By Omar Sami
Transportation infrastructure is a significant catalyst for economic development in any nation. With this understanding, the Government of Tanzania has strived to develop the nation’s transportation infrastructure to fast track development initiatives as well as to cope with the development targets set in the national development frameworks, such as the National Development Vision 2025, the Tanzania Assistance Strategy, and the National Strategy for Growth and Reduction of Poverty.
According to the National Development Vision, Tanzania is anticipating to become a middle-income country by 2025, which definitely needs support by robust transportation networks. The current profile of transport network in Tanzania includes roads, air, railways, pipelines, and water.
The railway network consists of 3,681km of which 2,706 km is managed by Tanzania Railway Corporation (TRC), and 975 km by Tanzania-Zambia Railway (TAZARA) (MoW, 2017). The Ministry of Work, Transport and Communication reported that in 2018 the transport sector contributed 4.3 percent of the Gross Domestic Product (GDP)
According to the National Bureau of Statistics (NBS), in 2018 the economy of Tanzania continued to register high growth levels with real GDP growth rate of 7.0% compared to 6.8% in 2017 (rebased from 7.1%). This growth was and is attributed by increased investment especially in infrastructure, a stable supply of electricity, improvement in transport services and favorable weather conditions that resulted in an increased harvest of food and other crops.
TRC’s Situational Analysis
The business environment of TRC is improving compared to where it was past four or five years. The Board is doing its best to direct the management in improving the business situation by ensuring critical business issues are addressed, proper use of computer systems in handling operations and mitigating business and operational risks.
TRC has loyal customers who believe and trust in rail transportation. Rail reduces transportation cost which forms a potential part of operational cost or pricing of goods once they reach their points of destination.
The government’s effort through his Excellence Dr. John Joseph Pombe Magufuli has invested substantial amount of money in wagons and locomotives rehabilitation program. Further to that, the Governments initiative of improving and extending the Dar es Salaam and Tanga port has and will increase regional and inland business, improve the forward and backward linkage between Tanzania Ports Authority (TPA) and Tanzania Railways Corporation (TRC).
Through World Bank support the Government of the United Republic of Tanzania has been able to implement the Tanzania Intermodal Rail Project (TIRP) which continues to accomplish the 970 km of rail track from Dar es Salaam to Isaka dry port.
The Contestability of Rail Markets
Rail transport is one of the most important commonly used and very cost-effective mode of commuting goods carriage over long, as well as, short distances. Railways fulfil multiple societal and economic objectives, including the provision of connectivity between key economic centers, regions and countries, and offer a relatively fast and reliable alternative to road and air modes. The railway sector in Tanzania is operating in a monopolistic market structure due to heavy infrastructural investment which includes tracks, signaling systems, stations, yards, good sheds and depots used by rail operator.
These investments are committed by the Government since the private sector may have some limitation although may be able to operate rail business by buying locomotives, wagons, manage good shed and other amenities.
Rail Infrastructure Network
Rail infrastructure networks are characterized by the presence of high infrastructure costs, economies of scale and economies of density in production. Economies of scale arise when a single firm can meet market demand more efficiently than any combination of two or more firms. Economies of density arise when large volumes of goods need to be transported between locations; the higher the loading density, the more efficient is rail transport compared to other modes.
That is why it is economical to haul goods to say Kigoma, mwanza, Isaka or any long-distance location by train than road.Railway transport have proved to be the best option when carrying bulk goods (dry or liquid) as it provides greater capacity, regularity and higher energy efficiency compared with other transportation modes.
Also, in the process of increasing economies of scale railway transport technically transport large number of wagons in form of block train.Contribution of Standard Gauge Railway (SGR) In Tanzania’s Industrial DevelopmentA standard gauge railway is a railway with track gauge of 1,435mm,known as Stephenson gauge after George Stephenson. It is the mostly used rail way track gauge across the world with approximately 55 percent of lines in the world using it. All high – speed rail lines use standard gauge except those in Russia, Finland, Portugal and Uzbekistan.
