Douala City Council: Douala Tram Project Guarantee Conflict Arises in Tender

• Douala is seeking private investors for its first tram line, estimated to cost CFA400 billion before taxes.
• The tender document (No. 016/AMI/CUD/2026) contains conflicting provisions regarding public financial guarantees for investors.
• One part outlines investor protection mechanisms, while mandatory annexes explicitly prohibit such guarantees.
• This contradiction needs resolution before partners are selected for the Douala tram project.
• The CFA400 billion estimate is an indicative budget for the 20-kilometer route, not secured financing.

Lawyers advising potential investors in Cameroonian public-private partnerships must scrutinize such documents meticulously, as the ambiguity surrounding financial guarantees could lead to unforeseen liabilities and disputes.

The city of Douala in Cameroon is embarking on an ambitious initiative to establish its inaugural tram line, a significant infrastructure undertaking projected to cost CFA400 billion before taxes. This substantial investment is sought from private sector entities, marking a key public-private partnership (PPP) for the region. However, the detailed tender documents issued for this project contain critical inconsistencies regarding the provision of public financial guarantees, creating uncertainty about how financial risks will ultimately be distributed among the participating investors, the municipal authority, and the Cameroonian government.

The call for expressions of interest, identified as No. 016/AMI/CUD/2026, was formally dated October 26 and subsequently made public on the international dgMarket platform on October 29, 2026. This document is central to the Douala tram tender, outlining the framework for potential private sector involvement. The presence of contradictory clauses within such a foundational document poses a significant challenge for prospective partners evaluating the project's viability and risk profile.

Within the comprehensive tender document for the Douala tram project, specific sections detail public support mechanisms designed to safeguard investors. These provisions aim to mitigate financial exposure, particularly if the actual passenger numbers fall short of initial projections. Such guarantees are typically crucial for attracting private capital to large-scale infrastructure projects, offering a layer of security against demand-side risks.

Conversely, several mandatory annexes appended to the very same document explicitly prohibit the implementation of these financial guarantees. This direct contradiction creates a fundamental ambiguity regarding the extent of public backing for the project. The resolution of this significant discrepancy is imperative before any partners can be formally selected, as it directly impacts the risk assessment and financial commitments of potential private investors in this CFA400 billion Douala tram tender.

The estimated CFA400 billion budget for the Douala tram project, which translates to approximately €610 million, represents an indicative project cost rather than secured financing. This figure was notably absent from the statement released by the Douala City Council on October 26, the same day the tender document was dated. The substantial sum is allocated for a proposed 20-kilometer route, which calculates to an average cost of CFA20 billion per kilometer for the entire planned infrastructure.

This financial scale underscores the magnitude of the undertaking and the necessity for clear, unambiguous terms for private sector participation. The fact that the budget is an estimate, coupled with the conflicting guarantee provisions, highlights the early stages of financial planning and the need for robust due diligence from all parties involved in this Cameroon public-private partnership.

The presence of conflicting financial guarantee provisions within the No. 016/AMI/CUD/2026 tender document for the Douala tram project presents a substantial risk exposure for any private entity considering investment. Lawyers advising potential investors in Cameroonian public-private partnerships must scrutinize such documents meticulously, as the ambiguity surrounding financial guarantees could lead to unforeseen liabilities and disputes. The lack of clarity on whether public support mechanisms will actually be honored or are explicitly forbidden creates an environment of heightened uncertainty.

Before committing significant capital to this CFA400 billion project, private investors will require definitive clarification from the Douala City Council regarding these contradictory clauses. Compliance officers, in particular, should note the critical importance of clear risk allocation in large-scale infrastructure projects like the Douala tram, as unresolved ambiguities can severely undermine investor confidence and the long-term success of the partnership. This situation underscores a key challenge in managing Cameroon public-private partnership risks.

Lawyers advising potential investors in Cameroonian public-private partnerships (PPPs) must scrutinize tender documents like the Douala tram project's No. 016/AMI/CUD/2026 for conflicting financial guarantee provisions, which present significant risk exposure and necessitate clarification before commitment. Compliance officers should note the importance of clear risk allocation in large-scale infrastructure projects.

Source: Original reporting via dgMarket