Dar es Salaam - Chalinze - Morogoro Road Capacity Upgrade

The project comprises a new 197km long expressway toll road between Dar es Salaam and Morogoro, which is part of a much larger Central Corridor project between Dar es Salaam (Tanzania), Kigali (Rwanda), Bujumbura (Burundi) and Kampala (Uganda).

DESCRIPTION

Rehabilitation and upgrading of the 197 km of road which would be the first toll road in Tanzania (First 100 km 6 lanes and then 4 lanes). The project requires the construction of a new road, adjacent to the existing road, that will give drivers the choice between paying for a superior toll road, constructed to expressway standards, or making use of the existing road. The project comprises four and six lane carriageways, 8 interchanges, 7 toll plazas and weigh bridges as well as a number of bridges.

Tanzania’s Roads Act 2007 recognises the Dar es Salaam – Chalinze – Morogoro road section as part of the main TANZAM Highway and Central Corridor T-1 route which connects Dar es Salaam and its port with land locked neighbouring countries.

OBJECTIVES AND RATIONALE

PROJECT RISKS

Operational/ Traffic Revenue Risk: The impact associated with the road not attracting the forecast volume of users, resulting in lower than anticipated revenvues.

Socio-economic Risk: Loss of businesses, disruption of infrastructure and public service due to impact on impact generating activities. Subsequent impact due to encroachment of local people on project operations.

Regulatory Risk: Factors relating to legal and contract management as well as the need for standardised contracts, effective monitoring, etc. Delayed consent/ approval of licensing/ permitting.

Construction Risk: Risk related to inadequate/ ineffective project management and non-enforcement of EPC contracts.

PROJECT ECONOMICS

• NET PRESENT VALUE: 141.64

• COST BENEFIT RATIO: 1.19

• FINANCIAL INTERNAL RATE OF RETURN (FIRR): 0.00

• ECONOMIC INTERNAL RATE OF RETURN (EIRR): 0.14

• COMMENTS ON ECONOMICS:

PROJECT FINANCING

African Development Bank

OPERATION AND MAINTENANCE

OVERALL COST: 0.00

ANNUAL COST: 0.00

COMMENTS ON FINANCE:

The proposed structure assumes that Tanzania Investment Bank (TIB) will be mandated to act as lead arranger to raise the required debt for the Project. It is envisaged that the SPV will enter into loan agreements with lenders backed by a sovereign guarantee from the the government.

STUDIES

PROJECT STAKEHOLDERS

Regional Coordinator

East African Community

Lead National Agency

Tanzania National Roads Agency

Regional Coordinator

Central Corridor Transit Transport Facilitation Agency

Development Partner

Development Bank of Southern Africa

Preparation Funder

African Development Bank

Regional Coordinator

African Union Development Agency

CONTACTS

Infrastructure Expert David Niyonsenga-DavidN@nepad.org

Engineer, Planning Department Eng. Arnold Zephania Masaki-arnoldmsk8@gmail.com

CONTRIBUTION TO 2030 AGENDA