NDC and Mtwara Development Corridor
This project is the flagship of the Southern African Development Community (SADC) -Development Finance Resource Centre’s (DFRC) Programme on Infrastructure/PPP Development Activities. It aims to set up a PPP Facilitation Unit at the National Development Corporation of Tanzania and to develop the Unit’s capabilities to appraise infrastructure projects for private investment. The DFRC’s business planning calls for several efforts to help key infrastructure Development Finance Institutions (DFI) in the region develop skills needed to manage PPI project development. Given the policy environment in Tanzania, the NDC has agreed to undertake this activity as a pilot effort on behalf of the SADC DFI Network and for the Network’s secretariat, the DFRC.
The NDC has played a leadership role in the Network. Its involvement in the capacity building activities described herein will be the first of the DFRC-supported capacity-building activities in support of infrastructure development. Should the model prove to be successful, it will be replicated across the SADC region to develop further the Region’s capacity to appraise and package infrastructure projects for investment.
On 15 December 2004, the heads of state of Malawi, Mozambique, Tanzania and Zambia signed an agreement to work together on development of the Mtwara Development Corridor. They agreed to implement a number of projects as part of the corridor programme, a spatial development initiative involving areas of the four countries that are or can easily be served by Tanzania’s Indian Ocean port of Mtwara. The Mtwara projects include the development and rehabilitation of roads, lake ports, pipelines, and air transport facilities. Many of these projects will endeavor to involve private sector participation in the development and management of infrastructure (referred to as “private participation in infrastructure,” or PPI projects). They have already undergone preliminary feasibility assessment, and the overall economic potential of the corridor has been well documented.
On 17 February 2000, the Government of the United Republic of Tanzania granted an exclusive mandate to the National Development Corporation (NDC) to act as the government’s executing agent in developing, coordinating, and implementing projects in the corridor. Except for government approvals that are required by law for project implementation (e.g., granting of permits, licenses, rights of way, etc.), NDC’s Board has the authority to enter into agreements and contracts with experts, developers, investors, financiers, contractors, suppliers, operators, etc., in exercising their mandate to develop the corridor projects. The Tanzanian government has pledged NDC full cooperation in achieving deal closure and ensuring that suitable monitoring arrangements are in place for project implementation. Government has also pledged suitable funding to NDC, along with the right to propose suitable legislative and policy measures designed to promote development of the corridor.
In order to carry out these responsibilities, NDC staff requires a strong grounding in the financial, economic, and risk analysis that is a critical underpinning of PPI project appraisal and evaluation. In line with other efforts currently underway in NDC to strengthen project quality and results-based management, the development of skills to supervise PPI investment appraisal and risk analysis is considered essential.
Following the development of the TOR and successful funds application by the DFRC and the NDC to the Public Private Infrastructure Advisory Facility (PPIAF) of the World Bank, the bidding process was begun in 2005 and resulted in the competitive appointment of the Consultants’ CPCS Transcom (Canada) to establish the PPP Unit, train designated staff on appraisal and risk analysis techniques, and appraise 3 projects for investment. The World Bank is task managing the project on behalf of PPIAF. The project has now begun, and the Consultants are in residence in Dares Salaam since February 2006.
The objectives of this project are to:- Strengthen the NDC staff’s analytical capabilities in PPI project appraisal and risk analysis;
- Enhance the ability of staff to supervise and do quality control on technical analyses carried out by Consultant;
- Develop an institution wide standardized analytical approach for financial, economic, and risk analysis of PPI projects and applying it in three pilot projects of the Mtwara Development Corridor Program;
- Provide a foundation for, and pilot implementation of, similar capacity building efforts for other DFIs in the SADC region.
The three pilot projects to be appraised by the Consultant are expected to result in PPI transactions that are pioneering in some important respect, reflect some measure of innovation, and offer potential demonstration effects.
These comprise:- Three of the eight Mtwara Corridor potential PPI projects thoroughly appraised and packaged for offer to private sector partners;
- A small team of NDC staff members (the “PPI facilitation unit”) trained to conduct project appraisal and packaging in order to carry on with the facilitation of appraisal and packaging of the remaining priority projects; and
- Several staff members from other SADC DFIs also trained through these efforts, through secondment to the NDC PPI project appraisal team.
The third point illustrates the important regional dimension of the project; in that the NDC has agreed to undertake the project as a pilot on behalf of the SADC DFI Network. This is being achieved through the secondment of staff from the partner countries of the Mtwara Development Corridor, Malawi, Mozambique and Zambia. The training programme is being designed with a ‘learning by doing’ emphasis.
The critical delivery dates of the Project are:- Submission of Inception Report – March 13, 2006
- Submission of First Interim Report – April 3, 2006
- Submission of Second Interim Report – June 26, 2006
- Submission of Draft Final Report – July 24, 2006
- Holding of Project Workshop – prior to August 7, 2006
- Final Report – August 21, 2006.
The SADC-DFRC and the NDC have established a Project Steering Committee (PSC) or Project Task Team, to coordinate and guide the conduct of the study and arrange for review of the Consultant’s outputs. Membership and working Terms of Reference were reviewed with the World Bank in a meeting in Dares Salaam on February 17th, 2006. It was agreed that the committee will include members from the Tanzanian Ministry of Infrastructure Development, NDC, SADC-DFRC, PPIAF, World Bank (local and Washington offices) and AfDB, and will be chaired by the DFRC.
The Consultant will report to and liaise regularly with the Committee for guidance on day-to-day activities, through the onsite member (NDC). Responsibility for decisions on project selection will rest with NDC.
