What SGR means for TZ economy

TANZANIA is poised to reap huge benefits through execution of the Standard Gauge Railway (SGR); a new important economic driver with high added value for growth and employment.

The Tanzania government, which is determined to build a well-developed modern rail system, has already signed five contracts with a total value of 16.7tri/- for the first phase of the ambitious project.

Through the first phase, agreements involving five lots of SGR covering 1,219 kilometres between Dar es Salaam and Mwanza have been signed. The phase will also traverse through Coast, Morogoro, Dodoma, Tabora and Shinyanga regions. Just recently, President Samia Suluhu Hassan witnessed the signing of an agreement for implementation of lot four, which covers a distance of 165- km between Tabora and Isaka in Shinyanga Region.

The government has already paid 6.4tri/- out of the phase of the project, according to Director General of Tanzania Railway Corporation (TRC), Mr Masanja Kadogosa, who added that the first phase is expected to create over 20,000 direct and indirect jobs for Tanzanians.

What is more, through local content arrangement, the ongoing implementation of the project has enabled 1,663 local contractors and suppliers to reap 1.77tri/- through provision of various services to the main contractor of the project Yapi Merkezi from Turkey.

Mr Kadogosa noted as well that the government has been able to save 2.9tri/- through signing of a lump sum contract between the government and contractor. “The said amount would have been paid in variations of costs caused by spiraling prices of fuel and building materials. The lump sum agreements give no room for variations on costs from the contractor,” Mr Kadogosa stated.

Construction of SGR between Dar es Salaam and Morogoro has reached over 95 per cent and the contractor has started testing the railway track using its own locomotive, while completion of Morogoro and Makutopora in Dodoma has reached 82 per cent.

Execution of the first phase between Dar es Salaam and Mwanza is expected to reduce travel from between 17 and 18-hours, a time presently spent by buses plying the route, to just eight hours. “A lot of jobs will be created during and after completion of the SGR project.

The private sector should thus make best use of opportunities to be accrued from the project,” President Samia said during the signing of the contract for construction of Tabora-Isaka segment. The Head of State said after signing of contracts for the first phase, the government is now working to raise funds for execution of the second phase which will cover Tabora and Kigoma and later Uvinza, Msongati and Gitega in Burundi.

She attributed her foreign trips abroad as among catalysts for securing funds for undertaking the mega project, noting further that her government is still working around the clock to solicit funds for construction of phase two of SGR.

SGR is the most widely used railway track gauge across the world, with approximately 55 per cent of the lines in the world using it since it has capacity to transport more passengers and cargo at high speed compared to Meter gauge Railway (MGR) which has been in use in Tanzania since the colonial era.

The government of Tanzania initiated the first phase of SGR in the year 2017 and plans are to construct two phases covering a distance of 2,561 kilometres to link Dar es Salaam, Mwanza, Kigoma, Katavi and neighbouring countries of Rwanda, Burundi, and DRC.

Tanzania is the first country’s in the East African Community (EAC) to undertake an SGR project which uses both diesel and electric-powered locomotives, which has a capacity to accommodate passenger trains travelling at 160 kilometers per hour.

Upon completion, the SGR will increase freight services whereby the railway will have the capacity to carry up to 10,000 tonnes of cargo per trip which is about 500 cargo trucks. It will also help to improve social community welfare through Corporate Social Responsibilities (CSR) through construction of schools and health facilities in areas along the railway line.

The SGR, according to Tabora Regional Commissioner, Dr Batilda Buriani, is expected to boost the agriculture sector through transportation of farm produce from upcountry to urban areas. Dr Buriani mentioned other sectors that are set to benefit as mining, business and industry sectors by ensuring safe and reliable rail transport of raw and processed agricultural products in Tanzania and neighbouring countries.

Among other benefits, the electric railway is expected to reduce carbon emissions by a half compared to diesel-powered trains used by other countries in the region. Figures from the UK Rail Safety and Standards board show some diesel locomotives emit more than 90 grammes of carbon dioxide per passenger per kilometre, compared with about 45 grams for an electric train.

Rail electrification is an important part of any country’s carbon reduction strategy.

According to the UK’s Department for Transport, an electric train emits between 20 per cent and 35 per cent less carbon per passenger than a diesel train. The first segment of SGR covers over 300-kms between Dar es Salaam and Morogoro while the second segment between Morogoro and Makutopora in Dodoma covers 422- kms.

From Makutopora, the railroad will traverse 294- kms to Tabora and from there it will cover 165- kms to Isaka and eventually 249- kms from Isaka to Mwanza.

According to information availed by TRC, 80 per cent of the SGR will be constructed parallel to the existing MGR while the remaining 20 per cent of SGR alignment diverge from metre gauge to avoid corner and other obstacles due to its high speed.

During the signing of the contract for construction of the Tabora-Isaka segment, TRC also inked an agreement with Korea National Railway (KORAIL) for capacity building of Tanzanians who will be tasked with operating railway services once the SGR is completed. Construction of the Tabora-Isaka section which is part of phase one of SGR along 1,219- kms between Dar es Salaam and Mwanza covers 165- kms and will cost US 900.1 million dollars (about 2.094tri/-).

President Samia was impressed that during her one-year tenure in office, the sixth phase government has been able to accomplish procurement of contractors for construction of the first phase of SGR between Dar es Salaam and Mwanza.

She attributed her foreign trips abroad as among catalysts for securing funds for undertaking the mega project, noting further that her government is still working around the clock to solicit funds for construction of phase two of SGR. Phase two of SGR will cover about 1,010-kms between Tabora and Kigoma, where it will be extended to Uvinza-Msongati and Gitega in Burundi where it will be connected to DRC.

“Once connected to our land-linked countries like Burundi, DRC, Rwanda, Uganda and South Sudan we will have access to a market of over 300 million people in the region,” Ms Samia remarked.

The Minister for Works and Transport, Prof Makame Mbarawa said the procurement process for the second phase is in the pipeline.

“We (Tanzania) have already signed agreements with Burundi and DRC on extension of the railroad to their countries. A feasibility study is currently underway for extension of the SGR to the neighboring countries,” the minister explained.

Extension of the SGR to Burundi and Rwanda and later Democratic Republic of Congo (DRC) is aimed at tapping transportation of heavy minerals such as nickel from Ngara in Tanzania as well as m DRC such as cupper from DRC.