ABC Attorneys provides a highly effective one-stop shop for infrastructure. Our lawyers advise sponsors, lenders, institutional investors, infrastructure and pension funds, commercial banks, corporations, developers, insurance companies and governmental entities across the spectrum of infrastructure asset classes. With our unique combination of skills and experience, we provide clients with integrated services and guide them through difficult issues on their most important transactions. We provide full service across all infrastructure asset classes including:
- Transportation
- Energy & power
- Telecommunications
Most developing countries require major step increase in infrastructure investment to alleviate growth constrains. Tanzania as one of the rapid growing Countries economically has recognized the intervention of private parties in taking different infrastructure projects such as;
- Roads
- Bridges
- Railway
- Energy
- Industries and manufacturing
- Exploration and mining
- Constructions of buildings, inter alia.
The laws of Tanzania are clear, in order for a private party to undertake any infrastructure project it has to be in a form of partnership or private party taking a project on behalf of the Government. In line with the laws partnership means
“An arrangement between contracting authority, in this context “the government” and private party that being any entity outside the government. “
this private party is required to perform functions such as in accordance with the partnership in hand.
- Performing of duties on behalf of the Government
- Acquiring and using public properties for commercial purposes.
- Assuming substantial financial, technical and operational risks in connection with performance of any function upon public properties
- Receiving benefit on behalf of the state be it charges, fees or consideration on any contractual agreement.
It’s worth noting that the projects that lead to partnership shall be in line with government priorities as per national development.
The shallow economic recovery in most developed countries markets has swiftly shifted the focus to the rapidly growing market. This is accurate to the infrastructure development sector.
Tanzania not being any different to most developing states it’s with abundance of natural resources and recent mineral, oil and gas discoveries demographic social and political shift and more investor friendly environment, the investor spotlight shines even brighter on Tanzania. Although the internal capacity is limited and with competition priorities such as the health, agriculture, education, the government cannot support most of the projects and that’s when private-public partnership comes into place.
Few African countries including Tanzania have a viable structured PPP programs that supply both a structured process and well regulated system. This is necessary to provide more certainty and reduce risks for long term investors.
Infrastructure Finance is the new hype, for the nation is challenged to maintain its support system during this remarkable shift. The decisions wrapped on the said are not easy for the society has become more complex so have the infrastructure systems and the values and institutions that determine societies choices. Gone are the days when community can work around with few narrow streets and basic water and sewage system.
The infrastructure business will never be a dull one for without such systems such as transportation energy and water neither the economy nor society can properly function no matter how sophisticated it may be or how complex it may be it will always remain a vital business sector.
The vitality of financing the infrastructure sector and turning it into a proper business lies in:
- The functioning of the private sector and government organizations that provide and sustain the essential structures equipment and service infrastructure.
- The infrastructure system provides the tangible basis of life.
A limited view of what infrastructure may include covers its deep integration with trade, transportation and all economic activities.
Let’s look upon some of the infrastructure divisions and see the promises that lie within them as sectors worth investing in.
Measured by its investment and expenditure the transportation sector is the widest and most diverse of the public infrastructure sector.
Transportation as a sector requires many types of organization infrastructure equipment and vehicles to facilitate mobility of people and goods.
This sector requires PPP for maintaining of the sector is challenging for the said sector demands an out pacing investment, the maintenance costs and expansion of the system requires adequate funds.
With the increase in population and the rise of travel demand, the sector through roads alone will be stressed, hence the desperate need to expand other means of transport becomes of great importance.
Development has made the urge and desperate need for smart roads (highways) and railways (standard gauge railway Line (SGR) Project) which demands a whole transformation of the traffic management and vehicle operations. The government introduced the now we see DART, the Standard Gauge Railway Line (SGR) Project
a. The Railway sector
The Government through the Reli Assets Holding Company (RAHCO), currently as Tanzania Railway Corporation (TRC) is currently taking on a major project that will be marked as a life changing through constructing new railway line links. The government is constructing a Standard Gauge Railway (SGR) from Dar es Salaam to Mwanza via Isaka (1,219 km). This partly follows the African Union (AU) and East African Community (EAC) decision in 2006, which was that all new railway development projects on the continent would be to a standard gauge specification.
Hence TRC intended to lay a separate SGR line alongside the existing Metre Gauge Railway (MGR) along the entire length from Dar es Salaam to Mwanza, via Isaka. The implementation of the SGR project is currently taking place in phases. Where phase one is from Dar es Salaam to Morogoro while phase two it will be from Morogoro to Makutopora and it has a total length of approximately 541 km. The Government through TRC, awarded the contract to the firm Yapi Merkezi Insaat ve Sanayi (Yapi Merkezi) being a private firm to provide design and construction services of the SGR for these two phases stretching from Dar es Salaam to Mukutopora. Although the whole operation shall be taken and run by The TRC.
The SGR Project is in line with the overall aim of the Government to revitalize and reinvigorate the rail sector so as it can contribute more to the national economy.
