MPs call for clarification on SGR funds

The government’s decision to allocate Sh900 billion from domestic revenue for the construction of the standard gauge railway (SGR) in the 2017/18 fiscal year has prompted the Opposition to demand an explanation over the fate of loan agreements that the country entered with foreign banks.

Tabling his docket’s 2017/18 budget proposals yesterday, the Minister for Works, Transport and Communication, Prof Makame Mbarawa, said the government has allocated Sh900 billion for the SGR project.

According to the Prof Mbarawa, all the funds will come from the government and there is no single cent that will come from foreign donors. “To continue with the SGR construction project from Dar es Salaam to Dodoma, a sum of Sh900 billion has been allocated for the next financial year,” he said.

In the 2016/17 financial year the government allocated Sh1 trillion to fund the first phase of the project starting from Dar es Salaam to Morogoro (300km) the total cost of which is put at Sh2.5 trillion.

However, the opposition camp charged that the government was sending mixed signals over the funding of the SGR for the central railways line and wanted the government to clarify.

Opposition Spokesperson David Silinde (Momba-Chadema) noted that officials in the former President Jakaya Kikwete’s administration had said that SGR would be constructed with financial assistance from China.

And in fact, President Magufuli went ahead and entered into a long-term loan agreement with the Exim Bank of China worth Sh17.5 trillion.

“President (John) Magufuli has said in the past that the Sh2.5 trillion for the Dar es Salaam-Morogoro phase would be locally funded. But he has also been quoted saying that there would be financial assistance from Turkey. We would like to know who is paying what for that phase one,” he said adding, “We would also like to know what happened to the Exim Bank deal, and what happened to the Chinese companies who had shown interest in the first place.”

The Opposition also raised concern on how the project is currently financed, saying it will take too long, rendering it economically non-viable.

“The Minister of Finance, Dr Philip Mpango, told this august House last year that for the project to become viable, then its sections should be built simultaneously. We share the same view, and we would like to see how the government is poised to execute that,” said Mr Silinde.

Earlier, Prof Mbarawa tabled a Sh4.5 trillion budget out of which Sh2.5 trillion will go to the Transport sector, Sh1.9 trillion to Works and Sh18 billion to Communications.

In the Transport sector, Sh2.4 trillion is allocated for development projects. The government is going to inject Sh2.2 trillion for various projects the largest being the SGR. Prof Mbarawa also said the government has allocated Sh500 billion for buying new planes for Air Tanzania Company Ltd (see story on page 10).

The government will also embark on two new feasibility studies for SGR line for Mtwara-Mbambabay (Sh2 billion) and Arusha-Musoma (Sh1 billion).

Donors will contribute Sh250 billion, out of which Sh200 billion by World Bank to rehabilitate the existing meter gauge central railway line.

In the construction sector, Sh1.8 trillion has been allocated for development projects. Sh1.3 trillion will come from local sources while donors will inject Sh545 billion.

Some of the major projects earmarked in this sector are, Sh917 billion for the roads fund, construction of Msalato Airport in Dodoma (Sh5.5 billion), rehabilitation of Kilimanjaro International Airport (Sh32 billion), rehabilitation of Mtwara Airport (Sh4.5 billion) and construction of Terminal III Building of the Julius Nyerere International Airport (Sh35 billion).

In the communications sector, Sh14 billion has been earmarked for development projects, all coming from the local sources.

“In the next fiscal year, we have tried to allocate more local funds for the development projects. It is upon us to propel the development wheel on our very own blood and sweat,” said Prof Mbarawa.

Compared to the fiscal year 2016/17 budget, the proposed 2017/18 estimates for the ministry has raised by Sh326 billion.

President Magufuli flagged off the first phase of the SGR project on April 12 this year. He urged the contractor to finish the project within 30 months. The project is being undertaken by contractors from Turkey and Portugal.

Yesterday, Prof Mbarawa said the tenders for construction of Morogoro-Makutupora section (336km), Makutupora-Tabora (294km),Tabora-Isaka (133km) and Isaka-Mwanza(249km) were advertised in November 2016, and opened Wednesday last Week (April,2017).

The SGR which is to use electricity full-time is designed for a maximum speed of 160km/h for passenger trains and 120km/h for freight.

It links the Dar es Salaam Port with DR Congo and the land-locked countries of Uganda, Rwanda, Burundi, Zambia and Malawi.