Mon, 13 Mar 2017
The scale of the investment required to rehabilitate the Tanzania-Zambia Railway (Tazara) has become clear.
New managing director Bruno Ching’andu has calculated how much money will be required to stabilise the operating company, aside from efforts to upgrade the line. It has debts of $700m and needs another $200m for new rolling stock and track improvements.
Tazara was built in the 1970s by the Chinese government, with Chinese finance and workers. It was developed to give Zambia a means of exporting its copper, via the Port of Dar es Salaam, without moving it through Apartheid-era South Africa. It still carries Zambian copper but a lack of investment over many years has restricted revenue. The signalling and telecommunication systems, which have been vandalised over the years, are described by the company as “currently non-existent”.
Ching’andu said: “The debts which the authority acquired in the past have negatively affected the operations of the authority. But, if these debts could be cancelled, the institution can to get back to its normal operations.”
The Tazara Authority cannot raise the finance for the rolling stock and infrastructural improvements while it is so far in debt. The Zambian and Tanzanian governments paid several years’ worth of outstanding fuel bills in the first part of last year, in addition to millions of dollars in employee salary arrears.
In September, the Zambian government said that Tazara needed investment of $1.2bn over the next five years to turn it into a profitable commercial enterprise. Extra capacity is needed to reduce unit transport costs on the line, which currently has haulage capacity of 600,000 tonnes a year but which could carry 2m tonnes a year with the hoped-for investment.
Aside from new investment, a recovery in copper prices would increase demand from the Zambian Copper Belt. However, Tazara could face competition from an alternative copper export route in the near future. The railway from the Copper Belt through Democratic Republic of Congo (DRC) and Angola to the Port of Lobito is being rebuilt. South Africa offers another alternative, either via rail or road.