In August 2017, the Tanzanian government advertised for bids to construct this dam. The selected contractor is expected to complete the dam in no more than 36 months. The power generated will be transmitted via a new 400kV high voltage power line to a substation where the power will be integrated into the national electricity grid. The
government of Ethiopia is advising the Tanzanian government on the implementation of this project. Although the
World Heritage Committee had reiterated its grave concern about Tanzania's decision to move forward on the project and added it to the grounds for the Selous Game Reserve to be on the
List of World Heritage in Danger, which grounds previously were only concerned with elephant poaching. In October 2018, after diplomatic negotiations between Tanzania's
President Magufuli and
Egypt's President Sisi, the government of Tanzania awarded the design and construction contract for this power project to the
Egyptian company Arab Contractors together with the Egyptian manufacturing company El Sewedy Electric, at a budgeted cost of US$2.9 billion (TSh6.558 trillion). In February 2019, the government of Tanzania handed the construction site over to the contractors. Allowing several months to mobilize equipment, actual construction did not start until the summer of 2019. In April 2019, the Tanzanian government made an upfront payment of US$309.645 million, representing approximately 15 percent total cost of construction.
Redesign and construction In 2018, a new design for Stiegler's Gorge Dam was unveiled. A 131m high and 700m wide dam wall is under construction. The hydropower plant is planned to have an installed capacity of 2,115 megawatts. If completed on time in 2022, this would be Africa's 2 largest dam by installed capacity, after Ethiopia GERD Dam 5100 megawatts, over
Egypt's Aswan High Dam (2100 megawatts), Mozambique's
Cahora Bassa Dam (2075 megawatts), and Angola's
Lauca Dam (2070 megawatts). and 1,602 megawatts. The Stiegler's Gorge Hydropower Project will therefore significantly increase the installed capacity on-grid in Tanzania, supporting power for industrialisation and electrification. A key rationale for new electricity generation are Tanzania's regular electricity crises. The majority of Tanzania's power shortfalls occur in the dry season and in below-average rainfall years, this causes electricity shortages which are socially and economically damaging. For instance, load shedding between 2014 and 2015 supposedly cost between 5-7% of Tanzania's GDP. In preparation for the start of construction, Magufuli ordered
Tanesco to prepare the site. The government also handed out rights to log the large reservoir area, which could bring in significant revenue.
Arab Contractors, a public sector Egyptian firm would undertake the civil engineering works while El Sewedy Electric would install the electro-mechanical equipment including the turbines, generators and transmission lines. They signed contracts with the state-owned energy utility company
TANESCO. The government has publicly stated that the dam will be financed by Tanzania's national budget, yet no funding package was announced and the World Bank and other financiers rejecting support for the dam. with guarantees from the
United Bank for Africa and
CRDB Bank, which they plan to repay through the project contract. After the allocation of a portion of the national budget for the project in 2018, in February 2019, the government will officially hand over to the contractors. The government used this figure in announcing the new design and feasibility study in 2018. However, Hartmann claims the underlying costs have changed, in the price of concrete and construction costs and in engineering services. Using contemporary dam cases, he suggests that, after excluding socio-environmental mitigation, the current cost estimation should be US$7.57billion, rising to US$9.8billion if a conservative amount of overrun is factored in.
Tanzania has not announced any funding agreements for the dam's construction. Given the country's economy and tax base, there are doubts about whether the government has sufficient revenue to build the dam. This financial situation could delay or stop payments to the contractors which would harm or derail construction. Additional risks come from the choice of the two contractors. According to their public profiles, Dye claims that neither company has had experience of dam construction, and rather primarily builds commercial and residential buildings and transmission lines. This lack of experience is notable given the size of Stiegler's Gorge Dam and the degree of hydrological flux in the Rufiji River. There has not been a supervising, 'owner's engineer' appointed to ensure the quality of construction. This contracting arrangement and the appointed companies entail important risks. Some of these are technical, concerning the construction of a project that stands up and functions (producing electricity) for the intended 50 years. This will depend on the accuracy and rigour of hydrology, sediment, climatic and hydropower studies and the engineers' ability to accurately implement complex designs. There are also significant concerns over poaching which has been a longstanding issue in the Selous Game Reserve. Poaching was the primary reason for placing the
UNESCO World Heritage Selous Game Reserve on a list of endangered sites. The increased presence of people and steady flow of construction traffic, as well as logging camps, provides substantive opportunities for poaching and smuggling, especially if the companies do not have know-how to enforce anti-poaching measures. Thus, the choice of the contractors magnify the pre-existing risks of undertaking the Stiegler's Gorge project. ==Risks to operation ==