TAZARA seeks private investors to fill $1.2 billion funding gap
Sept 30, 2016: The Tanzania-Zambia Railway Authority (TAZARA) has announced it needs investments worth $250 million in the short term and about $1.2 billion in the long term in order to get back to peak performance.
Bruno Ching'andu, managing director, TAZARA, called on private investors to partner with TAZARA in order to achieve the desired investments.
He said the two shareholding governments of Tanzania and Zambia are in the process of revising the legislation that established TAZARA in order to make the company more commercially viable and attractive to private players.
According to the statement, Ching'andu made these remarks when he made a presentation to the 7th East and Central Africa Roads and Rail Summit 2016 in Dar es Salaam.
"The private sector can take advantage of the public-private partnership (PPP) models to partner with us in the running of the Dar es Salaam commuter train managed by TAZARA, whose demand is massive and cannot be satisfied at the moment," he said.
He said TAZARA was also open to PPPs in the installation of the signalling and telecommunication systems, which had been vanadalised over the years and were currently non-existent.
He also highlighted PPP investment opportunities in TAZARA's quarries and workshops, which he pointed out as having huge potential but required re-investment in equipment.
Ching'andu said TAZARA has taken a number of measures in the last six months with a view to reclaiming the market share of the available cargo destined to or originating from Malawi, Zambia and the Democratic Republic of Congo.
Among the measures, he said TAZARA had transformed the application of freight rates by adopting a more flexible tariff regime that was responsive to macro-economic conditions and market trends.
"TAZARA's most desired goal was to make meaningful contributions to the development of the economies of Tanzania and Zambia," he said.
Over the years, TAZARA's passenger service operational levels had dropped drastically to the very minimum, where four trains per week with barely 455,000 passengers were transported in the 2014-15 financial year, compared to ten years ago when the authority used to run six trains per week and convey more than 900,000 passengers annually.
TAZARA was constructed as a turnkey project between 1970 and 1975 through an interest-free loan from China, with commercial operations starting in July 1976. It covers 1,860 kilometres from Dar es Salaam in Tanzania to New Kapiri Mposhi in Zambia.