THE Tanzanian Government has promised to release US$2.75 million in the coming two weeks to bailout the Tanzania-Zambia Railway Authority (TAZARA).
Tanzania’s Transport permanent secretary, Dr Shaaban Mwinjaka, made the announcements when he accompanied the chief secretary of that country to a meeting to address over 300 workers of TAZARA in Dar es Salaam at the weekend.
He said the Government had also confirmed that all employees of the authority were now effectively on the civil service payroll, as from September 2015.
Dr Mwinjaka said the chief secretary ambassador Ombeni Sefuwe’s address came in the wake of demands by unionized employees of TAZARA to be addressed by Tanzanian President Dr Jakaya Kikwete, following the failure by the authority to clear outstanding salary arrears.
Mr Sefuwe told the workers that the two governments of Tanzania and Zambia attached a lot importance to TAZARA and would never allow the company to collapse.
He emphasized that TAZARA had a very critical role to play in the economies of the two countries.
“TAZARA is a symbol of true friendship and co-operation amongst the countries of China, Tanzania and Zambia and it has a critical role to play in the economies of Tanzania and Zambia. For that reason, we will never allow it to fold up,” the Ambassador said.
Ambassador Sefuwe told the workers that despite the many challenges that the Authority was currently facing, the two governments were committed and determined to make sure that these challenges were addressed permanently.
He said that apart from ensuring that the workers of TAZARA were now included on the Government payroll, in the interim as the challenges of TAZARA were being addressed, the Government had also agreed to release the money as part of recapitalization, specifically for the purchase of fuel, maintenance of the track, repair of Kongolo Quarry and repair of locomotives and coaches.
And TAZARA head public relations Conrad Simuchile explained that during the last meeting in December 2014, the TAZARA Council of Ministers, which comprised the Ministers responsible for Transport, Finance and Industry in Tanzania and Zambia, noted and agreed that the performance of the Authority had fallen to record low levels due to various challenges, including liquidity and recapitalization issues.
Mr Simuchile said the bailout from Tanzanian Government was in line the council resolutions, adding that the Zambian Government had also been paying salaries for employees in Zambia and that it was also expected to release funds for recapitalization.
He said both shareholders were still making efforts to find permanent solutions to ensure that the Authority becomes self-sustaining.
“The December Council meeting had further resolved that the situation called for immediate remedial measures to resuscitate the company to save it from total collapse and the latest undertaking to release funds towards recapitalization and salaries is in line with the pronouncements of the Council of Ministers,” he explained.
TAZARA’s freight volumes have drastically dropped over the last 10 years, with less than 90,000 metric tonnes transported in the last financial year 2014/2015, compared to about 630,000 metric tonnes that was recorded in the financial year 2004/2005 and the 1.27million metric tonnes recorded at the peak performance in the financial year 1977/1978.
The drop in the performance over the years has mainly been attributed to many years of lack of re-capitalisation and an indebtedness that has been weighing down heavily on the Authority for several years.
Consequently, the Authority has suffered diminishing capacity due to deferred maintenance, aging locomotives, lack of spares and materials, reduction in fleet of wagons and dilapidated infrastructure.