Wednesday, 3 January 2018

Why Tanzania should abandon Regional SGR


The region marked in red is waste of
Good Money
Tanzania should abandon its regional SGR ambitions for now. She should instead focus on and develop a domestic SGR.  The regional SGR is spending good money chasing after bad money.

This is why; Uganda has chosen to build her Standard Gauge Railway link through the Northern corridor to the Mombasa Port. Uganda’s departure puts the viability of the Central Corridor and the Dar-es-salaam Port as a regional transport hub, in doubt.

The feasibility study on the Dar-Es-salaam, Isaka, Kigali, Keza- Musongati ( DIKKM) Railway Project, as the Central Corridor line is called, shows that the traffic flow on the line is low and that, to make a minimum return on investment, it must ship 8.5 million tons per year.

Tanzania on her own can generate an estimated 3.1 million tons of freight per year; Rwanda, including DRC 2.3 million tons and Burundi 3.1 million tons. These numbers are estimated at what is called the conservative low growth.
Kenya has already hit the ground
 running, attracting Uganda


Higher freight traffic, says the feasibility study, is possible if the Railway line diverts part of the traffic that is shipped through the Northern Corridor.  This is why, say analysts, the Tanzanian government, attempted to woo Uganda away from the Northern corridor in favour of the Central corridor.  Uganda ships an estimated 10 million tons of cargo a year.
Now that Uganda has changed her mind, Tanzania has to re-think its investment on SGR urgently. If Rwanda, favors the Northern corridor, Tanzania will be alone in the project given the economic and Political turmoil in Burundi.
Tanzania, given the current uncertainties, is free to change its mind about where to invest the US$7.6 billion slated for investment in the Central corridor. She should abandon the extension of the line beyond Isaka to Keza and Musongati. The 413 km of Greenfield Railway will be a wasted investment. At the current rate of US$5 million per kilometer, Tanzania will waste US$ 2.075 billion dollars.
Instead, this money should be spent on the proposed Dar-es-salaam Mtwara line.  Mtwara, which is rich in Coal and Iron ore deposits, is roughly 556 Km from Dar-Es-salaam. At the current rates, this line will cost US$2.78 billion to open Mtwara‘s mines for exploitation and transport the coal inland to cement manufacturers and other users upcountry.
The DIKKM feasibility study ignored the domestic freight focusing only at exports and imports.  But the coal mines and cement manufacturers in the Mtwara region could supply enough tonnage to sustain the Railway line.
Despite spirits effort by Magufuli(R) Museveni (L)
 chose the Kenya loop
 
Further, a railway line has direct economic links with the local economies of the areas it traverses, opening them to exploitation, thus spurring unforeseen economic activity.
The Central Corridor will traverse several high potential towns to wit: Morogoro, Kilosa, Dodoma, Manyoni, Tabora, Isaka and Shinyanga. Extending the line to Mtwara will raise the number of major towns served by the line to eight from the current seven.
These towns are expected to grow rapidly as economic zones in the short run due to ease of transport.  A number of new sectors will sprout in addition to agriculture and mining. These include; tourism and related services, distribution, building and construction. This growth will spur economic activity within the cities and their hinterlands that would feed on the railway line.
Demand for transport services will also escalate and, given the state of roads in Tanzania, the bulk of this demand will be met by the railway line which is safer and faster compared to road transport. The result is: Tanzania will end up generating more internal passenger and freight traffic than anticipated. Such potential should be meticulously natured.
The greatest bottleneck in Tanzania especially, for agricultural produce and other sectors, is transport and power supply. This means that both enabling infrastructure categories must be developed simultaneously in order to spur growth.
One other potential that was down-played in the feasibility study is passenger traffic. Experience in Kenya shows that passenger traffic can generate significant revenue. The Nairobi- Mombasa section has generated great interest in passenger travel because of speed and cost and is running four trains per day only five months after launch.
In Tanzania, given its vast territory, the demand for passenger trains is higher than in Kenya. The high-speed trains could soon become a major incentive for passenger travel and generate significant revenues.
The drudgery of travel is the greatest disincentive for travel. High-speed travel in a reliable and safe mode will spur domestic tourism in Tanzania.

