Photographer: Riccardo Gangale/Bloomberg

Tanzania Said to Pick Mota, Yapi to Build $1.1 Billion Rail

  • Track to help link Dar es Salaam port with Rwanda and Burundi
  • Contract follows visit by Turkish president to Tanzania

Tanzania chose Turkish construction company Yapi Merkezi Insaat VE Sanayi As and Portuguese building firm Mota-Engil SGPS SA to build a railway at a cost of more than 1 billion euros ($1.1 billion) to connect the East African country with landlocked neighbors, people familiar with the matter said.

The contract is to build about 400 kilometers (249 miles) of track that will link Tanzania with Burundi and Rwanda. Mota-Engil and Yapi Merkezi hold a 50 percent stake each in the winning group, the two people said, asking not to be identified because the details are private.

Shares in Mota-Engil rose as much as 3.7 percent, the most since Jan. 11, and traded 2.9 percent higher at 1.61 euros by 8:43 a.m. in Lisbon. Mota-Engil is Portugal’s biggest construction company and depends on Africa for almost a third of its revenue, according to the company’s website.

Officials at Yapi Merkezi didn’t immediately respond to an e-mail requesting comment.

Yapi Merkezi has asked the Turkish government to provide guarantees for financing the project, one person said, without providing details. Turkish President Recep Tayyip Erdogan made a two-day visit to Tanzania last month to strengthen ties between the two nations.

Tanzania plans a 2,200-kilometer project known as the Central Railway Line from Dar es Salaam to the Rwandan capital Kigali, with two other lines branching off to Musongati in Burundi and to Mwanza port on the shores of Lake Victoria to service Ugandan shippers. It estimates that project will cost 16.7 trillion shillings ($7.5 billion). It also intends to build another line in the south linking the port town of Mtwara to coal projects in Liganga and Mchuchuma for about 16.1 trillion shillings.

    Before it's here, it's on the Bloomberg Terminal.