Tanzania signs $2.2 billion rail deal with China

Tanzania on Tuesday signed a $2.2 billion deal with a Chinese company to build the final stretch of a railway line that will link the country’s main port with its neighbors.

The 2,561-kilometer (1,600-mile) line will connect the port of Dar es Salaam in the Indian Ocean to Mwanza on Lake Victoria, with eventual branches to Burundi, the Democratic Republic of the Congo (DRC), Rwanda and Uganda.

President Samia Suluhu Hassan, who witnessed the signing, said construction of the final section of the Standard Gauge Railway (SGR) from Tabora to Kigoma in western Tanzania will be completed in 2026, nine years after construction began.

“Once the SGR is completed, Tanzania will be better able to leverage its strategic geographic positioning to facilitate cross-border trade,” she said.

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Hassan said Tanzania’s investment in the SGR has now reached $10.04 billion, including the latest contract.

“We have to borrow for this important infrastructure and other sustainable development projects because we don’t have enough local resources,” she said, dismissing criticism that the country is running too much debt.

She said the new railway would reduce freight transportation costs between the port of Dar es Salaam and the DRC from at least $6,000 per tonne to about $4,000 once fully operational.

At the same time, the transport time would drop from 30 days by truck to 30 hours in 2027.

China is the largest investor in Africa, pumping trillions of dollars into railroads, ports and airports in exchange for securing supplies of oil and commodities like copper and cobalt.

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These infrastructure projects are being built by huge loans made by China, but Beijing has been criticized for lending too much to poor countries without adequately checking their ability to repay.

Tanzania’s rail system has two existing networks, one connecting the East African nation to Zambia and the other to Kenya and Uganda.

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