The Tanzanian Government together with its peers from Burundi and Rwanda, are finalizing the feasibility studies to construct a new railway that will connect Isaka, North Central region of Tanzania, with Kigali in Rwanda and Musongati in Burundi.
The new railway will be connected to the existing rail line going from the port city Dar es Salaam to Isaka, which is being upgraded to be adapted to the new one under current international standards.
The project’s costs has been estimated at around USD 7.6 billion for the construction of the new 2,561 km railway and upgrades so far on the existing rail line have been estimated at a cost of USD 330 million.
According to the Rwanda Transport Development Agency (RTDA), a public institution that oversees the transport sector in Rwanda and which is leading the project, the primary railway’s objective is to reduce transport costs and enhance economic development by connecting landlocked countries to Dar es Salaam port.
RTDA estimates that in ten years from now, the average volume of freight carried on the railway would be at 12.85 million tons and income of USD 553 million, while by the end of the project’s lifetime this number would be above 20 with an average income of USD 1,760 million.
On the other hand, operating costs are estimated to be at USD 228.7 million at the beginning of the project and to rise to USD 352.5 million by the end of the project’s lifetime.
The project also counts with the World Bank’s (WB) support which has assigned CPCS Transcom International Ltd. as the project’s adviser.
In addition, the WB is partially funding the upgrades of the Dar es Salaam-Isaka rail line with USD 200 million as part of the southern corridor of the bank’s East African Railway Master plan.
From the economic point of view, the project is expected to yield to an average return on investment of 12.0% varying from 8.0% to 19.3% depending on the gauge option to be installed in the new railway.
According to Tanzanian Transport Minister Samuel Sitta, the country seeks to boost its now position as a hotspot for oil firms due to the recent discoveries of natural gas offshores and seeks to be the main enter gateway for growing economies in the landlocked heart of Central Africa, ahead of Mombasa in Kenya.