by Stanley Carlos Okombo
@StanleyOkombo
Tanzania and Zambia have agreed to inject $80 million into their
loss-making railway company, which is suffering from decades of
under-investment.
The governments have agreed to invest the money in
the Tanzania–Zambia Railway Authority (Tazara) over the next 12 months,
starting with an immediate injection of $9.2 million to offset salary
arrears and support operations.
The amount agreed upon is slightly more than a
third of the $211 million Tazara needs over five years, with the balance
expected to be raised from private sources.
With interest-free loans worth yuan 2,543 billion
($412 million) from China since its inception in 1968, Tazara is the
Eastern economic giant’s largest single foreign aid project in Africa.
The 1,860 kilometre line was built to transport
copper from Zambia and the Democratic Republic of Congo to Dar es
Salaam, from where it was shipped to China.
The line also handles imported crude for cleaning
at Ndola in Zambia, but has been affected by a decline in cargo volumes
and industrial unrest.
The authority has been making losses since it was set up, managing a surplus only in 1992.
The authority has been making losses since it was set up, managing a surplus only in 1992.
“The cry from Tazara has always been that the
company needs recapitalisation in order for it to turn around. The offer
by the shareholders of $40 million each in the next 12 months is a good
start,” Tazara’s head of public relations Conrad Simuchile said.
The Tazara management said it will for the first
time seek to raise 15 per cent of the investment fund from the private
sector, with China expected to meet the rest of the commitment.
Reforms are also planned in the form of giving autonomy to the Lusaka and Dar es Salaam regional offices.
Former Tazara managing director Damas Ndumbaro,
however, said attracting funding from the private sector would be
difficult because railways are not profitable ventures.
“The operational costs are so high that they call
for government investment. From Dar es Salaam to Zambia, the Tazara
railway has 274 bridges, over 1,900 culverts and 19 tunnels and it is
Tazara that is maintaining the infrastructure from tickets sales.
The cost of train tickets needs to be higher if are to raise enough money for maintenance,” said Dr Ndumbaro.
However, Lucas Chongo, a former Tazara technical
engineer, said the venture could be profitable again if bulk cargo were
carried via rail, leaving roads as feeders for other loads.
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