Tanzania invites bids for Standard Gauge Railway line with Burundi

Tanzania has announced the invitation of bids for the construction of a 367-kilometer railway line extending the Standard Gauge Railway to Burundi. The project has been in the pipeline since January, with the signing of a memorandum of understanding between the two countries indicating initial cost estimates of $900 million. To gain insights into the progress made on this significant project, CNBC Africa reached out to Gabriel Mwangónda, Managing Director of Segax Group Limited. Mwangónda shared that the cost analysis for the project stands at $900 million USD, with both Tanzania and Burundi contributing to the funding, especially for the leg connecting Windsor to Gitega, the capital city of Burundi. While specific details regarding the funding split between the two countries remain undisclosed, both governments have set aside funds for this crucial infrastructure development. Speaking on the procurement of investors, Mwangónda highlighted that Tanzania Rail Corporation (TRC) has been appointed as the lead entity. TRC's experience in similar projects positions them well to oversee the tender process, with Burundi playing a supervisory role. The project will be designed and built, with a focus on construction rather than securing financing. Mwangónda emphasized the strategic decision to entrust TRC with the procurement process due to their proven track record in similar projects. He further noted that contractors for three ongoing routes are already in place, underscoring TRC’s proficiency in handling large-scale infrastructure projects. While an exact construction commencement date remains pending, Mwangónda indicated that the tender deadline is set for November 15th, with construction anticipated to commence either late this year or early next year. The availability of funds from both governments signals a swift launch of the project to expedite progress. The railway line extension aims not only to benefit Burundi but also the surrounding regions. Currently, Burundi predominantly transports its international cargo through the Dar es Salaam port, incurring high transportation costs. Mwangónda highlighted that by utilizing the railway line, transportation costs are expected to significantly decrease, enhancing regional trade efficiency and lowering the cost of goods. The project's economic impact anticipates reduced production costs and lowered commodity prices, fostering economic growth. With streamlined cargo movement and reduced delays due to checks and bureaucratic hurdles, the railway line is poised to enhance the business landscape within the region. Additionally, the project aligns with the strategic objectives of the East African Community, aiming to promote economic development and regional integration. The railway line extension is crucial in facilitating trade within the region and fostering economic growth, ultimately benefiting both Tanzania and Burundi.