Tanzania on Tuesday signed a major contract with Turkish construction firm Yapı Merkezi to build a 368-kilometer (228.67-mile) section of a standard gauge railway linking the largest port city in the East African nation with the hinterland.
The deal, which is expected to cost $1.9 billion and will be funded by loans, is part of a 1,219-kilometer line that Tanzania is building to help boost trade with neighboring countries, including Rwanda, Burundi and Uganda. Yapı Merkezi is already building two other sections, which are near completion.
The section announced on Tuesday will link Makutopora with Tabora, two towns in the country’s central region, Masanja Kadogosa, the director-general of the Tanzania Railway Corporation (TRC), said in a televised ceremony.
The full line will connect Tanzania’s Indian Ocean port and commercial capital of Dar es Salaam with Mwanza, a port city on the shores of Lake Victoria, which straddles the borders of Tanzania, Uganda and Kenya.
Officiating the contract signing ceremony between TRC's Kadogosa and Yapı Merkezi Deputy Chair Erdem Arıoğlu on Tuesday, President Samia Suluhu Hassan said Tanzania would borrow to finance the project.
“We will find friendly loan facilities and the best ways to obtain loans. We won't get this money from levies or from domestic taxes,” she said, adding they were giving priority to the project because it connects Tanzania to its regional neighbors.
The project is part of the central corridor that will connect Uganda, Rwanda, the Democratic Republic of Congo and Tanzania and provide access to the Indian Ocean for all related.
Kadogosa said the stretch will unlock potential for trade.
According to Yapı Merkezi officials, the railway line will establish safe and reliable transportation between Dar es Salaam and other parts of the country.
After its completion, the railway is expected to bolster the overall economy of Tanzania, especially in the field of trade and tourism, officials said.
According to Prime Minister Kassim Majaliwa, the use of railways instead of road transport will serve to reduce costs, protect roads from destruction by heavy vehicles and conserve the environment.
The East African country is currently implementing mega infrastructure projects to support its industrialization plans, including a controversial 2,115 megawatt (MW) hydroelectric dam being built in a UNESCO world heritage site.
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