Some workers involved in the construction of the Standard Gauge Railway (SGR) project in Tabora, Itigi (Singida), Dodoma, and Ilala (Dar es Salaam) went on strike, on Saturday, January 6, 2024. They were demanding their December 2023 wages from the main contractor, Yapi Merkezi. Photo courtesy.
Concerns are mounting over Tanzania's Standard Gauge Railway (SGR) project, plagued by unfulfilled promises and stalled construction. PanAfricanvisions has uncovered that workers are being removed from various camps as the government allegedly fails to pay contractors. This financial debacle threatens to derail one of the country's most ambitious infrastructure projects.
The chapter of genuine promises was opened with the implementation of the first segment of the SGR project from Dar es Salaam to Morogoro, which was supposed to be completed within 30 months but failed, leading to an extension of 18 months. Apart from that promise and many others, the fifth segment from Isaka to Mwanza, which was supposed to be completed by May 14 this year, has also exceeded the contract period. There are only four days left until the end of this month, but its implementation has not even reached 80%.
Doubts about the completion of the Isaka-Mwanza segment were even raised by the Parliamentary Standing Committee on Infrastructure. In its report to the Parliament in Dodoma on April 6, 2024, the Chairman of the committee, Selemani Kakoso, expressed skepticism about whether this segment of the SGR project would be completed on time. The basis of his doubt was the approaching deadline of May 14, 2024, with the progress standing at 54.01%.
In the committee's report on that day, during which the Parliament discussed and approved the budget estimates for the Ministry of Transport for the year 2024/25, it was revealed that the government had already paid the contractor TZS 1.343 trillion, equivalent to 40.53% of the project's cost.
"The committee is concerned about the remaining time to complete the project by May 2024, compared to the remaining construction percentage. The government informed the committee that they are hopeful the contractor will complete the construction because the remaining work is not much compared to what has already been done," he said. However, the set completion date for the project has already passed, and Pan African Visions has found that the work is not finished.
According to Kakoso, the committee's report identified complaints from citizens due to unpaid compensation after their land was taken for the project. He recommended the government facilitate the payment of these citizens according to the law. Delays in this project and other SGR projects are associated with financial challenges, which the government reportedly cannot pay the contractor, CCECC, from the People's Republic of China, to complete the work.
This is confirmed by some workers in various camps of the project, who complain about being removed from work because the contractor claimed the government had no money to continue the project. One worker on the Isaka-Mwanza segment (whose name is withheld) said that their camp initially had more than 400 workers, but now only 50 remain. In the Luvumbo camp, the worker said the reduction of workers began on April 20, 2024, with more than 100 people being let go. According to the worker, the downsizing continued until it reached him, and now only 50 workers remain in the camp.
"We were laid off on Friday (May 24), and only about 50 workers remain. Even vehicles have started to be removed, indicating that the project has stalled," he explained. The reason for their layoff, he explained, was that they were informed by the human resources department that there were financial challenges preventing payment. "HR (human resources officer) told us that the government has no money to pay the contractor to continue the work, so we were asked to go home for a month, and they promised to call us back," he said.
Regarding contract termination payments, he explained that those with probationary contracts of three months were promised four extra days of pay. But for those who had worked for more than six months, he said they were paid annual leave money calculated at TZS 16,600 per day. He explained that this situation is a blow to him as it happened suddenly. Although some are still in the camp, he decided to leave due to a lack of funds to sustain himself.
In search of the truth, PanAfricanvisions contacted the Human Resources Manager of Yepi Merkez, who refused to give their name and directed inquiries to the spokesperson, as it was not within their authority to speak for the company. "I can't speak about that; contact the communication officer or the project manager," he said. Even when the spokesperson was contacted, their phone rang unanswered. However, the project manager was reached and claimed to have already left before the letter was distributed to other workers.
Others affected by this issue are those working on the segment from Makutopora to Tabora, which is 368 kilometers long. According to one worker, they were informed that there would be no work in that area until they were called, and since September last year, more than 1,000 people have been let go. This segment of the SGR is being implemented by the contractor Yapi Merkezi. The worker claims that the reason for their layoff is the government's lack of funds to pay the contractor.
A notice from Yapi Merkezi issued on May 23, 2024, directed all workers, saying: "From May 23, 2024, there will be no work until you are notified by the human resources department and the respective department heads to return to work. Please make sure your phone is available at all times." The worker emphasized that the contractor informed them that they have no money because their employer (the government) had run out of funds. "Yapi Merkezi told us they have no money, the government has run out of funds to continue the project, the situation is not good, many projects are stalling, so many people have been sent home. I have been suspended since February," he said.
Another worker on the project said he saw the notice at a time when he had already been let go since February 2024. "We urge the government to pay Yapi Merkezi, we have no jobs to do. I am just at home; I have been told I will be called, but I don't know what will happen; it could be the end of our jobs," he said. This segment from Makutupora to Tabora costs TZS 4.606 trillion, with completion expected within 42 months starting from April 2022.
Despite this reality, in his speech on May 6, 2024, the Minister of Transport, Professor Makame Mbarawa, said the government continues with the construction of the project in both phases, totaling a network of 2,809 kilometers. Alongside these phases, the minister said the government would continue building the railway in other areas of the Southern and Northern Corridors as financial resources become available. In his remarks, Professor Mbarawa said efforts to secure funding from stakeholders, including investors through public-private partnerships (PPP), are ongoing.
This collaboration, according to Mbarawa, aims to complete the railway construction in the remaining areas, including from Kaliua – Mpanda – Karema (321 kilometers), Isaka – Rusumo – Rwanda (371 kilometers), Mtwara – Mbambabay and branches of Liganga and Mchuchuma (1,000 kilometers). Other segments include Tanga – Arusha – Musoma (1,028 kilometers), Dar es Salaam City Railway (166 kilometers), and Dodoma City Railway (107 kilometers). He explained that the significant financial requirements for implementing transport projects demand substantial funds (capital intensive). For example, the SGR project will cost approximately TZS 23 trillion until its completion.
Apart from his remarks on May 6 this year, PanAfricanvisions has recently been seeking Professor Mbarawa to address all these claims, but his phone rang unanswered. Even when a short text message and WhatsApp message were sent, they showed as delivered but went unanswered. Alongside him, the Permanent Secretary of the ministry, Professor Godius Kahyarara, was also contacted, and he received the call, stating that he was in a meeting and would call back later. Until this report was finalized, the chief executive of the ministry had not contacted the reporter again, and even when contacted, his phone rang unanswered.
