Tanzania Railways in $130m revival plan
Posted on : Wednesday, 19th November 2014
Tanzania Railways Ltd has embarked on an ambitious Tsh230 billion ($130 million) plan to modernise its infrastructure, to be financed through a commercial loan.
TRL board chairman Severine Kaombwe said the firm also plans to digitise its operations and buy new equipment that will attract more hauliers to transport bulk cargo to upcountry destinations and landlocked countries through the railway network.
“We are finalising a few things with the Tanzania Investment Bank so that the money can be approved, hopefully before the end of this year,” Mr Kaombwe said.
The money will be used to equip TRL with modern locomotives and a cargo tracking system.
Mr Kaombwe told The EastAfrican that a global positioning system (GPS) would be used to track all transactions and cargo movements.
“With the GPS it will be easy to track progress and see the location of the train. TRL will be operating the way airports work,” he said.
He said the railway has customers who transport large amounts of cargo from Dar es Salaam to Isaka 962km away, so the digital system will attract more business.
He noted that one of TRL’s potential customers, Said Salim Bakhresa, transports cargo from Dar es Salaam through Isaka to Burundi or Rwanda.
Independent sources told The EastAfrican that Said Salim Bakhressa and other businesses using TRL were considering using road transport because the railway was becoming unreliable. They also said cargo was frequently lost and not compensated for by TRL.
Mr Bakhresa transports wheat flour, wheat bran pallets, malt drinks, energy drink, juice and biscuits to countries in East and Central Africa. TRL hopes to address the challenge of cargo loss with the introduction of the GPS cargo tracking system.
Other TRL clients include oil companies, cement firms, grain dealers and general traders who ship commodities to the Tanzania hinterland and neighbouring countries.
Recently TRL has been facing financial hurdles, leading to its losing business to road transporters. However, without disclosing details, Mr Kaombwe said performance had improved and it was anticipated that the line would make more profit as business increased.
TRL came into being after the Tanzania Railway Corporation was dissolved. TRL entered into a 25-year concession agreement with Rites of India which took a 59 per cent stake in September 2007. The government established Reli Asset Holding Company (Rahco), which is serving as a landlord for the railway assets.
The World Bank extended a $33 million loan to the government which transferred it as a grant to Rahco. A $40 million partial risk guarantee was also included in the World Bank credit to Tanzania to facilitate the concession of TRC.
At the time of the concession, the corporation was posting an annual turnover of $75 million, with losses of around $6 million each year.
