Why SGR is both a challenge and opportunity for bus owners

Dar es Salaam. The imminent commencement of commercial operations on the standard gauge railway (SGR) is seen as both a challenge and an opportunity for bus operators.

Views collected by The Citizen show that bus owners are currently reviewing their operational plans to ensure that they remain relevant and possibly get a slice of the business that will come with the SGR.

“We don’t consider the SGR an existential threat. On the contrary, we think it will increase business for bus owners because buses will still pick up passengers at places where trains will end their journeys and take them to other destinations,” Tanzania Bus Owners Association (Taboa) secretary-general Priscus Joseph said told The Citizen on Wednesday.

He said bus owners were also considering procuring SGR passenger and cargo wagons to enhance competition and efficiency within the transport sector.

“We are currently in discussions with the government to see how the private sector can be accommodated in the whole SGR setup,” Mr Joseph added, noting that the talks centred on profit distribution and other relevant issues.

Last year, Transport minister Makame Mbarawa was quoted saying the government would review the Railway Act number 17 of 2017 to allow the private sector to start participating in rail transport services in the country.

Addressing participants during the Joint Transport Sector Review Meeting in Arusha, Prof Mbarawa said all Tanzanians interested in offering rail transport were invited to procure locomotives and wagons.

Tanzania is currently expanding its railway network through the $10.4 billion SGR flagship project to complement the old and inefficient metre gauge railway (MGR) system.

The SGR will stretch from Dar es Salaam to Mwanza, Kigoma and Mpanda on the shores of Lake Victoria and Tanganyika when complete.

It will comprise a 2,000-kilometre network that will be developed in various lots, namely  Dar es Salaam-Morogoro (300km); Morogoro-Makutupora (422km) and Makutupora-Tabora (294km).

Other lots are Tabora-Isaka (130km); Isaka-Mwanza (249km); Tabora-Kigoma (506km) and Kaliu-Mpanda (210km).

The SGR will then proceed to neighbouring Rwanda, Burundi, and the Democratic Republic of the Congo (DRC), according to initial plans.

The first and second phases are currently complete by 99 percent and 95 percent, respectively.

Tanzania Railways Corporation (TRC) last week conducted the first trial run on the Dar es Salaam-Morogoro section as part of the implementation of a directive issued last year by President Samia Suluhu Hassan.

The Head of State said, “I have been hearing about changes in the commencement dates for SGR services between Dar es Salaam and Dodoma. Tanzanians are fed up with lame excuses. They want to see the railway up and running as soon as possible. I therefore direct that SGR services between Dar es Salaam and Dodoma commence before the end of July 2024.”

Analysts say the positive impact of the project notwithstanding, the imminent start of SGR services calls for the need to ensure that operations are sustainable.

Those who spoke to The Citizen also emphasised the importance of consistency and private sector involvement to foster genuine competition and ultimately stimulate economic growth.

According to Mr Joseph, one SGR passenger wagon can carry up to 70 passengers, slightly more than the capacity of one bus.

Consequently, bus owners may consider investing in wagons to enhance services and promote healthy competition.

Ms Gaudensia Mushi, a frequent user of Dar es Salaam’s bus rapid transit (BRT) system, urged the government to learn from past transport initiatives and ensure consistency and efficiency in SGR operations.

Mr Baldwin Makundi, a co-director with the bus firm BM Coach, welcomed the commencement of SGR trial runs, saying competition in the market and  increased investment would offer travellers more choices.

Mr John Shirima, managing director of another bus firm known as Tilisho Safaris, voiced similar sentiments, highlighting the potential of SGR to stimulate competition and opportunities within the transport sector.

However, Dr Lutengano Mwinuka, an economic lecturer at the University of Dodoma, raised concerns about potential challenges related to competition, particularly considering the political affiliations of many bus owners.

He emphasised the importance of fair competition and private sector involvement to drive innovation and efficiency in the transport industry.

Tanzania Medium and Small Truck Owners Association (Tamstoa) chairman Chuki Shabani said recently that lorry operators should remain optimistic because the SGR cannot reach everywhere and handle all available cargo, whose volumes are expected to increase significantly in the coming years.

“We will continue to fulfil our responsibility of transporting cargo to final destinations, especially places the SGR network will not reach, including some very remote destinations,” he told The Citizen.

Opening the Tatoa annual general meeting last December, Prime Minister Kassim Majaliwa said the government’s efforts to improve railway infrastructure were not intended to kill the road transport sub-sector.