February 3, 2017 / 6:15 PM / 3 years ago

Tanzania signs $1.2 bln deal for new railway line

DAR ES SALAAM, Feb 3 (Reuters) - Tanzania signed a deal worth $1.215 billion with a consortium of Turkish and Portuguese companies on Friday to construct a 300-kilometre railway line, part of plans by the east African country to boost trade with its land-locked neighbours.

In total, Tanzania wants to build a 2,561 km standard gauge railway network connecting its main Indian Ocean port of Dar es Salaam to eastern and southern Africa’s hinterland.

The port’s vast hinterland loops in eastern Democratic Republic of the Congo, Zambia, Rwanda, Burundi and Uganda.

In a statement, state-run railway firm, Reli Assets Holding Company Ltd (RAHCO), said it had signed an agreement with a joint venture of Turkish firm Yapi Merkezi and Portugal’s Mota-Engil Engenharia e Construção África, S.A.

The firm said construction of the railway line would start next month and take 30 months to be completed.

It did not give details on how the infrastructure project would be financed but last July Tanzania said it had secured a $7.6 billion loan from China’s Export-Import Bank (Exim) to build part of the new railway network.

Tanzanian government officials said 40 foreign companies had initially expressed interest in the project, but only the Turkish-Portuguese consortium submitted a bid and was picked.

RAHCO said winners of bids for four other tenders for construction of additional standard gauge railway lines covering about 1,000 km would be announced in April.

Last month Tanzania also asked for a loan from state-owned Export Credit Bank of Turkey (Eximbank) to help finance a 400 km stretch of new railway.

President John Magufuli made the funding request to visiting Turkish President Tayyip Erdogan during talks in Dar es Salaam.

In recent years Turkey has sought to deepen trade ties with Africa and moved to expand influence on a continent where China and more traditional donors such as Britain, France and the European Union have a strong presence.

Tanzanian government sources said Chinese companies would probably be awarded tenders for construction of other sections of the railway line. (Editing by Elias Biryabarema; Editing by Gareth Jones)

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