Rwanda, Tanzania agree on electric SGR, opt for open tender

By The Eastafrican

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Rwanda and Tanzania are reviewing the designs for the Isaka-Kigali standard gauge railway (SGR) line to accommodate electricity-driven locomotives — the fastest in East Africa.

“We want to have reduced travel time for both cargo and passengers on this line between Dar es Salaam and Kigali. In order to accommodate the efficiency for the railway, we have asked for a review of the feasibility studies to accommodate the electric element,” said Rwanda’s Minister of State in charge of transport Jean de Dieu Uwihanganye.

Mr Uwihanganye spoke in Kigali last week where he met his Tanzanian counterpart of Works, Transport and Communications, Makame Mbarawa.

The Isaka-Kigali line was launched in January. By going electric, the two countries will give the Central Corridor a competitive edge over the Northern Corridor that runs through Kenya. Kenya’s SGR trains — launched in May last year and currently operate between Nairobi and Mombasa — run on diesel.

Rwanda and Tanzania are targeting passenger trains travelling at up to 160kph and cargo trains at up to 120kph. That compares with 120kph and 100kph for the Ethiopian electric rail, and 110kph and 80kph for the Kenya diesel line, respectively.

With the diesel option, the trains between Isaka and Kigali would have run at maximum speeds of 120kph for passengers and 80kph for cargo.

Kigali and Dar es Salaam intend to use open tenders for the design review in the hope of accommodating the most suitable financing option.

This would break ranks with the government-to-government sourcing that Kenya and Uganda did with China for their section of the SGR. Kenya is now extending the line from Nairobi to Naivasha, a distance of about 120 kilometres.

It is expected that the winning bidder for the Isaka-Kigali line will do works, equipment and logistics mobilisation from August with an expected groundbreaking two months thereafter.

“We shall strive to follow existing laws and regulations governing public tenders, and according to the regulations, this will take us at least three months,” said Mr Mbarawa.

Financing

However, the financing model could prove tricky given preferences by the two countries in the recent past.

In February last year, Tanzania opted for its own domestic sources to fund the $1.2 billion contract it awarded Turkish firm Yapi Merkezi and Portuguese firm Mota-Engil to build the 205km line that will run from Dar es Salaam to Morogoro.

This line is expected to be completed by October next year. And on Wednesday, President John Magufuli laid a foundation stone for the second phase of the 426km Morogoro-Dodoma railway line to be constructed by Yapi Merkezi. Tanzania said it has already released $486 million as an advance payment to the contractor.

“We have different financing models to choose from and I believe we will consider one that’s better for our people. At the moment, we can’t give a clear indication on what model we prefer as we haven’t gotten to that stage yet,” said Mr Mbarawe.

Dar port

Meanwhile, the Tanzania Ports Authority (TPA) has opened a liaison office in Kigali as Dar es Salaam plans to make Rwanda its biggest transit market.

Mr Uwihanganye said that 80 per cent of Rwanda’s external trade has utilised the Central Corridor over the past two years, anchored by the port of Dar es Salaam, which registers an eight-day dwell time. The opening of the new TPA office will cut this to four days, which will reduce the overall time and cost of cargo.

“We now don’t expect importers to travel to the Dar es Salaam port to clear their goods, but instead use the Kigali office,” he said.

At last week’s meeting between the Rwandan and Tanzania transport ministers and the implementing agencies, the feasibility study should be reviewed and a project implementation unit established by July. Bids for contractors will then be floated with a ground-breaking target of October.

From the previous design, the 1,320km SGR project is expected to cost the two countries $2.5 billion. Tanzania was expected to pay $1.3 billion while Rwanda was to raise $1.2 billion. However, the electric element incorporation is expected to increase these costs slightly.

The two countries are also pushing for a lower time frame in movement of goods to a maximum of 13 hours between Dar-es-Salaam and Kigali, and 10 hours for the passenger line.

In comparison, the Chinese-built 756 km $4 billion electrified rail line between Addis Ababa and Djibouti does a maximum of 13 hours for its cargo line.

The Kenyan passenger train takes five hours while the cargo one takes eight hours.

Kenya-Uganda SGR

In January, Tanzania in a tender notice indicated that it had set aside funds for the purchase of the electric engines and carriages to operate along the Central Corridor, making the country the second in the region after Ethiopia to use high-speed electric cargo and passenger trains.

The latest project between Dar es Salaam and Kigali enhances competition to the port of Mombasa, as Kenya and Uganda still grapple with their joint SGR project to Kampala.

Uganda is banking on Kenya to complete its last phase of the project between the lakeside city of Kisumu and the border town of Malaba in order to start the Malaba – Kampala stretch.

In January, Kampala said that it was considering revamping its metre gauge railway in the medium term as it turned out that Kenya’s failure to get finances for the Kisumu-Malaba leg could delay that of Uganda for at least three years.

“We still have issues to sort out in 2018. I cannot answer when we will get financial closure for Malaba-Kampala. We need to first agree with Kenya on how quickly they can get financial closure for Kisumu-Malaba,” said Secretary to the Treasury and Permanent Secretary in the Ministry of Finance Keith Muhakanizi.

It is understood that a meeting scheduled over the final funding proposal between the ministers of finance and transport from Uganda and Kenya with China Exim Bank officials, which was to be held in Beijing last October, failed to materialise.

Instead the executives from China Exim Bank flew in to Kampala and Nairobi in November to carry out due diligence on the Uganda project proposal and contract application. Kampala was challenged to meet some financial conditions which they said they would by end of March this year.