Talks on China-linked Sh7tr cement, electricity project enter crucial stage

Dar es Salaam. Talks between the government and China’s Sinoma and Hengya Cement (T) Ltd on the proposed $3 billion (about Sh6.7 trillion) investment in the production of cement and electricity in Tanga Region have entered a crucial stage.

Officials from the two sides were yesterday engaged in lengthy negotiations in Dares Salaam on the right incentives to be offered to the investor.

Industry, Trade and Investment minister Charles Mwijage said on Wednesday that the government was willing to offer the right incentives with a view to ensuring that the project took off as soon as possible.

“Our goal is to see the project’s kicking off by the year 2020. In so doing, it will add impetus to the goal of industrialising Tanzania as envisioned in the country’s Development Vision 2025,” Mr Mwijage told journalists at TIC offices yesterday where the discussions were held. The project will be located in Mkinga District, Tanga Region, where payment of compensation to people who will be relocated has already started, with at least Sh500 million having already been released. Once completed, the factory will be the biggest in of East Africa.

The project involves the construction of a cement plant with the capacity to produce at least seven million tonnes of cement annually and construction of a power plant with the capacity to generate at least 1, 200 megawatts.

But Mr Mwijage said yesterday that ongoing negotiations involved exploring the possibility of implementing the entire project in one phase.

According to Mr Mwijage, Sinoma and Hengya Cement (T) Ltd would export up to 60 per cent of its cement, specifically targeting Somalia, Kenya, Mozambique, Sudan the Democratic Republic of Congo and Uganda markets.

It is estimated that the project will offer direct and indirect employment to between 4,000 and 8,000 people.

The government, Mr Mwijage said, would collect a total of Sh400 billion amnually in revenue from the project.

The head of delegation from Sinoma and Hengya Cement (T) Ltd, Mr Xie Zhengyi, said once the project was completed, it would attract other investors from China to come and invest in Tanzania.

He noted, however, that delay in issuance of permits and other important documents by the government was a key challenge facing the firm, and urged the relevant authorities to cooperate with the company.

But Mr Mwijage said the government would do everything within its means to ensure that the project was implemented successfully.

“I can assure you that the government will provide you with the requisite incentives within 30 days from today, so that you can start implementing the project,” he said.