Decommissioning " fiction analysts" In East Africa

 The Tanzania Railways Corporation is inching towards commissioning the Standard Gauge Railways in the near future. At the same time, it will decommission a lot of “fiction analysts and Writers” as the reality of the line hits home. In fact, the process has already begun.

             Analysis of Hardware for each of the three lines

Corporation

Locomotives

Coaches

wagons

Total

ERC

41

 

1130

1171

KRC

57

40

1620

1717

TRC

17

80

1420

1517

The three top largest and most robust economies in East Africa will each have a Standard Gauge Railway line. There will be no room for fiction anymore. The narrative will shift to “what is,” from “what should be.”  We will be ticking the boxes on each line and comparing them. Two of the boxes can be checked already, the costs and quality of the lines, and the cost and quantity of rolling stock and facilities.

Tanzania has yet to put the hardware on the rail. So we save her the third box –efficiency of operations and impact of the line on the economy.  I must confess; I am afraid that I am being sucked into the fictitious narrative because it is not clear when the Tanzanian line will begin running. Several previous deadlines have come and gone with no trains on the track. That is why, I am confining myself to what is known- the facts- that are already in the public domain.

The first phase of the Tanzanian SGR, the 300Km Dar-es-salaam- Morogoro section cost some US$1.215 billion or $4.02 million per kilometer. It is AREMA standard, an acronym for American Railways Maintenance Standard. The Ethio-Djibouti line cost $3.4 billion or $3.92 million per kilometer. Some sections cost more but let’s work with US$3.92 million. It is the Chinese Class Two standard, CS2. The Kenyan SGR cost $3.89 million per kilometer for a total cost of $2.66 billion. It is a Chinese Class One standard.

The classes are differentiated by the density of the line. Class one weighs 60kg per meter while the other two classes weigh 50 kg per meter. Therefore, the Kenya line is superior to the other two regardless of aesthetics such as electric engines.

The Kenyan contract was an EPC contract to CRBC for both the construction of the Railway line, its ancillary facilities, and equipment and installations including the Locos, and rolling stock.  In fact, there were two contracts won by the same company at separate times. The first contract for the construction of a standard Gauge Railway between Mombasa and Nairobi was signed on July 11, 2012, and the second contract was signed three months later in October 2012.The second contract worth US$1.144 billion was for the supply and installation of facilities, Locomotives, and rolling stock, documents in our possession show. The entire project costs $3.84billion.

 Comparison of  cost per Kilometer 

Corporation

 $m /KM

ERC

3.92

KRC

3.89

TRC

4.05

The Tanzanian Central Corridor is a design and build contract. That is why she is contracting other companies for Engines and rolling stock. These new contracts will raise the SGR cost by an estimated $400 million to more than $1.615 billion for the Dra-es salaam –Morogoro section.

For US$400 million, Tanzania will buy 17 Locomotives, 80 passenger coaches, and 1,420 wagons, a total of 1,517 units.  On the other hand, for US$1.144 billion Kenya bought 57 locomotives, 40 passenger coaches, 1620 wagons, and 2 cranes, a total of 1,719 units. Ethio-Djibouti for its part bought 1,171 units at a price we could not establish.

Tanzania, we can predict, will be shopping for locos sometime in the future, as the 17 ordered from a South Korean manufacturer are insufficient for a 2,000km long line.

The phased investment in the project by Tanzania makes economic sense. They start by “feeling the stones” before taking the plunge- a realistic economic approach if you ask me.  It is a reflection of concerns that the line could take a long to build demand for its services. The Central Corridor is not a popular route among importers in East and Central Africa. The Northern Corridor- which traverses Kenya- is the popular route even by road.

This means that the Central Corridor’s business will be subdued for a while as conditions within her potential market crystalize.  Alternatively, Tanzania will have yank away business from the Mombasa Port in Kenya. There are serious concerns regarding this approach.

Among them is the size of investments required to make it feasible. The Kenyan Port is three times larger than Dar-es-salaam Port. Further, transit time between Kenya’s Port of Mombasa and Uganda, the largest import destination for the Kenyan Port, is just 24 hours by SGR or slightly over 1,250 Km. Even with the SGR and MGR combined travel time will not exceed 36 hours. The trip by road takes roughly five days.

On the other hand, the distance between Dar-Es-Salaam Port and  Mwanza Port on the shores of Lake Victoria is 1280Km. Between Mwanza and Port Bell in Uganda is 320 Km of water. This means that a single train of merchandise destined for Uganda will have to be offloaded from the train at Mwanza and loaded onto Ferries.  A single train carries 216 TEUs while a single Ferry carries 44 TEUs. To transport a single train of Ugandan Merchandise will thus require an additional investment in five ferries.

An official Uganda report assesses that this trip will take three days adding a rider –“and that is being optimistic.” The report, therefore, concluded that the “Central Corridor a low-priority route for Uganda.”

Therefore, phased investment in rolling stock would ensure that Tanzania Railways Corporation is not stuck with idle capacity.  

We digress. We were talking about the cost of the Railway line and the point we were driving home is; the cost of rolling stock and Locos should be divorced from the cost of building the line. Without the rolling stock and installations, the Kenyan line cost $2.66 billion to build which works to $3.89 million per kilometer. The Ethio-Djibouti line cost $3.92 million per kilometer while the Tanzanian line cost $4.02 million without the rolling stock. Both Kenya and Ethiopia-Djibouti opted to acquire nearly all the rolling stock they needed at once. Tanzania opted for a phased acquisition.

Critics of the Kenyan line, ignore the fact that the trains running on the line also cost money. They behave as if the facilities, rolling stock, and locos do not exist.




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