TAZARA board told to justify required funding

14Mar 2017
The Guardian Reporter
The Guardian
TAZARA board told to justify required funding
  • • The ministers Brian Mushimba and Makame Mbarawa observed that performance of TAZARA had improved after change of top management and operational technical adjustments in the last two years

THE Tanzania Zambia Railway Authority (TAZARA) council of ministers has urged the company’s board of directors to draft a business plan to justify the required capital injection from shareholders.

Minister for Communication, Science and Technology, Prof Makame Mbarawa.

This follows a meeting held between Transport and Communications Minister Brian Mushimba and his Tanzanian counterpart Makame Mbarawa, which revealed that TAZARA was in need of additional funding.

“We noted that there was still a need for injection of investment funds in the authority, and the two Governments remained fully committed to sourcing re-capitalisation funds. However, we urged the board of directors to make a proper business case to justify shareholder funding,” the communiqué read.

This is contained in a communiqué jointly issued on March 10 this year, following the 62nd TAZARA council of ministers meeting held in Lusaka.

The ministers observed that performance of TAZARA had improved after change of top management and operational technical adjustments in the last two years.

It was noted that despite funding to the institution, a lot still needed to be done to further enhance performance and achieve breakeven levels.

The council also directed the TAZARA board of directors to discipline erring company managers to restore integrity in the institution.

The communiqué further noted that progress had been made towards a review of the TAZARA Act to transform the institution to make it more business-oriented, and urged the board to expedite the process and conclude the review within one month.

The TAZARA Railway, also called the Uhuru Railway or the Tanzam Railway, links the port of Dar es Salaam with the town of Kapiri Mposhi in Zambia's Central Province. The single-track railway is 1,860 km (1,160 mi) long and is operated by the Tanzania-Zambia Railway Authority (TAZARA).

The governments of Tanzania, Zambia and China built the railway to eliminate landlocked Zambia's economic dependence on Rhodesia (now Zimbabwe) and South Africa, both of which were ruled by white-minority governments. The railway provided the only route for bulk trade from Zambia's Copperbelt to reach the sea without having to transit white-ruled territories.

The spirit of Pan-African socialism among the leaders of Tanzania and Zambia and the symbolism of China's support for newly independent African countries gave rise to TAZARA's designation as the "Great Uhuru Railway", Uhuru being the Swahili word for Freedom.

The project was built from 1970 to 1975 as a turnkey project financed and supported by China. At the time of its completion, two years ahead of schedule, the TAZARA was the single longest railway in sub-Saharan Africa. TAZARA was the largest single foreign-aid project undertaken by China at the time, at a construction cost of US $500 million (the equivalent of US $3.08 billion today)

TAZARA has faced operational difficulties from the start and was in a state of near-collapse in 2015. Annual traffic was only 88,000 metric tonnes in fiscal year 2015, less than two per cent of the railway's design capacity of five million tonnes per year.

In order to keep the railway running, China decided to waive 50% of its loan-free construction debt in 2011.

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