VZCZCXRO2221
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHDR #0140/01 0431014
ZNR UUUUU ZZH
R 121014Z FEB 10
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC 9414
INFO RUEHNR/AMEMBASSY NAIROBI 1640
RUEHKM/AMEMBASSY KAMPALA 0168
RUEHJB/AMEMBASSY BUJUMBURA 3191
RUEHLGB/AMEMBASSY KIGALI 1668
RUEHTU/AMEMBASSY TUNIS 0051
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHLMC/MCC WASHINGTON DC
RHMFISS/CDR USAFRICOM STUTTGART GE
RHMFIUU/CJTF HOA//J3

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000140 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR CA/OCS, AF/E JTREADWELL 
TUNIS FOR ADB REP 
STATE PASS AID AFR/SD, USTR FOR WILLIAM JACKSON, USTDA FOR KATHRYN 
DORMINEY 
 
E.O. 12958: N/A 
TAGS: EAID ELTN ECON TZ
SUBJECT: FINANCE MINISTER PLEAS FOR POST-FLOOD RAIL/ROAD REPAIR 
ASSISTANCE 
 
REF: A: DAR ES SALAAM 17 B: DAR ES SALAAM 38 C: 2009 DAR ES SALAAM 
844 D: DAR ES SALAAM 80 
 
DAR ES SAL 00000140  001.2 OF 002 
 
 
(U) 1. SUMMARY: Minister of Finance Mkulo convened Chiefs of Mission 
from donor countries February 10 to request emergency funding of 
approximately USD 22 million to restore railway and road 
infrastructure destroyed by recent flooding.  The flooding occurred 
primarily in Morogoro region, following heavy rains in December and 
January.  The Minister's main concern is the destruction of major 
sections of the Central Line railway, disrupting the transport of 
goods between Dar es Salaam port and western Tanzania, Burundi, 
Rwanda and eastern Democratic Republic of Congo.  The assembled COMs 
expressed concern about the budget for rail repairs (at USD 12m 
likely an underestimate) and addressing short-term versus long-term 
transportation needs.  END SUMMARY. 
 
(U) 2. Following the Morogoro floods, the GoT initially assessed 
that its domestic contingency budget would suffice for 
infrastructure repairs and humanitarian needs.  However, a more 
recent assessment by experts from Tanzania Railways Limited and the 
Ministry of Infrastructure Development found the damage to be far 
greater than expected, resulting in this emergency funding request. 
(Note: We worked with USAID/OFDA/Nairobi to make a formal disaster 
declaration on January 13, providing USD 50,000 to the Tanzanian Red 
Cross to provide humanitarian assistance to some of the 40,000 
persons affected by the floods (ref a). End Note.) 
 
(U) 3. Mkulo noted that this has been a particularly difficult 
budget year for Tanzania, coping with revenue shortfalls due to the 
global economic downturn (estimated at USD 200 million) and dealing 
with several disasters, including severe drought - requiring food 
aid to more than 40 districts - and the Zanzibar power crisis (ref 
b).  The Minister acknowledged that due to budget constraints the 
2009/10 infrastructure budget was cut back considerably and covered 
only a small number of projects.  Although the GoT has long-term 
plans to completely refurbish the century-old Central Line, there is 
debate as to the most cost-effective way to accomplish this (see ref 
c).  Funding requirements would be substantial.  The World Bank is 
undertaking a Transport Sector assessment that will provide more 
information on how to refurbish the rail system.  One of the 
diplomats present recommended that the Minister approach the East 
African Community for potential funding to restore the rail service, 
given its importance as a connection to member states Rwanda and 
Burundi (see ref d). 
 
(U) 4. COMs raised concerns about the possibility of restoring the 
railway in the short term, given the extent of damage shown in the 
report and the pending "long rains" (generally March to May). 
Additionally, several COMs stated that the budget estimate seemed 
far lower than that required to fix the railway, due to the severe 
erosion and complete destruction of parts of the railway track. 
 
(U) 5. Mkulo proposed the following next steps: 
 
-- a team of engineers and other experts will evaluate the plans and 
the budget to restore the roads and railway line; 
 
-- a site visit will be arranged on February 27 for COMs to see 
firsthand the extent of the damage and to get a report on the 
revised budget and plans for restoration; 
 
-- the GOT will make a formal request for assistance to the donor 
community. 
 
(U) 6. The COMs attending the meeting made no specific funding 
commitments.  The World Bank and the EU indicated that they would 
consider ways to restore the railway line with a long-term view of 
developing the rail system.  The African Development Bank indicated 
that it could provide up to USD 1 million for humanitarian 
assistance. 
 
(U) 7. The Resident Country Director of the Millennium Challenge 
Corporation (MCC) subsequently reported on a meeting of Tanzanian 
transport sector donors.  The EU has up to USD 10 million (7.7 
 
DAR ES SAL 00000140  002.2 OF 002 
 
 
million euros) in funds that are available for support for 
assistance with natural disasters and other emergencies.  The EU is 
"positively considering" using a portion of these funds to provide 
relieve to Kilosa.  A World Bank transportation sector 
representative indicated that the World Bank office in Dar es Salaam 
was advocating use of a similar World Bank fund of up to TZS 30 
billion (USD 23 million) to provide similar assistance. The World 
Bank was still discussing modalities internally, i.e. grant, 
concessional loan, or other arrangement, but it appeared likely that 
the Bank would provide a significant amount of the funding 
requested. 
 
(SBU) 8. COMMENT: Although the impact of disrupted rail transit is 
real, the GoT's initial response reflects a common tendency to seek 
donor support reflexively before considering the problem fully.  The 
GoT did not provide an analysis of the cost of fixing the rails as 
compared to the economic losses or impact to the Dar-Dodoma road of 
altering the mode of freight transport.  The long-neglected Tanzania 
rail system accounts for only seven percent of goods moved through 
Dar es Salaam port. Similarly, the GOT was not prepared to discuss 
the relationship between an "emergency" repair and proposals for 
substantial repairs and upgrading to the entire rail system. 
 
(SBU) 9. COMMENT, cont: Minister Mkulo opened the meeting by saying 
that President Kikwete had asked him to convene the donors.  It was 
noted that the area most affected by flooding is Mkulo's 
parliamentary constituency of Kilosa. 
 
LENHARDT