Photographer: Mario Proenca/Bloomberg

Mota, Yapi Will Bid for More Tanzania Projects After Rail Deal

  • Companies awarded $1.2 billion rail-construction contract
  • Turkish president’s visit to Tanzania facilitated deal

Portuguese construction company Mota-Engil SGPS SA and Turkish builder Yapi Merkezi Insaat VE Sanayi As will bid for more railway projects in Tanzania after winning a $1.2 billion contract in the East African country.

Tanzania’s government plans to issue a tender for another railway project in April after signing a deal with the two companies to build 300 kilometers (127 miles) of track, Works Minister Makame Mbarawa said Friday at a signing ceremony in the commercial capital, Dar es Salaam.

“We are very interested and it’s something that we will start discussing with the government,” Manuel Antonio Mota, chief executive officer of Mota’s Africa unit, said in an interview. “There are tenders under way for that.”

Tanzania is considering railway projects including a 2,200-kilometer Central Railway Line from Dar es Salaam to Kigali, the capital of neighboring Rwanda, 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. The government also plans 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.

Single Bidder

The government has budgeted 1 trillion shillings ($447 million) in the fiscal year through June to help fund the railways and will raise loans for the remaining financing, Mbarawa told reporters at the signing ceremony. Mota and Yapi, which submitted a joint proposal for the contract, was awarded the deal because it was the only bid received, he said.

“Forty companies put in a request for tender documents but only one company returned the documents,” Mbarawa said. Yapi and Mota own 50 percent each of the group that was awarded the contract.

The deal was facilitated by Turkish President Recep Tayyip Erdogan’s two-day visit to Tanzania last month to strengthen trade ties between the two nations, Yapi Vice Chairman Erdem Arioglu said in an interview.

Yapi is “very interested” in tendering for other rail projects in the country, Arioglu said.

Work on the projects is expected to start in the next six weeks and take about 30 months to complete, Mbarawa said.