--/Keza-Gitega-Musongati Railway Project

··· INTRODUCTION

The project involves three countries , and and concerning the Management of the Project, there is a Memorandum of Understanding whereby Rwanda is leading the coordination, Tanzania is chairing and Burundi is the deputy chair.

Feasibility and preliminary studies are funded by the African Development Bank (AfDB).

··· DESCRIPTION OF THE PROJECT

– 1,672 km rail network from Dar-es-salaam to key centers in Rwanda and Burundi

– 970 km of existing Meter Gauge line (Dar es salaam to Isaka)

– 702 km of new construction (Tanzania-396, Burundi-183, Rwanda-123) · CURRENT STATUS

The Detailed study of Dar es salaam-Isaka-Kigali/Keza-Gitega-Musongati Railway Project is being carried out by a Canadian Firm”CANARAIL” in association with GIBB Africa, a Nairobi-based East African consulting firm.

The progress of the study stands at 95%, the validation of the Final report is scheduled in October, 2013.

· PROJECT OBJECTIVES

– Provide modern, rail-based transportation service in the East African Central Corridor.

 Improve connection of landlocked countries to World and African economies

 Provide improved reliability for rail transport over in Tanzania

 Lower cost for imported goods in western East Africa

 Reduced deterioration of road networks

 Enhance financial attractiveness of potential mining developments

FREIGHT TRAFFIC FORECASTS MADE BY THE CONSULTANT(CANARAIL)

· Base case

– Diversion of existing cargo now moving through the ports of Dar es Salaam and to the new railway (60% and 50% respectively)

– Incorporates future growth of existing mineral development in each country as well as estimated output of those mines that are currently under development

· Low traffic represents base case for potential PPP investors (i.e. traffic that is 100% certain for achieving his minimum Return on Investment)

· The optimistic case

– Represents higher rates of diversion of existing traffic to/from Dar es Salaam and Mombasa (80% and 70% respectively).

All existing and likely future mineral developments are included as well as the Consultant’s reasonable estimation of additional developments coming to fruition. IMPORT / EXPORT TONNAGES PER COUNTRY (YEAR 10 OF OPERATION)

TONNAGES LOW BASE OPTIMISTIC RW ANDA (incl. DRC) 2 , 2 9 7 , 5 6 7 4 , 6 6 4 , 2 2 7 1 1 , 4 9 3 , 7 1 7 E x p o r t 3 3 3 , 1 1 2 1 , 7 2 3 , 5 7 8 5 , 0 7 8 , 3 7 3 I m p o r t 1 , 9 6 4 , 4 5 4 2 , 9 4 0 , 6 4 9 6 , 4 1 5 , 3 4 4 BURUNDI 3 , 1 2 2 , 2 2 8 3 , 6 5 2 , 5 7 5 5 , 7 7 0 , 3 7 5 E x p o r t 2 , 7 1 3 , 0 0 2 3 , 0 4 7 , 1 5 3 4 , 5 9 0 , 6 2 6 I m p o r t 4 0 9 , 2 2 6 6 0 5 , 4 2 2 1 , 1 7 9 , 7 4 8 TANZANIA (incl. UGANDA) 2 , 8 3 6 , 6 8 7 4 , 1 3 7 , 8 2 5 6 , 7 7 6 , 6 2 3 E x p o r t 4 2 9 , 5 9 3 1 , 1 7 5 , 6 2 3 2 , 2 2 0 , 9 6 9 I m p o r t 1 , 2 1 6 , 3 5 4 1 , 1 9 9 , 2 7 7 1 , 7 4 1 , 6 8 0 I n t e r n a l 1 , 1 9 0 , 7 4 0 1 , 7 6 2 , 9 2 5 2 , 8 1 3 , 9 7 5 TOTAL 8 , 2 5 6 , 4 8 2 1 2 , 4 5 4 , 6 2 7 2 4 , 0 4 0 , 7 1 4

· Estimated (Tentative) Overall Capital Cost (USD Millions)

Gauge Option Meter Cape Standard Geographical Segment Million USD Million USD Million USD Existing Line – Tanzania (Dar es Salaam – Isaka) 1,168 1,598 1,764 Existing Line SUB-TOTAL 1,168 1,598 1,764 New Line - Tanzania (Isaka-Rusumo-Ruvubu) 1,047 1,066 1,186 New Line - Burundi (Ruvubu - Gitega) 766 774 869 New Line - Rwanda (Rusumo - Kigali) 724 729 815 New Lines SUB-TOTAL 2,537 2,569 2,870 TOTAL 3,705 4,167 4,634 · (Tentative)Geographic Distribution

– Existing Line requires 32% to 40% of infrastructure investment

– Tanzanian share ≈60% 5,000 4,500  Including existing 4,000 Existing Line - Tanzania  US$ 2.2 to 2.9 billion 3,500 (Dar Es Salaam - Isaka) 3,000 New Line - Tanzania – Burundi share ≈22% Million USD 2,500 (Isaka-Rusumo-Ruvubu) 2,000  US$ 770 to 870 million New Line - Burundi 1,500 (Ruvubu - Gitega) – Rwandan share ≈18% 1,000 New Line - Rwanda 500 (Rusumo - Kigali)  US$ 720 to 820 million 0 Meter Cape Standard