RLL Container Report - 22 February 2017
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 22 February 2017
Lines looking for salvation in East Africa.
This year, according to Drewry Maritime Research, the capacity of the global container fleet could increase by 1.7 million teu. To compound matters, most of these new entrants will boast a carrying capacity in excess of 14,000 teu, which means that they will be deployed on services out of the Far East to Europe. To top it all, there are five almost-new 13,100-teu box carriers belonging to Hyundai in Hong Kong awaiting to be sold. The vessels that the new entrants replace will, in turn, cascade down into the routes serving Asia and the Pacific ports in the North, Central and Southern Pacific. However, demand on the routes out of Asia to the East Coast of S. America experienced a sharp fall-off in carryings. The lines will, therefore, be praying for a pick-up in box use on the north-south trades. East Africa would appear to be the lines’ best hope for an upsurge in box demand. Both Ethiopia and Kenya now have standard gauge lines running from the coast to their respective capitals.
It will be recalled that last year, China’s Eximbank had agreed to provide up to USD $7.6bn to support Tanzania’s US$9bn railway construction programme, which was to be undertaken by Chinese firms under accords signed in 2015. However, these agreements were subsequently cancelled by incoming President John Magufuli, who after taking office in November of last year, immediately set about negotiating a new deal with President Erdogan of Turkey. And so, on the 3rd of February, the Tanzanian government exchanged contracts with a consortium consisting of Yapi Merkezi from Turkey and Mota Engil from Portugal for the construction of a new standard-gauge line between Dar es Salaam and Morogoro.
The single-track line stretches 207 km and is designed for speeds of up to 160 km per hour. The contractors quoted a price of USD 1.2 Billion and have promised to start construction already in March of this year. The new line forms the first section of the 2,200 km trans-Tanzanian line stretching as far as Kigali in Rwanda, Musongati in Burundi and the port of Mwanza on the shores of Lake Victoria. Mwanza lies over 1,200 km west of the port of Dar es Salam. In spite of the short notice, the contractors appear confident they can bring the project in on time and on budget.
The new line to Morogoro will form the first stage of a planned 2,200 km standard gauge network linking the countries surrounding Lake Victoria. This link would supersede the existing metre-gauge Central Railway network and will be operated under concession by Tanzania Railways Ltd, with priority given to the 971 km line between Dar es Salaam and Isaka. According to some sources, the Turks and Portuguese have also been granted the right to construct the 400 km stretch of line in Eastern Tanzania that will link Isaka with the two land-locked states of Burundi and Rwanda. This line may come with a hefty price tag of USD 1 Billion but nevertheless the rail engineers are determined to construct this vital element of intermodal infrastructure in East Africa.
John Keir, Ross Learmont Ltd.
22 February 2017
Copyright ©, 2017, John Keir