Improvements to the Tanzania railway system will require a capital injection of USD 25million, but will result in improved efficiency and productivity of the Tanzania and Zambia Railway Authority, TAZARA.
According to Mr. Henry Chipewo, the acting Managing Director of TAZARA, the funding will be used to sponsor a project to purchase new locomotives and new wagons as well as spare parts, which will be used to rehabilitate some of the older equipment.
The announcement came last week at the opening of a three-day strategic planning workshop for the railway authority, where over 50 members from both Tanzania and Zambia were represented.
“I need five new locomotives, some brand new wagons and [also to] rehabilitate the existing ones,” said Mr. Chipewo, “All these arrangements require a total of $25 million.”
According to Mr. Chipewo, the purchase of this new equipment will improve the efficiency and productivity of the railway authority.
In addition to this, Mr. Chipewo also said that funding for the project can be sourced from within TAZARA’s own operations and resources.
“[Funding] should not necessarily have to come from the governments of Tanzania and Zambia,” said Mr. Chipewo, “We can source it from our own means so long as the organization operates as a private company.”
In order for privatization to be accomplished, Mr. Chipewo said that TAZARA will need to overcome some of the recent issues it has experienced concerning the mismanagement of company resources.
“TAZARA must operate like a private company,” said Mr. Chipewo, “and this can only be achieved if we overcome mismanagement and centralization of the operations.”
According to Mr. Chipewo, operations at TAZARA are beginning to return to normal since the resolution of the recent financial crisis, which led workers to threaten a strike if their two-month overdue salaries were not paid.
Mr. Chipewo said that he is now looking forward to moving beyond this crisis and beginning the process of restructuring TAZARA in such a way that will raise its annual turnover from USD 36million to at least USD 96million and will also reduce costs.
Mr. Chipewo said that he would like to see these changes begin to take effect as soon as possible.
In addition, Mr. Chipewo said that he is also looking to more than double the current traffic volume and handling rates of TAZARA within the next two years.
In the last ten years, traffic volumes for TAZARA have fallen from 1.2 million tons per year to about 600,000 tons per year.
“We need to establish why customers leave us,” said Mr. Chipewo, “We need to find out why we are only handling up to 600,000 tons per year, while we have a capacity of handling two million tons per year.”
According to Mr. Chipewo, the railway authority will meet with the port authority in order to determine a common strategy whereby the business community would be encouraged to use them instead of using other South African harbors.