Tanzania Becoming A New Chinese Province In Africa?

Tanzania Becoming A New Chinese Province In Africa?
Chinese workers are all over Africa

“China Communications Construction Company (CCCC) has five road construction contracts with 273.5km long worth US$ 178.333 million which include the 36km Mbeya-Lwanjilo road (US$ 33.622 million); 36km Lwanjilo-Chunya (US$ 24.5 million); 71.8km Mwigumbi-Maswa-Bariadi-Lamadi (US$ 40.91 million); 58.8km Nzega-Tabora (US$ 40.283 million) and the 70.9km Fufu Escarpment-Dodoma (US$ 39.05 million),” reveals data from the Roads Agency.

Beijing Construction Engineering Group Co., Ltd. (BCEG) won the tender for the Dar es Salaam Bus Rapid Transit to construct the Ubungo Terminal, Feeder Station & Up-Country Bus Station worth US$ 8.91 million; Kivukoni Terminal & Feeder Station worth US$ 3.042 million; Kariakoo Terminal & Feeder Station worth US$ 3.854 million; and Feeder Station worth US$ 2.68 million, while China Henan constructed the Ruvu Bridge for US$ 2.69 million.

Other Chinese companies with their projects into brackets are, Jiangxi Geo-Eng (75km Sumbawanga-Kanazi road worth US$ 47.9 million), China Hunan Construction Engineering Group Corporation – CHCEG (76.6km long Kanazi-Kizi-Kibaoni road worth US$ 50.3 million), China Railway 15th Bureau Group Corporation – CR15G (112km long Sumbawanga-Matai-Kasanga road worth US$ 80.912 million), and China Newera (64.2km Ikana-Laela road worth US$ 46.812 million).

Japanese construction companies, which in the early 1980s and late 1990s were competing with European companies, this time around only three had won six contracts of 204.4km long worth US$ 106.09 million, while 12 European companies won 1,688.91km long contracts worth US$ 667.25 million.

Enoch Ugulumu, head of Planning and Economic Department at the University of Iringa (formerly Tumaini University), says though China have been doing business in Africa for many years, now the country has turn to Foreign Direct Investment (FDI) to look for viable and sustainable investments like extractive industry.

“Most Tanzanians use Chinese goods – from urban to rural areas – we have cellphones, clothes and motorbikes popularly known as ‘Boda-Boda’. But these twin projects will surely mark the permanent Chinese existence in the country as we’re told the mineral reserves are likely to last for more than 100 years,” says Ugulumu who has been closely following up the investment.

The Chinese Ask No Awkward Questions Unlike Others

However, Ugulumu has more confidence on the Chinese engagement in mining, saying implementing the projects will be reality as China does not interfere in the internal affairs of its partner countries or demand democratic or governance reforms.

“Most African countries, for instance; Malawi, Zambia, Tanzania and South Africa fairly satisfy the Western democratic prescriptions, but look how the majority of their citizens who are crippled by poverty, inequality and unemployment. Let the Chinese come in,” he emphasizes.

Speaking on transparency on the FDI, Ugulumu says China is very transparent compared to the United States, giving examples on countries like Zimbabwe, Uganda, Libya, Chad, Gabon, Mozambique and Guinea where the two had investments and US failed to provide official data.

Though China has invested billions of dollars in Africa in the extractive industry in the quest of securing resources it needs to fuel its booming economy, including the 239 square kilometers at the Mui Basin in Kenya that host more than 400-million tons of coal worth US$ 38.123 billion under China’s Fenxi Mining Group, but the Mchuchuma and Liganga projects seem to be the biggest investment in East Africa for the ‘Dragon’.

The NDC and SHC signed a joint venture accord on September 21, 2011 and have jointly formed Tanzania China International Mineral Resources (TCIMR) that, among others, will see the construction of a thermal power plant at the Mchuchuma coal mine in Ludewa district to produce 600MW almost matching the 623MW that Tanzania’s energy sector currently produces.

Under the agreement TCIMR will build a coal mine, iron ore mine, coal-fired power plant and steel works at the Liganga iron ore and nearby Mchuchuma coal mines, some 800km south-west of Dar es Salaam. The project will construct a 220 kV transmission line from Mchuchuma to Liganga and 400 kV transmission line from Mchuchuma to Mufindi to connect with the national grid.

SHC won a competitive tender that saw a total of 48 international companies on the twin projects, among them three were international Australia based, four from India, two from China, others from Singapore, United States of America, South Korea and Malaysia.

Some of the companies were China Huadian Engineering Company Limited, Nava Bharat Pte Limited (Singapore), Sarda Energy and Minerals Limited (India), AES Corporation (US), STX Corporation (Korea), Rio Tinto (Australia), BHP Billiton (Australia), CANHAM Mining International (Australia), Indria Berhad (Malaysia), Tata Steel Corporation (India), Global Steel Holdings (India) and Ispat Industries (India).

The Mchuchuma has identified over 536 million tons of coal reserves, while the Liganga area has estimated iron ore deposits between 200 and 1,200Mt, with 45Mt of iron ore already proven through drilling. It is estimated that three million tons of coal will be mined annually, lasting for over 100 years and 2.9 million iron ore deposits mined every year for not less than 90 years.

To most Tanzanians, SHC seems to be the redeemer as they still complain of frequent power cuts and higher tariffs they are currently paying, making it difficult for most of them, whose daily income is averaged at less than one US dollar.

“The (electricity) tariffs are very high, we can’t afford. Let another source of power come, maybe the tariffs will be reduced,” says Mathias Maliwa (42), a businessman based in Iringa Region.

The mining contract has so far drawn concerns even to politicians, including the opposition, who for many years have been in contention with the government due to shadowy contracts that exploit the country’s mineral resources, and now have confidence on the Chinese investment that they can’t wait to see it take off.

Madaha Juma Madaha, Ludewa District Commissioner, is optimistic that the projects now are coming to reality after many years of dilly-dallying and that power production could at least bail the people out from frequent blackouts while providing more than 8,000 employment opportunities.

“This time around, under the Chinese, we can achieve something from our resources. But we want the locals to benefit first,” he says.

Ludewa MP, Deo Haule Filikunjombe (Chama Cha Mapinduzi), says the agreement between SHC and the Government could bear fruits, but cautioned the government to make sure that first beneficiaries of the twin projects be the Ludewa residents.

“We don’t want this to be another demonstration area like what is happening now in Mtwara,” says Filikunjombe, referring to the current situation in Mtwara region where residents have held a number of demonstrations to resist the building of a gas pipeline to Dar es Salaam.

“Compared to other mining contracts, at least here now the government has done something by securing 20 percent in the joint venture which could increase as production continues,” he said, adding that Tanzanians were represented on all process through their representatives.

It has already been agreed between SHC and NDC that coal and steel factories are going to be built in Ludewa so residents need to get rid themselves of fears.

On September 2012 All Africa reported that Stanbic Bank Tanzania had secured syndicated financing worth US$ 2.914 billion for the projects in collaboration with ICBC bank whereby the two had signed an agreement with TCIMR to provide financing.

Part Two