Tanzania signs $2.2billion final SGR section deal with China

Published: December 22,2022

President Samia Suluhu Hassan speaking to various leaders immediately after the signing of the Contract for the Construction of the Standard Gauge Railway (SGR) section of Tabora to Kigoma (km 506) at an event held at State House in Dar es Salaam

Summary

• President Samia, who witnessed the signing, said the construction of the 506 km final section of the Standard Gauge Railway (SGR) from Tabora to Kigoma would be completed in 2026, nine years after it began.

President Samia Suluhu Hassan on Tuesday, December 20 witnessed the signing of a $2.2-billion contract with Chinese companies CCECC and CRCC to build the final section of the Standard Gauge Railway line aimed at linking the country with its neighbours in the West.

The 2,561-kilometre network will link the port of Dar es Salaam to Mwanza on Lake Victoria, with eventual spurs to Burundi, Democratic Republic of Congo (DRC), Rwanda and Uganda.

President Samia Suluhu Hassan, who witnessed the signing, said the construction of the 506 km final section of the Standard Gauge Railway (SGR) from Tabora to Kigoma would be completed in 2026, nine years after it began.

 President Samia Suluhu Hassan witnesses the signing of the Contract for the Construction of the Standard Gauge Railway (SGR) section from Tabora to Kigoma(km 506) between the Government through Tanzania Railways Corporation (TRC) by its Director MasanjaKadogosa and Representatives of joint venture companies CCECC and CRCC on December 20, 2022

“Upon completion of the SGR, Tanzania will be in a better position to utilise its strategic geographical positioning to facilitate cross-border trade,” she said.

President Samia said Tanzania’s investment in the SGR had now reached $10.04 billion or Sh24 trillion, including the latest contract.

“We have to borrow for this important infrastructure and other sustainable development projects because we don’t have enough local resources,” she said, dismissing criticism that the country was taking on too much debt.

She said the new railway would reduce cargo transportation costs between the Dar es Salaam port and the DRC from a minimum of $6,000 per tonne to about $4,000 once it becomes fully operational.

Meanwhile transportation time would fall from 30 days by truck to 30 hours in 2027.

China is the biggest investor in Africa, pumping billions of dollars into railroads, ports and airports in exchange for securing oil and commodity supplies such as copper and cobalt.

These infrastructure projects are built through vast loans issued by China, but Beijing has been criticisedfor lending too much to poor countries, without sufficiently scrutinising their ability to repay.

Tanzania’s railway system has two existing networks, Tazara which links Dar es Salaam to Zambia and the other connecting it to Kenya and Uganda. 

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