 The Central Corridor is the longest rail route in one country in East Africa. It also has the largest potential to spur well-distributed economic activity in the country which, in turn, will generate higher demand for its services. 

7 comments:

  1. you are a kenyan ,so no hard feelings

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  2. Did you read the article with an open mind? If you did, please re-read. My point is simple; Tanzania should spent the money it is wasting on the project-west of Isaka to develop and open Mtwara region. It will generate sufficient tonnage to keep the line afloat. Burundi and Rwanda are a bad bet.Even Kenya treats these two as side-shows.

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  3. I have read the article open minded and got to the conclusion that,first it seems like your trying so hard to persuade us to abandon the most lucrative n potential sources of income n market the central corridor has to offer and leave them to be taken n dominated/monopolized by northern corridor"Kenyan's".
    I don't know how or why you left a certain point n turn it up side down like when you said that individual regions of our beautiful mother land are more profitable to persue than individual countries like Rwanda with a total population of almost twelve million people and a GDP of almost 6$ billion dollars and something? And that is just one country we are talking about, there is Burundi and "Congo with a very vibrant economy and a population that is way bigger than ours"?
    We Tanzanians are not stupid no short minded as you "Mr.Musyoka wa Kendo" think we are, we are just playing it cool and simple, we know what we have n don't have, we just don't brag about everything we plan or implement.
    Central Corridor is just one part or first phase of our program/project to develop this Mighty Nation and a sleeping Giant of ours but the Mtwara Corridor is our second project n it doesn't start from Dar to Mtwara as you have sugested noooo my friend it will start from Mtwara port to Mbamba bay at the shores of lake Nyasa n connect with the markets of Malawi, Northern Mozambique, Zambia, Southern Congo n as far as Zimbabwe. You said something about coal and iron ore from mtwara to Dar which shows that you do lack knowledge of Tanzania n its minerals.
    Coal n Iron ore are not found in Mtwara but further inland from Mchuchuma n Liganga around Rukwa n Mbeya regions and close to the shores of lake Nyasa, and this railway line project is estimated to be "1000 km long" and not 556 as you have said in your long article.
    The third project will be the Tanzanian northern corridor from Tanga port/shores to through Moshi, Arusha all the way to Musoma at the shores of lake Victoria. This corridor is connected to the Central Corridor in two places first from Dar to Tanga and from Musoma to isaka all the way to Mwanza......
    Once all the roots are done probably even before our dear President Uncle Magufuli has left the seat in 2025, Our dear neighbors, brothers and sisters you will be running for your lives n have nothing to advice us with.
    Now this is my advice to you Sir wherever you are, we Tanzanians know exactly what we are doing with our Country n do not need to be forced fed advices that very biased n lack the deep sense of knowledge of our national economic development goals and stategy.

    My sincere advice to you Mr. Musyoka wa Kyendo it's always a good thing to share experience, advice each other as brothers and sisters and unless you can help us with the much needed funds that we really need for those projects, I suggest these issues of Tanzania's progress on development projects and programs, "MY FRIEND AND BROTHER YOU SHOULD JUST SIT DOWN, COOL DOWN AND ENJOY THE RIDE".

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    Replies
    1. I give up. I have spent days trying to understand your post. I cannot so I give up. But Just a question will people turn to freight? We are talking about tonnes of freight, not people. Will unstable Congo invest on the last mile? is it possible for Dangote cement, to generate more tonnage for the railway line, than Burundi, Rwanda and DRC combined?

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  5. From Dar es Salaam to Mtwara? What for yet there is a port in Mtwara? You would rather have advised Tanzania to develop the Southern Corridor from Mchuchuma/Liganga coal mines to the Mtwara port. But then, you are a KENYAN so such an article is hardly surprising coming from you!

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