Tuesday, 2 October 2012

Construction of Tanzania’s” bridge over the sea” begins

A prototype of the entire project on Kigamboni side
CONSTRUCTION OF THE long awaited Kigamboni Bridge in Dar-es-salaam, Tanzania, has begun. Tanzania’s President, Jakaya Kikwete, laid the foundation stone two weeks ago, signaling the beginning of construction works.

 The US$138 Million toll-road will be completed in 36 months. The works include the construction of a 680M long-four lane - bridge across the Indian Ocean, 2.5 Km of six lanes highway, pedestrian paths and a toll plaza

The bridge will be linked to Dar city by a 1.0 KM six lane highway while to Kigamboni; it shall be linked by a 1.5 KM six lane road. In total the works include the bridge and 2.5 KM of roads, all totaling 3.2 KM.

 According to a note from Tanzania’s Ministry of Works, the bridge is a joint venture between the Government of Tanzania and NSSF.  NSSF will own 60 per cent stake while GOT owns the rest.  The same note says that on completion its management will be concessioned for 25 years.

 The project will be constructed by two Chinese firms viz: China Railway Construction Group and China Major Bridge Engineering.

The project had been in the drawing board for nearly four-decades. It was mooted in the 1970s but was held back by financial constraints. During its four decade wait, the costs have risen four-fold from US$33 million in the ‘70s to $138 million to date.

 At one point in early 2000s the project was advertised as a BOT project but all 105 bidders later withdrew their bids, underscoring the private sectors unwillingness to undertake certain risks.

 Now the government and its social security fund, NSSF, have teamed up to build the structure and then concession as a toll-road and concession its management and maintenance to the private sector. This is more practical PPP model in east Africa: The public sector builds a public infrastructure and then concessions management of the asset to the private sector.  It has major advantages compared to other PPP models.  
A prototype of the bridge over the sea

Private sector investors do not have the stomach for construction risk. Officials blame this unwilling to take construction risk as the reason for the delay in implementation of the project.  According to officials, at one time, some 105 bidders who hoped to build the project using private funds simply withdrew, leaving the government holding the baby so to speak.

To ensure that a policy project which engenders low financial return but high economic benefits is developed, the public sector undertakes the construction risk, leaving then management and maintenance risk to the private sector. Kigamboni is a policy project in that it is meant to open up Kigamboni area for development.

Kigamboni Bridge and related works is a policy project in that it is meant to open up Kigamboni district for development. This is a beach fronted district which is suitable as a resort city. However, it is constrained by the traffic snarl up at the Kivukoni ferry. The government of Tanzania plans to develop a resort city on a 6,400 acre area at an estimated cost of US$6.7 billion. A resort city is a city in which the major economic activity is tourism and related services and Kigamboni is best suited. 

In fact, government officials complain that tourists just pass through Dar-es-salaam on their way elsewhere because of lack of accommodation. They argue that developing a resort city in Kigamboni will increase the period in which tourists stay in the city.  It will also raise the status of Dar-es-salaam as a conference city. The city will raise the population of Kigamboni tenfold, officials say, rising from the current 45,000 to 450,000 on completion.

The secondly benefit of government developing policy projects is that user fees being is designed to be low. Low-fees ensure optimal use of the structure by both foreigner and citizens alike. For instance in Kenya the Concessionaire on Thika super highway will charge US$0.02 cents per Kilometre for cars and $0.04 for heavy trucks. Low fees will ensure optimal use of the structure.  It is expected the Tanzanian rates will not vary widely from the Kenya rates.

 It is expected that the construction of the city will commence in 2018 or thereabouts. This is to enable the completion of the bridge and its related works for use by heavy trucks transporting building materials to the city. The completion of the bridge will also make the city more attractive to investors.

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