A World Bank Peer Review Team has also been established to review and provide timely feedback on the quality, appropriateness and relevance of the Consultant’s output. Members of this Team include the World Bank, African Development Bank and the Development Bank of South Africa’s infrastructure specialists, financial specialists and country operations officers.
The Team Leader and PPP Expert/Financial Specialist and the Organization Expert and project manager arrived in Dares Salaam in early February 2006. Together with the Resident Legal Expert, who is a permanent resident of Dares Salaam, they participated in organizational meetings with NDC, World Bank and PPIAF staff and regional country representatives. Critical meetings are noted below.
Thursday, February 16 2006 was the Project kick-off meeting at the World Bank’s Premises in Dares Salaam, which was chaired by the Hon. Prof. Simon M. Mbilinyi, Chairman of the NDC Board. It was agreed that Week 1 of the project would be considered to begin on Monday, February 20, 2006. During that week the Consultant began the process of gathering and reviewing documents, carried out a preliminary assessment of ten candidates proposed by NDC, held meetings with senior NDC staff related to formation of the PPI Unit and organized logistical and administrative support for the project.
The Resident Project Finance Expert and Resident Infrastructure Investment Economist arrived on February 26, 2006. Together with the Senior Advisors and Legal Expert, they met NDC and MtDC staff, developed a detailed assessment process for the candidates, outlined the training programme, and undertook a preliminary review of the projects.
More than twenty representatives of Tanzanian ministries, agencies and parastatal corporations (government stakeholders), as well as representatives from Malawi and Mozambique, SADC-DFRC, press and individuals from the private sector attended the Project kick-off meeting held on February 16th. World Bank staff in Washington participated by video conference. The meeting featured presentations on the Mtwara Development Corridor and other development initiatives in the region, as well as an introduction to the Project by the Consultant and a question and answer session with local stakeholders.
Arrangements have been made for representatives of Malawi, Mozambique and Zambia (regional stakeholders) to participate in reviewing progress on the Project, by video conference after the two Interim Reports, and in person at the time of the final Workshop, following submission of the Draft Final Report. These representatives will keep their respective governments informed about the project. A round table meeting of Tanzanian government stakeholders is planned for the week of March 27, 2006. The Consultant is arranging with the management of NDC for introductory meetings with individual public and private sector stakeholders in the coming weeks. The purpose of these meetings will be to introduce the Project and elicit views on project selection and the operation of PPI in Tanzania and in the Mtwara Development Corridor in particular.
The Mtwara Development Corridor (MtDC) is one of the SADC Spatial Development Initiatives mounted under the SADC Regional Indicative Strategic Development Plan (RISDP). The first SDI established was the Maputo Development Corridor established between the Republic of South Africa and Mozambique in 1995. There are now nine SDIs identified of which the MtDC is one. There are also three other initiatives with potential synergies for SDIs. The SDI program has been recognized by SADC as an effective way in which to unlock the Continent’s wealth and it is becoming a building block in the implementation of the New Partnership for Africa’s Development. The SDI concept was developed by the Government of the RSA to promote investment in regions of the Republic that were underdeveloped but had potential for growth. The methodology involves a process in which the public sector develops or facilitates conditions conducive to private sector investment and Public-Private-Community partnerships.
Following the success of the Maputo Development Corridor, the RSA also established a Regional SDI Support Program at the Development Bank of South Africa (DBSA). As well, with the support of the French Development Agency, the DBSA is funding the establishment and strengthening of Development Finance Institution capacity in certain SDI areas.
The Mtwara Development Corridor was established under a multilateral Agreement signed by the Heads of State of Malawi, Mozambique, Tanzania and Zambia at Lilongwe on 15 December, 2004. The purpose of the Corridor is to promote trade and investment in the four countries by improving and integrating transportation and other infrastructure.
The Mtwara DC includes the following national administrative units:- Malawi: The Northern Region, five of the nine Districts of the Central Region and Mangochi District in the Southern Region.
- Mozambique: Niassa Province and Cabo Delgado Province.
- Tanzania: Administrative regions of Mtwara, Lindi, Ruvuma, Iringaa, Mbeya, and the area, South of the Rufiji River which includes part of the Coast Region and the Morogoro Region.
- Zambia: Eastern Province and North Eastern Province.
The Mtwara Corridor is defined around the alignment of the Ruvuma River. The eastern end is anchored by the Port of Mtwara which handles mainly cashew nuts and passenger traffic. In 2004, tonnage throughput was 69,000 mt and the Port handled 10,000 passengers. The Mtwara/Mbamba Bay Road is an 811 km link composed of bituminous and earth sections. Mbamba Bay links the Corridor to numerous ports on Lake Nyasa which is characterized by a number of small scale services offered by Malawi Lake Services and The Marine Services Company of Tanzania. The Corridor is shown in Figure below.
For more information download the following documentaion.
- Mtwara Development Corridor PPI Appraisal and Institutional Strengthening - Handbook (10.5 MB)
- Mtwara Development Corridor - Public Private Infrastructure Appraisal and Institutional Development Final Report - Volume 1 (1.20 MB)
- Mtwara Development Corridor - Public Private Infrastructure Appraisal and Institutional Development Final Report - Volume 2 (7.50 MB)
- Mtwara Development Corridor - Public Private Infrastructure Appraisal and Institutional Development Final Report - Volume 3 (1.70 MB)
- Mtwara Development Corridor - Public Private Infrastructure Appraisal and Institutional Development Final Report - Volume 4 (1.65 MB)
