The Tanzania-Zambia Railway Authority (TAZARA) Board
of Directors has approved TAZARA’s new five-year strategic plan for 2013 – 2018,
with an indicative budget outlay of $211.0 million from which $177.0 million will
be applied on the enhancement of capacity in critical areas of operations.
As directed by the shareholding governments of
Tanzania and Zambia, the Strategic Plan has for the first time underpinned private
sector participation in the Authority’s operations, with at least 15% of investment
funds initially expected to be sourced through strategic partnerships with
willing customers and other stakeholders.
Other funds are to be sourced from internally
generated revenues and shareholder support, including loans obtained by the two
shareholding governments from the government of the People’s Republic of China through
the Protocols of Economic and Technical Co-operation.
At meetings held in Lusaka, Zambia, on 5th
and 6th December 2013, chaired by Mrs. Charity Kaande Ngoma, who is
the Permanent Secretary responsible for Transport in Zambia, the Board of
Directors endorsed management’s strategic intent to actively engage stakeholders
in order to meet TAZARA’s critical requirements for both re-capitalisation and
working capital.
“Now that the framework has been approved, we
shall immediately embark on discussions with strategic partners in order to quickly
secure sufficient investment funding for key needy areas of operations,” said
the Acting Managing Director of TAZARA, Eng. Ronald Phiri.
From the US$211.0 million budget outlay, US$90.0
million is to be spent on rehabilitation, repairs and purchase of rolling stock,
including locomotives, wagons and coaches, whilst US$64.0 million will go
towards infrastructure development, US$22.0 million towards human resource development
and US$1.0 million towards the upgrade of the Information Communication Technology
(ICT) profile.
Given the addition of the already acquired six
new locomotives to the fleet in 2013 and the other four new locomotives
expected in 2014 under the 15th Protocol of Economic and Technical
Co-operation, the plan envisages a wide traffic growth path from the annual
tonnage of 480,000 tonnes in 2013, gradually rising up to 1.5 million tonnes by
2018.
With such an increase in traffic volumes, the
annual revenue is projected to proportionately grow from US$48.0 million in
2013 to US$122.0 million in 2018.
At the Lusaka
meeting, the Acting Managing Director informed the Board of Directors, who
included members from both Tanzania and Zambia, that due to many years of
insufficient recapitalization, TAZARA was suffering from serious capacity
constraints, which made it difficult to develop business to sustainable levels
despite the abundant availability of large volumes of imports, exports as well
as local traffic throughout the year.
Eng. Phiri said the Strategic Plan had reviewed
issues and challenges the Authority encountered in the last five years and
prescribed what needed to be done to increase capacity and, therefore, improve
performance over the next five years.
“Having
considered the important issues that need addressing in the next five years, we
firmly believe that great prospects are in sight,” said Eng. Phiri, who noted
that funding for investment in the development and maintenance of the railway
infrastructure had been the least prioritized area in the past.
On 13th November 2013 in Dar es
Salaam, the TAZARA Council of Ministers, which is the highest policy organ of
TAZARA, directed the Board of Directors and Management to work out a framework
for incorporating private sector participation in the Authority’s operations
and future investment plans.
The Council of Ministers had observed that both
the Tanzanian and Zambian Governments were increasingly finding it difficult to
justify the continued putting of tax-payers’ money into TAZARA, when infact the
Authority had the potential to not only be self-sustaining but declaring
dividends as well.
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