According to an announcement last week from TAZARA – Tanzania and Zambia Railway Authority – improvements to the Tanzania railway system will require a capital injection of USD 25million in order 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.
Mr. Henry Chipewo, the acting Managing Director of TAZARA for the past two month, spoke in Dar es Salaam last week at the opening of a three-day strategic planning workshop for over 50 officials from TAZARA, representing both Tanzania and Zambia.
“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 and 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 begin to overcome some of the recent issues that 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. Time has gone for our company to depend on wagons and locomotives donated by other organizations.”
According to Mr. Chipewo, operations at TAZARA are returning to normal since the recent financial crisis, which led workers to threaten a strike if their two-month overdue salaries were not paid, has been resolved.
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 as to raise its annual turnover from the current USD 36million to at least USD 96million and, at the same time, he is also looking to reduce costs.
Mr. Chipewo is looking to see these changes begin to take effect as soon as possible.
In addition to this, 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.