At the moment the Government of United Republic of Tanzania is implementing the first phase of SGR from Dar es Salaam to Mwanza (1219Km) which is divided into a number of lots. The first lot from Dar es Salaam to Morogoro is completed by 70.5 percent. The second lot from Morogoro to Makutupora is completed by 22 percent.
The Government of URT under the leadership of his excellence Dr. John Pombe Joseph Magufuli plans to construct a total of 4,190 Kms of new SGR which entails :-
1. Mtwara Mbambabay:- 1000 Kms, 750 kms main line to link Mtwara port and Lake Nyasa through Ruvuma and spurs 250 kms to Liganga iron ore and Mchuchuma coal mining.
2. Tanga Port – Arusha – Musoma:- 1000 Kms to connect Tanga port, Kilimanjaro, Arusha, Singida, Simiyu, Musoma, Spurs to Minjingu, Engaruka Mineral and Dutwa Nickel mine in Bariadi.
3. Tabora – Kigoma:- 411 Kms linking Kigoma to Tabora
4. Uvinza – Msongati:- 240 Kms where by 156 Kms in Tanzania and 84Kms in Burundi.
5. Isaka – Rusumo – Kigali:- 371 Kms to connect Kigali with central line with target of goods/cargo from Eastern Congo.
The SGR line will have a capacity of hauling a minimum of 17 Million metric tons. Passengers train will run at a speed of 160Kph whereas freight train will run at a speed of 120Kph. The electrical train is equipped with ERTMS level 2 and GSM – R signaling system.
SGR project benefits:
• A total of 640 contracts for supplying and sub contract have been issued a vivid example on the use of local content policy.
• The project uses locally registered companies for supply of some materials like Rebar, Cement, Fuel and Concrete. Some of these companies are Kamal Steel Ltd, Nyati Enter-prices, Puma Energy Tanzania Ltd and Gulf Concrete Ltd to mention a few.
• The project contractors provide sub contracts of small scale and medium scale contracts to local engineers. Some of sub contracted works are Civil works, Infrastructural works, architectural, track, catenary, steel, mechanical, cladding, formwork and scaffolding, etc.
• The project has created more than 14,000 direct employment.
• Cement supplies is 100 percent sourced locally and the project is estimated to use 9.3Million bags of cement .his demand will literary creates spiral effect in economic development.
• Due to the need of BS 500 steel Bars the SGR project has shown a market niche of which without this project none of the steel industries would invest in BS 500 steel. The project estimates to use 115 Million Kg of BS 500 which will be sourced locally.
• A concrete sleepers production factory in Soga and Kilosa has opened doors for new technology transfer. Now we have Tanzanian Engineers, and technicians who can produce sleepers. This has an advantage when the Government signs new SGR contracts in form of Lots these two factories will be used to produce sleepers and supply to contractors.
SGR Project benefits during Operations
• The project will contribute greatly on the social economic by reducing travel time from say 3 hours to 75 Minutes for Dar es Salaam to Morogoro and from 7 hours to 3 hours from Dodoma to Dar es Salaam.
• The project will help in normal economic distribution as industries will be dispersed than been skewed on one or some parts of the country. Project will easy logistics and create new industrial zone in other regions like Singida, Tabora, Shinyanga, and Dodoma Instead on relying on Dar es Salaam, Arusha, Mbeya and Mwanza alone.
In implementing the Industrialization policy, infrastructure is the key in integrating the compounds of economy, the Government of Tanzania is pushing forward the effort of industrializing the country by investing huge capital in transport and energy sector so that they can facilitate production activities in Agriculture and Industrial sector finally booting the country’s economy.
The main role of TRC in the country’s economy is to develop, promote and manage the rail infrastructure assets for providing efficient and reliable rail transport services in Africa by managing rail transport in cost effective manner through development, and maintenance of railways system by providing safe services to local and International customers for sustainable socio-economic development’’.