THE Tanzania-Zambia Railway Authority (TAZARA) board of directors has approved a five-year strategic plan requiring an estimated investment of $207.57m, while facing difficulties in proper implementation of the 30 year concession pact with a Chinese firm.
Current reports say there are outstanding pre-conditions preventing the concession from taking full effect, cited as regulatory and legal requirements that must be finalized before the 30-to-31-year operational lease fully commences.
In its meeting in Dar es Salaam yesterday, the board took note of asset protection and maintenance issues, demanding managing and protecting existing railway assets. The corporate entity needs to keep minimal freight and passenger services running smoothly during a complex transition, noting that it is a significant logistical challenge.
Sector analysts point at severe Infrastructure and rolling-stock constraints: owing to decades of underfunding leaving worn-out tracks and broken-down locomotives, which require major overhauls. The contracted firm, the China Civil Engineering Construction Corporation (CCECC), has an investment commitment of $1.4bn to revitalise the railway line.
The concession firm has begun mobilizing resources and surveying infrastructure, but rehabilitation is billed to be a multi-year hurdle, the sources indicated, .citing a three-year financial gap for core revitalization works before the concession firm, and thus the corporate entity, can generate fresh revenue.
During this time, TAZARA relies heavily on temporary government allocations to sustain employee salaries and basic maintenance, registering significant progress, with key milestones including a syndicate of lenders officially signing financing loan agreements for the TAZARA revitalization project.
Ground infrastructure is apace with physical work began on a new training centre and a centralized operations control centre in Dar es Salaam to prepare the workforce and manage network coordination, they stated.
The project remains highly prioritized by the governments of Tanzania, Zambia and China with intent to unlock up to 2.4m tonnes of annual freight capacity once the initial three-year infrastructure overhaul is complete, they further noted.
The board meeting focused at restoring operational efficiency, modernising railway infrastructure and strengthening financial sustainability.
The mew strategic plan formulated in the context of the concession covers fiscal 2026/2027 to the 2030/2031 financial year, integrating operational revival with the implementation of the concession agreement. The board projected a net profit of up to $11.71m by the end of the planning period.
The funding framework includes government subsidies set at $62.04m over the first three years and $36m in company financing during the final two years. The arrangement signals a planned shift from reliance on government support towards revenue generation and financing linked to the concession agreement.
The plan sets out infrastructure rehabilitation, machinery replacement, procurement of rolling stock, market expansion, adoption of digital systems and institutional capacity-building, “to strengthen ability to manage its remaining responsibilities following the implementation of the concession,” a board statement indicated.
The decisions were reached during the 123rd board meeting where members reviewed progress on railway revitalisation, operational performance and service financing during the transition to the concession arrangement.
Prof. Godius Kahyarara, the Transport permanent secretary, co-chaired the meeting with Fredrick Mwalusaka and his Zambian counterpart.
The authority expects growth to be driven partly by increased cargo traffic through the port of Dar es Salaam and the transportation of minerals from Zambia and the Democratic Republic of the Congo (DRC).
TAZARA’s annual operating revenue is projected to reach $30.23m by fiscal 2030/2031, in view of expectations of improved operations and increased freight volumes as the railway revival programme progresses.
The five-year plan and the $1.4bn concession investment form part of efforts to restore the railway’s capacity and strengthen its role in facilitating trade and transporting cargo between Tanzania, Zambia and the wider region, officials noted.
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