Chinese companies win $1.32bn Tanzanian rail contract

8 January 2021 (Last Updated January 8th, 2021 16:23)

The Tanzanian Government has awarded a $1.32bn contract to two Chinese companies for the construction of a 341km rail line.

Chinese companies win $1.32bn Tanzanian rail contract
Foreign Affairs Minister Palamagamba Kabudi stated that the construction work will be financed by the Tanzanian Government. Credit: Cory Woodward on Unsplash.

The Tanzanian Government has awarded a $1.32bn contract to two Chinese companies for the construction of a 341km rail line.

The firms that will build the new line are China Civil Engineering Construction and China Railway Construction, reported media sources.

The link will connect the Lake Victoria port city of Mwanza to Isaka, Tanzania.

Foreign Affairs Minister Palamagamba Kabudi stated that the construction work will be financed by the Tanzanian Government.

Kabudi has signed the agreement with his Chinese counterpart, Wang Yi, who is on a two-day visit to the country.

However, the scheduled time for the commencement of the work has not been revealed.

The Mwanza-Isaka line will be part of a 2,561km standard gauge railway network, which connects the country’s main Indian Ocean port of Dar es Salaam to landlocked neighbours in the region.

In 2016, the government said a $7.6bn loan was agreed with China’s Export-Import Bank (Exim) for the railway line.

Details on whether the funds were disbursed or not remain unknown.

Earlier, Tanzania granted two tenders in 2017 and 2019 to Turkish construction company Yapi Merkezi Insaat VE Sanayi.

The separate tenders were for the construction of a high-speed railway exceeding 700km from Dar es Salaam to Makutupor.

Last February, the Tanzania Ministry of Finance signed a term loan financing facility agreement with Standard Chartered Tanzania.

The $1.46bn loan facility is to support the standard gauge railway project from Dar es Salaam to Makutupor.