Moreover, currently over 95 percent of the traffic leaving the port of Dar es Salaam is transported by road to the detriment of the road network. It is thus expected that the upgrading of the rail sector, especially the Dar es Salaam to Isaka-Mwanza link, will increase freight and passenger capacity as well as release pressure on the road network. The SGR is also expected to reduce the travel times for both goods and passengers.
b. Roads and bridges
Tanzania has approximately 87,600 kilometers of public road. The capability of the nation to upgrade its road infrastructure will be one of the key elements in whether it can progress to an impressive rates of economic growth being able to attain various sectors in given years.
In an effort to relieve pressure on the road network by improving the public transport system in Dar es Salaam and encouraging large numbers of citizens to choose this over private cars, the government of Tanzania is in the process of constructing phase 1 of the Dar es Salaam Rapid Transit System (DART) along a 20.9 kilometre stretch of the Morogoro Road from the city centre. The system being put in place is a bus rapid transit system, which has been successful in several cities in other developing countries.
Tanzania was one of the first countries to adopt the Road Management Initiative (RMI) framework to reform the road management and maintenance systems with a view to addressing the classified road maintenance needs, the Parliament of the Republic of Tanzania enacted the Roads (Amendment) Tolls No. 2 Act in July, 1985. Road financing as a sector is important especially when we are looking for means to sophisticate the whole system to what it is to what it will be in the near future.
The financing of the roads is done by the government while allowing constructors to be independent firms with adequate technical support and resources enough to run the whole project form beginning to end without waiting on the government’s backup.
The future of transportation is exciting to imagine if society can overcome the barriers to system improvement. While indicators of strain include traffic congestion high infrastructure cost, energy consumption environmental impacts and security concerns the opportunity to use new technologies and methods to create better cities and social systems is riveting one.
The Tanzanian telecom sector contributed by 1.9% to the country’s real GDP in 2018 with USD 859 million, compared to USD 672 million in 2014, increasing by 28%, leaving it to be the second largest telecom market in East Africa behind Kenya. The telecom sector is different sector especially when it comes to ownership and running of it involves more of private ownership as compared to other sectors. This sector is a rapid changing one. Other than the attributes that relates it to consumer services with constants introduction of new yet trendy new products, it resembles other networked infrastructures because it’s a critical supports and it requires physical systems that are sometimes collocated with other public facilities, and it is subject to regulation.
The telecom sector has a dual aspect of telecom which lies in line with the aspects of telecom which is also linked to the media and entertainment industries. In most cases the two (infrastructure related and telecom sector) are bundled together for they go hand in hand.
The sector allows the pathway of information compared to transportation, which is the pathway for flow of people and goods. Although telecom services remain regulated, the rules adapt to new technologies and business systems.
The business operation of the sector are different from other forms of infrastructure hence in the running of it especially on the regulatory part of it. While the physical attributes of the telecommunications industry have similarities to those of other networked infrastructure industries. Investment outlooks in the telecommunications industry have changed along with technologies and business systems.
Minerals and gas in Tanzania is one among the paramount source of Economy growth among others. It’s worth noting that one of the major tools to manage this sector is through good governance and legislation enactment that reflect the reality of the sector including the oil and gas sector. It’s a common definition that an industry is used for either production or manufacturing of raw materials from its natural form to a desired end product.
There are primarily three methods that are used in mineral extraction in Tanzania which are
- Underground mining
- Surface (open pit) mining
- Placer mining
It’s not a secret that Tanzania is predominantly a mining country with both small and large-scale operations. And it’s only recent the coast of the country has experienced an increase in exploration of gas and oil. Mnazi Bay and Songo Songo Island are famously known as the reserves for natural gas, while there are gas discoveries that are found offshore. It’s in the plans that the country is looking forward to become an exporter of liquefied natural gas (LNG).
The minister of the Ministry of Energy and Minerals grants exploration and development licenses for the oil, gas and mining sectors. The Petroleum Act gives the Minister discretionary power over the licensing process although agreements can only be awarded after a tendering process and after prior approval from government. Mining licenses are granted on a first come-first-served basis.
In providing further legislative basis for beneficial ownership disclosure in the extractive industries, the government published Tanzania Extractive Industries Transparency Act Regulations in 2019.
The Tanzania’s EITI Multi-Stakeholder (the working group) was officially inaugurated by the Deputy Minister of Energy and Minerals. The Working Group consists of five members each from government, companies, and civil society. This legislation institutionalizes the role of the Multi-Stakeholder Working Group and legally enforces timely and accurate reporting by companies and government agencies covered by EITI Reports.
- With more than 15 years of experience representing clients on all sides of projects, we have one of the most experienced teams of infrastructure and energy lawyers in Tanzania.
- Our lawyers have been instrumental in the implementation of many infrastructure projects.
- We have strong relationships with the major banks that provide financing for energy companies, and advise on energy transactions globally.
- Our Energy and Infrastructure team works closely with sponsors, developers, governments, banks, contractors, consultants and other market participants. to advise on a range of areas such as oil and gas, power and electricity, equipment procurement, construction arrangements and PPP projects. We also offer advice on credit facilities, including project and equipment finance.