Travel 

Sunday, October 25, 2015 

TAZARA gets $3.4m bailout

DAR ES SALAAM, Tanzania - The government last week released Tsh6 billion (about $3.4 million) towards bailing out the Tanzania-Zambia Railway Authority (TAZARA). 

TAZARA runs the railway between Dar es Salaam and Kapiri Mposhi in north east Zambia.

“TAZARA is a symbol of true friendship and co-operation amongst the countries of China, Tanzania and Zambia and it has a critical role to play in the economies of Tanzania and Zambia. For that reason, we will never allow it to fold up,”  Ambassador Ombeni Sefue, the Tanzania government Chief Secretary said last week while addressing TAZARA workers.

The government has also confirmed that all employees of the Authority were now effectively on the civil service payroll, as from September 2015. 

The Permanent Secretary in the Ministry of Transport Dr. Shaaban Mwinjaka made the announcement when he also attended a meeting to address over 300 TAZARA workers in Dar es Salaam. 

Amb. Sefue’s visit came in the wake of demands by unionized employees of TAZARA to be addressed by the outgoing President Jakaya Mrisho Kikwete. This follows failure by the Authority to clear their outstanding salary arrears.

Amb. Sefue said TAZARA had a very critical role to play in the economies of Tanzania and Zambia and that the two governments were committed and determined to make sure that these challenges were addressed permanently.

Announcing the planned release of the funds to TAZARA, Dr. Shaaban  Mwinjaka, who is also the Co-Chairperson of the TAZARA Board of Directors together with his Zambian Counterpart, echoed the Chief Secretary’s assurances.

He said the government had agreed to release Tsh.6 billion shillings ($3.4 million) as part of recapitalization, specifically for the purchase of fuel, maintenance of the track, repair of Kongolo Quarry and repair of locomotives and coaches.

At the last meeting in December 2014, the TAZARA Council of Ministers, which comprises the Ministers responsible for Transport, Finance and Industry in Tanzania and Zambia, noted and agreed that the performance of the Authority had fallen to record low levels due to various challenges, including liquidity and recapitalisation issues. 

Both shareholders are still making efforts to find permanent solutions to ensure that the Authority becomes self-sustaining.

TAZARA’s freight volumes have drastically dropped over the last 10 years, with less than 90,000 metric tonnes transported in the last Financial Year 2014/2015, compared to about 630,000 metric tonnes that was recorded in the Financial Year 2004/2005 and the 1.27million metric tonnes recorded at the peak performance in the Financial Year 1977/1978.

The drop in the performance of the company over the years has mainly been attributed to many years of lack of re-capitalisation and an indebtedness that has been weighing down heavily on the Authority for several years. 

By Timothy Kitundu, Sunday, October 25th, 2015