Tanzania-Zambia Railway Authority Press Release: Chief Secretary addresses workers, promises TSh6 billion bailout

Tanzania-Zambia Railway Authority

Chief Secretary addresses workers, promises TSh6 billion bailout

Dar es Salaam, Monday 19 October 2015 – The government of the United Republic of Tanzania has promised to release TSh6 billion (US$1.00 = TSh2,182.00) in the coming two weeks to bailout the Tanzania-Zambia Railway Authority (TAZARA).

The government has also confirmed that all employees of the Authority were now effectively on the civil service payroll, as from September 2015.

The Permanent Secretary of Transport, Dr Shaaban Mwinjaka, made these announcements when he accompanied the Chief Secretary of the United Republic of Tanzania at a meeting to address over 300 workers of TAZARA in Dar es Salaam on Saturday 17 October 2015.

The Chief Secretary’s address came in the wake of demands by unionized employees of TAZARA to be addressed by the President of the United Republic of Tanzania, Dr Jakaya Mrisho Kikwete, following failure by the Authority to clear outstanding salary arrears.

Addressing the workers, Ambassador Ombeni Sefuwe, the Chief Secretary, 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, emphasing 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 Chief Secretary 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.

“I thank you for your patience and for enduring months without payment of salaries, but I promise that the matter of going for months without salaries will be permanently addressed alongside the recapitalisation of the Authority,” said Ambassador Sefuwe.

And announcing the planned release of the funds to TAZARA, Dr Mwinjaka, who is also the Co-Chairperson of the TAZARA Board of Directors together with his Zambian Counterpart, echoed the Chief Secretary’s pronouncement that the Government of Tanzania was committed to revamping TAZARA.

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 TSh6 billion shillings as part of recapitalization, specifically for the purchase of fuel, maintenance of the track, repair of Kongolo Quarry and repair of locomotives and coaches.

Background information

At the last meeting in December 2014, the TAZARA Council of Ministers, which comprises 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 recapitalisation issues.

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 recapitalisation and salaries is in line with the pronouncements of the Council of Ministers.

Both shareholders are still making efforts to find permanent solutions to ensure that the Authority becomes self-sustaining.

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. ENDS

Tanzania-Zambia Railway Authority

Issued by:

Conrad K Simuchile

Head Public Relations