Tanzania is taking a harder line in negotiating public-private partnerships, signaling a shift toward stricter financial discipline even if it slows the rollout of major infrastructure projects.
That stance was made clear this week
by David Zacharia Kafulila, head of the Public-Private Partnership Centre,
following the collapse of negotiations with an investor over the proposed
Kibaha–Chalinze toll road.
Speaking on Dakika 45 aired by ITV,
Kafulila framed the failed talks not as a setback, but as evidence of a system
under strain and beginning to enforce its own rules.
“At the end of the day, these are
commercial negotiations,” he said. “But the government is negotiating on behalf
of the public.”
Numbers,
not intentions, break deals
The dispute, he explained, came down
to one thing: numbers.
The Kibaha–Chalinze road project had
followed a structured PPP model. The government had already conducted
feasibility studies, defined technical specifications and cost benchmarks, and
invited investors to bid under a competitive process.
Nine firms entered the race. After
multiple evaluation rounds, only three remained—each from China. But when it
came to final submissions, only one investor provided the full documentation
required to proceed.
Negotiations followed. They did not
last.
“The gap between the investor’s
numbers and the government’s numbers was too wide,” Kafulila said.
Those numbers are not abstract. They
determine how much a project costs, how long a concession lasts, and ultimately
how much citizens pay either directly through tolls or indirectly through
public subsidies.
In this case, the divergence was
significant enough to halt the process entirely.
A
calculated refusal to rush
Across much of Africa, PPP projects
have often been criticized for opaque deals, inflated costs and long-term
fiscal risks. Tanzania appears to be positioning itself differently at least in
principle.
Kafulila insisted that walking away
from a deal is sometimes the most responsible outcome.
“If we accept numbers that are not
realistic, the burden will come back to the public,” he said. “You cannot fix a
bad contract later.”
That argument goes to the heart of the government’s balancing act. Investors seek returns that justify capital risk.
Governments must ensure affordability and value for money. Where those
interests diverge sharply, projects can stall.
Analysts say this tension is not
unique to Tanzania, but the willingness to terminate negotiations at an
advanced stage is notable.
Public
scrutiny enters the process
The debate around the stalled road
project has played out not only in policy circles but also across social media,
where delays are often interpreted as inefficiency or lack of preparedness.
Kafulila pushed back, pointing
instead to a deliberate effort to open up the PPP process.
Through monthly public
dialogues launched earlier this month at the University of Dar es Salaam—the
government is inviting investors, academics and citizens to interrogate its
infrastructure strategy as it prepares to implement Development Vision 2050.
The approach reflects a broader
attempt to build legitimacy around long-term projects that often outlast
political cycles.
“People should know from the
beginning what is being negotiated,” Kafulila said. “So that when agreements
are signed, it is not a surprise.”
Transparency, he added, also acts as
a filter allowing public scrutiny of potential investors and their track
records before contracts are finalized.
The
cost of caution
Still, the trade-off is clear.
Tougher negotiations can mean slower delivery.
The Kibaha–Chalinze corridor is a
critical transport link connecting Dar es Salaam to inland regions. Delays in
upgrading it could carry economic costs, particularly as traffic volumes
continue to rise.
Critics argue that prolonged
negotiations risk undermining momentum at a time when Tanzania is scaling up
infrastructure investment.
Kafulila does not deny the
delays but rejects the premise that speed should come first.
“The government cannot sign an
agreement just to show progress,” he said. “Accountability will come later.”
Restarting
the process
The project is not dead. The
TANROADS has already begun exploring a new path under the same PPP framework.
Kafulila pointed to provisions in
the law that allow for “special arrangements,” a mechanism designed to
fast-track projects where credible investors show interest. Under this
approach, negotiations can move more quickly without restarting the entire procurement
cycle.
Whether that will attract new
bidders or bring back previous ones under revised terms—remains to be seen.
A
broader signal to investors
Beyond a single road project, the
episode sends a signal to investors eyeing Tanzania’s infrastructure pipeline.
The government is open to private
capital. But it is also drawing clearer boundaries around risk, pricing and
public interest.
For investors, that could mean
tougher negotiations and thinner margins. For the government, it raises the
stakes of getting project preparation right—from feasibility studies to
financial modelling.
For citizens, the outcome is less
immediate. The road remains unbuilt—for now.
But Kafulila argues that restraint
today could prevent larger costs tomorrow.
“PPP is not just about finding an
investor,” he said. “It is about agreeing on terms that make sense—for
everyone.”
