Govt to sign 6.5 trillion/- Stiegler’s Gorge deal today

12Dec 2018
By Financial Times Reporter
Financial Times
Govt to sign 6.5 trillion/- Stiegler’s Gorge deal today
  • HISTORIC MOMENT - Egypt's Prime Minister Mostafa Madbouly flies to Tanzania to witness the signing of a contract for construction of the mega hydropower dam, which has been awarded to Egyptian construction firm Arab Contractors

THE government is today scheduled to sign a landmark deal with an Egyptian company for construction of the long-delayed 2,100-megawatt Stiegler’s Gorge hydropower plant.

President John Magufuli revealed on Monday that the project was expected to cost a staggering 6.5 trillion/-.

But reports from Egypt say the actual cost of the project could be as high as $3.6 billion (over 8 trillion/-).

“I think in the next two days, we will sign a major contract for Stiegler’s Gorge, which will cost more than 6.5 trillion/-,” Magufuli made the announcement in Dar es Salaam on Monday at a meeting with senior officials of the Tanzania Revenue Authority (TRA), central bank and regional commissioners.

“This is all possible because of the efforts being made to improve government revenue collection.”

Magufuli noted that flagship infrastructure projects such as the planned construction of the Stiegler’s Gorge project, standard gauge railway (SGR), roads and purchase of new planes and passenger ferries were all thanks to taxpayers’ money.

“When the fifth-phase government came into office, monthly revenue collection by the government averaged 850 billion/-. We have now been able to increase monthly revenue collection to an average of 1.3 trillion/-.”

Although the Tanzanian government is yet to make any official announcement, the Egyptian government revealed in October that an Egyptian construction company, Arab Contractors, has won the tender to build Stiegler’s Gorge.

President John Magufuli telephoned his Egyptian counterpart, President Abdel Fattah Al-Sisi, in October to formally inform him about Tanzania’s decision to award the tender for the mega project to the Cairo-based construction company, according to the Egyptian presidential office.

Last week, Magufuli apparently telephoned President Sisi again to brief him about the project.

“Sisi asserted that Egypt will send a high-profile delegation led by the Prime Minister (Mostafa Madbouly) to be held to sign the contract of constructing the Stiegler's Gorge dam on December 12,” Egyptian presidential spokesman Bassam Radi said in a statement earlier this week.

A colonial-era project

The Egyptian PM will represent Sisi to witness the signing of the mega power deal in Tanzania.

The project has attracted intense scrutiny with conservationists both at home and abroad calling for a comprehensive Strategic Environmental Assessment (SEA) before it is implemented in the Selous Game Reserve, which is a world heritage site.

“The impact on Tanzania’s largest river (River Rufiji) would affect many ecosystem services it provides. It would affect tourism in Selous downstream in some of the most abundant wildlife areas in the game reserve,” conservation group WWF said in a report last year.

“These impacts could also negatively affect a further 200,000 peoples’ livelihoods, such as farmers and fishermen, as far away as the Rufiji delta and the islands beyond.”

President Magufuli has dismissed the concerns, saying only a tiny fraction of the Selous would be used to build the proposed hydropower dam.

Magufuli has made it abundantly clear that his government sees the project as a game changer in its industrialisation drive by promising to provide cheap and abundant electricity to the energy-starved nation.

The idea of building the proposed power dam, which is now officially known as the Rufiji Hydropower Project, was conceived in the colonial era in the early 1900’s and was later taken up by the founder president, Mwalimu Julius Kambarage Nyerere, but never saw light of day.

The dam seems to have been first conceived by a German engineer called Stigler who planned to build a bridge and dam over the gorge. He was killed in 1907 by an elephant, reputedly falling into the gorge that was then named after him.

Regular studies of the river and development projects along it continued from the 1900s to 1960s when after Tanzania’s independence in 1961, Nyerere embraced the project but never got to implement it until he retired in 1985.

Successive governments under Ali Hassan Mwinyi, Benjamin Mkapa and Jakaya Kikwete also failed to build the hydropower dam over the past 30 years due to a number of reasons, including a lack of funding and political capital.

However, President Magufuli revived the project after taking office in November 2015 and is today expected to seal a historic deal by witnessing the signing of the contract for the construction of the massive power plant.

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