News Column

Investors Wanted to Shore Up Tazara

May 19, 2014

The Tanzania Zambia Railway Authority (TAZARA) management is looking for investors who will rescue it from collapsing following its inability to perform due to lack of capital.

The 1,860-kilometre rail line was built with a $500 million interest-free Chinese loan between 1970 and 1975.

Commercial operations started in 1976.

The Authority spokesperson, Conrad Simuchile told East African Business Week the company was underperforming and operating at a loss which is the major reason they want to privatise it.

He said already five companies have shown interest in investing in the TAZARA. What was remaining is official blessing from the management board regarding privatization processes.

"We are able to generate very little, an average of $2.5 million monthly while the salaries demand for the workers reaches $1.4 million. Still more is needed for fuel to run the locomotives, for repairs of dilapidated infrastructure, that include rails, and bridges," he said.

Simuchile said: "The monthly expenditure goes beyond $3 million."

He said TAZARA needed recapitalization in order to perform effectively.

Last week the Authority suspended operations in all stations in the Tanzania side and Kasama station in Zambia region due to a workers' strike demanding their three months unpaid salaries.

Simuchile told East African Business Week, affected all stations located between Dar es Salaam and Tunduma in the Tanzania side and Kasama in Zambia.

"The unionized workers of the TAZARA have illegally withdrawn their labour, demanding their unpaid salaries for February, in some cases, and for March and April 2014, in all cases," Simuchile said'.

The officer however could not reveal how much the strike could affect the Authority economically from the fact that all production activities had been impeded.

He said the suspension will affect both the freight and passenger operations between Dar es Salaam and Tunduma, until the problem is rectified.

The officer said however that normal operations will continue between Nakonde and New Kapiri-Mposhi on the Zambian side.

He also cited the stand of the Authority that it was doing all it could to ensure it resolves the situation for the normal operations to resume as quickly as possible.

TAZARA has for the last few years been experiencing various problems including financial resources to run the company. It has also being facing financial problems in repairing some of the dilapidated infrastructure.

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Source: AllAfrica

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