LUSAKA – Zambia and Tanzania need a staggering US$380 million to undertake the first phase of refurbishing the Tanzania Zambia Railway (TAZARA) line in order to increase its capacity.
The US$500 million railway line was originally constructed by China under a tripartite agreement with the Tanzanian and Zambian governments in the 1970s.
But over the years TAZARA capacity has declined due to aging infrastructure hence the needs to replenish tracks, wagons, and locomotives to operate effectively, the Zambian Transport Minister Brian Mushimba said.
Mushimba said the railway line has not been operating effectively because of high indebtedness and the infrastructure’s wear and tear.
The entity needs to secure and repair various equipment and locomotives needed to meet its operational requirements.
The rundown infrastructure coupled with insufficient locomotives, railway tracks, wagons, are retarding the company’s obligation to undertake the services needed by the two shareholding countries hence the call for the initial US$380 million financial recapitalization, said the minister.
TAZARA has accumulated debt in excess of US$770 million over the years for various services provided by creditors, a situation which is affecting its efficient operations and hopes the two Governments redress urgently.
The request for finance injection comes amid a recent visit by Chinese State Councillor, Wang Yong who was in Zambia, with a delegation, for various bilateral meetings including one with President Edgar Lungu.
The duo discussed various issues of mutual interest including Zambia’s recent request for US$8 billion loan facility under the Forum for Africa China Cooperation (FOCAC). Zambia needs the funds to accelerate infrastructure development in various sectors of the country.
Mushimba disclosed that the finances would assist kick start the refurbishment of the over 1,860 kilometre railway line covering Zambia from Kapiri Mposhi into Dar Es Salaam where it undertakes both cargo and passenger services but is now limping for want of resources.
During the visit by the Chinese delegation, China’s Foreign Affairs Minister Wang Yi had expressed interest in taking over the operations of the financially strapped TAZARA through a 30-year concession arrangement.
This however is against the desires of the Zambian and Tanzanian Government’s for the project to be taken over for facelift by China under a three to five years management contract arrangement.
Yi stated that the request by his country comes amid calls by mining companies that want to run the railway project, which is the major form of transport for their haulage of copper and other related products to the port of Dar Es- Salaam enroute to Europe.
“Chinese firms who have interest in mining want to run the railway to move mining products and equipment through the railway but we can only allow that through a management contract arrangement with specific terms and conditions unlike the 30-year concession contract,” added Yi.
China’s commitment if allowed to take over the railway line would be to refurbish it and give it a new lease of life through a robust revitalisation process.
TAZARA needs about US$250 million and US$1.2 billion of investments in the short and long term respectively with a call for the private investors to tap into the US$1.2billion investment gap to revive the railway firm, company managing director, Bruno Ching’andu is quoted as saying.