulatory Authority (PPRA) found that there were flaws in its tendering. Under the previous plan, the former President Mr Jakaya Kikwete, was listed to launch the construction project on September 15 last year.

Speaking to reporters yesterday, Msalala MP on CCM ticket Ezekiel Maige said that the government should take the issue more seriously and immediately see how the project can be financed.

“It is very expensive, fine. And we can’t afford it through our own funds, the government however is obliged to look for funds like raising sovereign bond,” he noted.

A number of MPs here on different times when contributing to the plan had tasked the government to come up with a detailed plan on how to implement the project or else they were going to block the 2016/17 budget.

MPs whose constituencies have a direct stake in the central line have already formed the so called Parliamentary Railways Caucus, chaired by Mr Ezekiel Maige, with Mr Zitto Kabwe (Kigoma Urban-ACT) serving as secretary among others, to push for implementation of the project.