Turkish firm lands $1.9B deal to build standard railway in Tanzania

By Our Correspondent, DAR ES SALAAM Tanzania

A Turkish construction firm on Tuesday secured a lucrative deal to build a 368-kilometer (229-mile) section of standard gauge railway line linking the largest port city in Tanzania with the hinterland, in a move highlighting confidence in its work.

The deal, which is expected to cost $1.9 billion is part of three out of four deals the company has so far clinched from the Tanzanian government as part of its broader push to finish a 1,219-kilometer (757-mile) railway line which is expected to unlock trade potential with the landlocked countries of Rwanda, Burundi and Uganda.

Officiating the contract signing ceremony between Tanzania Railways Corporation head Masanja Kadogosa and Turkish construction firm Yapi Merkezi Deputy Chair Erden Arioglu on Tuesday, President Samia Hassan said the 368-km stretch from Makutupora in the capital city Dodoma to Tabora would be built with borrowed money.

"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.

The project is part of the central corridor which will connect Uganda, Rwanda, Democratic Republic of Congo and Tanzania and provide access to Indian ocean for all related.

Kadogosa said the stretch will link Makutopora with the historical town of Tabora, in the country's central region and unlock potential for trade.

According to Yapi Merkezi officials, the railway line will establish a safe and reliable transportation between Dar es Salaam and other parts of the country.

After its completion, the railway is expected to bolster the overall economy of Tanzania especially in the field of trade and tourism, officials said.

According to Prime Minister Kassim Majaliwa, the use of rails instead of road transport will serve to reduced costs and save roads from destruction by heavy vehicles and conserve the environment.

President Hassan used the platform to dismiss critics of government borrowing, affirming her administration's intent to source for more loans for infrastructure development.

The Head of State said concerns about the country’s burgeoning national debt were misplaced, noting that critics were losing sight of the ultimate benefits of the critical infrastructure.

“As I said the investment so far is Sh14.7 trillion so if we do not carry on with the construction and complete it, the money we have invested will be worthless. So, either way we will have to continue borrowing… we will look for simple, effective ways to borrow,” said President Hassan.

Her defense came hot in the heels of Speaker of National Assembly Job Ndugai's attack on what he described as insatiable appetite for loans by the government.

The Speaker appeared to criticize continued government borrowing of foreign loans for local development projects.

"We have to question whether this trend is sustainable ....we risk the country being auctioned owing to its indebted," warned Ndugai in his uncharacteristic criticism of the government.

According to Ndugai, Tanzania would rather raise domestic taxes to fund its own development budget, arguing at Sh70 trillion, the national debt was a huge and dangerous burden.

The Speaker made reference to recently introduced mobile tax as an example, arguing that Tanzanians must be ready to shoulder the cost of their own development and not rely on the expensive foreign loans. He spoke at a different event in Dodoma.

But in her indirect response, President Hassan noted: "There is no way.. how we can raise this money through mobile money transaction levies or the taxes that we collect internally, we must borrow to complete this project.” She said adding that there are efforts to stall the country over the debts. - Africa