Work stoppage cripples Tazara


Lusaka – Tanzania Zambia Railways Authority (Tazara), a joint venture between the two neighbouring states, incurred over US$600 000 loss on uncollected revenues following a weeklong strike recently by its unionised workers.

Conrad Simuchile, the company spokesperson of rail transporter, says the grounding of cross-border operations meant lost business for Tazara, which constructed in 1976 at a cost of US$500 million through a Chinese loan.

“Since workers went on strike, I can safely say we have forgone over US$600 000 in revenue,” he said adding that the strike was still ongoing pending resolutions on the reasons for the work stoppage.

The suspension of transportation of freight and passengers between the two countries followed the withdrawal of labour by unionised staffs in Tanzania who are pressing for their unpaid wages dating back to February.

Simuchile said Tazara management had been trying to resolve the challenges, including looking for investors who would rescue the firm from collapsing, following its inability to perform due to lack of capital.

He said already, six companies had shown interest in investing in Tazara.

“These negotiations sometimes take a while for deals to be sealed. Therefore, the shareholders need to move in and inject some capital. We need funds for fuel to run the locomotives, for repairs of dilapidated infrastructure; that include rails, and bridges to reduce accidents. Nevertheless, now, we do not have sufficient funds. We have been operating on losses.”

According to Simuchile, for Tazara to break even, it needs to move 50 000 tonnes of cargo per month.

“But the firm is only moving on average 18 000 tonnes per month – way below the break even margin,” he said, adding that “Last month alone, Tazara only managed to move about 4 200 tonnes of cargo because of operations incidents like accidents”.

Last week, the railway firm ordered 18 new passenger coaches and spare parts from China, valued at Chinese RMB Yuan 60 million (approximately US$9.52 million) to be delivered by October 2015.

A contract for the supply of the coaches was given to the Chinese Civil Engineering and Construction Company (CCECC), a company appointed by the Chinese government to co-ordinate implementation of all the Chinese supported projects in Tazara.

Tazara managing director, Ronald Phiri, welcomed the development saying the future for the company lay in the recapitalisation efforts considering that the available equipment and infrastructure had drastically depreciated.

“Recapitalisation is the key solution to the challenges facing Tazara,” he said.

“We have reached a stage where a fresh injection of capital is critically key and necessary for the refurbishment or replacement of aged equipment and infrastructure. This includes the fleet of passenger coaches, which have been subjected to extreme strains from overuse and limited maintenance.”

June 2014
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