Emerging powers news

China bails out Tan-Zam Railways

2010-03-19, Issue 474

http://pambazuka.org/en/category/emplayersnews/63204

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Despite the criticism of Chinese investors in Zambia, Beijing has once again come to the rescue of the Tanzania-Zambia Railway Authority (TAZARA) - a vital link inter-SADC link - by availing a $39-million interest-free loan. TAZARA, which is jointly owned by Tanzania and Zambia, has been teetering on a knife-edge with worn out tracks and wobbling wagons.

Despite the criticism of Chinese investors in Zambia, Beijing has once again come to the rescue of the Tanzania-Zambia Railway Authority (TAZARA) - a vital link inter-SADC link - by availing a $39-million interest-free loan. TAZARA, which is jointly owned by Tanzania and Zambia, has been teetering on a knife-edge with worn out tracks and wobbling wagons.

The firm, which operates the 1,860-long railway line from Zambia's central town of Kapiri-Mposhi to the port city of Dar-es-Salaam in Tanzania, has been providing a vital passenger and cargo service for both countries.
Zambia's Communication and Transport minister, Geoffrey Lungwangwa, announced in Lusaka that the funds would be used to revive operations of the firm, which had come to a virtual standstill. TAZARA operations have plummeted over the years while infrastructure has suffered tremendous wear and tear. Cargo has been marooned while passengers have not been spared whenever a derailment occurs. Apart from wearing out, the tracks, which were constructed between 1970 and 1975, have been vandalised, rendering operations even more difficult.

The financially-crippled firm had accumulated a $60 million debt because of failure to pay pension packages for retired employees, non-remittance of tax to revenue authorities, failure to meet clients' needs resulting in litigation, and generally poor management, among other factors.

The Zambian and Tanzanian governments last year took steps to give TAZARA a new lease of life firstly by changing management, on an interim basis, in a bid to boost efficiency. TAZARA was subsequently able to transport fertiliser into Zambia in time for the beginning of the ploughing season.

There was also an improvement in moving minerals for export from the giant Konkola Copper Mines (KCM) in Zambia's Copperbelt Province from 30,000 tonnes to 42,000 tonnes per month with management targeting to transport 72,000 tonnes per month this year.

TAZARA's regional general manager on the Zambian side, Peter Shitambuli, said in an interview that TAZARA had also revised its cargo haulage rates and improved service delivery to attract more clients in the region.

Shitambuli said TAZARA, which has approximately 1,500 wagons and more than 15 locomotive engines, still requires more investment to make it viable.
Hence the signing of the 14th protocol involving Zambia, Tanzania and China, this year for the $39 million interest-free loan to give TAZARA a new lease of life. Communication and Transport minister, Professor Lungwangwa, said the funds would be used for the rehabilitation of the 1,860km railway line, the procurement of six locomotive engines and four wagons, and for repairing 120 available wagons.

The funds would also be used to modernise the mechanical and other workshops and ensure efficiency in the company's operations through capacity building and other programmes.

Minister Lungwangwa said in an interview that TAZARA is in fact more relevant now because of increased volumes of trade and passengers within SADC and the Northern Corridor in particular.

The railway line to East Africa was conceived when Zambia's trade routes to the south were threatened. Under Ian Smith's white minority regime, Rhodesia (now Zimbabwe) made its notorious United Declaration of Independence (UDI) from Britain in 1965, resulting in the closure of the border with Zambia, the gateway for her exports and imports.

The Zambian and Tanzanian governments then sought the construction of the railway line to offer an alternative route. Thus TAZARA was born out of a massive $500 million loan from the Chinese government following appeals by presidents Kenneth Kaunda and Julius Nyerere.

About 25,000 Chinese were engaged in the construction of this historical railway line alongside thousands Zambians and Tanzanians who braved harsh terrain and weather conditions through one of Africa's most rugged landscapes.

On completion, passenger volumes increased, particularly those engaged in business in the Great Lakes Region and the Asian countries.

Small and medium entrepreneurs have found it convenient to use TAZARA between Kapiri-Mposhi and Dar-es-Salaam. Initially, the railway firm was staked for concession as a way of saving it from total collapse. During bilateral talks In July last year, Zambian

President Rupiah Banda and Tanzanian President Jakaya Kikwete directed the board of directors to expedite the concessioning process of management and operations of the railway firm to a competent railway enterprise from China.

The heads of state said if the concession was not possible in the near future, the board should recruit competent managers to run the firm.
There is currently a chief executive officer and his deputy on interim basis while the firm is in the process of recruiting experienced personnel on a permanent basis

Copyright: Sila Press Agency

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