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Agreement signed on TRC status
2007-05-26 10:00:47
By Guardian Reporter
The government and India`s Rites Limited yesterday signed a shareholders` agreement in a move to speed up the official hand-over of the Tanzania Railway Corporation to a private management.
It is stipulated under the pact that the government will have a 49 per cent stake in the giant but ailing corporation, the remaining 51 per cent going to Rites Limited.
This will be implemented through a concession firm known as Tanzania Railways Limited due to be formed for the purpose, according to a public notice issued by the Parastatal Sector Reform Commission.
PSRC Executive Chairman Ally Karavina signed the agreement on behalf of the government, with Rites Managing Director Vinay Agarwal representing the Indian firm.
The development paves the way for the hand-over of the facility to the strategic investors, as it allows the two respective parties to register TRL in preparation for the signing of the concession agreement.
``This will be followed by the official handing over of the operations of TRC to the concession company expected to be effected in July 2007,`` noted PSRC statement.
Prior to the signing of the agreement, the government and a team of Rites officials had extensive discussions on a number of pending issues. Part of the thrust of the talks was on the new shareholding structure.
``The team was also involved in the due diligence that was being conducted by the International Finance Corporation,`` said the statement.
IFC is a key financier in the investment, which is expected to fund the planned TRL to the tune of US dollars 44 million for the improvement of TRC’s operations.
A high-profile IFC delegation last week wrapped up its assessment on the project`s viability and marketability.
``The key financier (IFC) is conducting a detailed analysis on the viability of the facility before approving investment funds,`` Nshoya Magoti, a desk officer at the Presidential Parastatal Sector Reform Commission overseeing TRC`s privatisation, confided to The Guardian.
The government believes that, with TRC in the hands of strategic investors, it would generate more revenue through the transportation of cargo to and from Burundi, Democratic Republic of Congo, Rwanda and other destinations than is now the case.
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