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Railway firm given 2 years to shape up
2008-02-27 09:19:38
By Felister Peter
The government has given Tanzania Railways Limited two years to improve passenger and cargo train services on the crucial Central Line.
The firm, run jointly by the government and India’s Rites Company Ltd, was earlier given until the end of next month to do so or pack up.
Infrastructure Development deputy minister Dr Milton Makongoro Mahanga said in an exclusive interview in Dar es Salaam at the weekend that the government had revised its stance.
He hoped the extension would help the company keep its promise to improve rail transport as indicated in its strategic business plan.
The decision, the minister explained, was based on the fact that it was ``next to impossible`` for the goal to be achieved by the earlier deadline.
He said TRL, which took over the operations of the former State-owned Tanzania Railways Corporation under a 25-year management pact signed last year, needed at least two more years to improve the respective services.
``We (the government) have decided to grant them the extension because we are fully aware of the serious problems the company is facing, including financial constraints,`` noted Dr Mahanga.
The TRL management is currently directing most of its efforts towards the improvement of cargo services.
Officials say these are the firm’s most important potential source of earnings needed to stabilise the generation of funds for the implementation of the service improvement drive.
In an effort to ensure that things run as scheduled, the company has leased nine locomotives from India for the purpose.
They were offloaded at the Dar es Salaam Port yesterday.
TRL managing director Naraslmhaswami Jayaram told reporters who witnessed the offloading of the 10-year-old 88-class locomotives that five more were due in soon.
``In total we expect to have to 25 locomotives from India to help improve our cargo and passenger services. We have accessed them on lease basis from a company in India at an annual fee of $6 million,`` he said.
TRL board member and Tabora Urban legislator Siraju Kaboyonga said they had leased the locomotives instead of buying them because ``leasing of equipment is much cheaper than purchasing them in today`s highly competitive business world``.
``The practice of choice these days is leasing or hiring because it is ultimately less expensive than actually buying whatever equipment one needs. The lessor will usually provide experts and spare parts for the equipment as part of the package,`` he added, when contacted for comment on the issue.
However, he warned that swift improvement of passenger train services was impossible because TRL had too many operational and other constraints to deal with.
He cited shortages of locomotives and wagons as among the most serious ``since those currently operating were inherited from TRC and are dilapidated``.
``That`s why we have been working hard to import as many locomotives as possible and undertake serious repairs on the ones already in our hands. Globally, cargo services are key to the successful operation of rail-transport business,`` observed Kaboyonga, adding that once cargo services improve, passenger services automatically also improve.
He said the newly accessed locomotives are due to be moved to TRL`s central workshops in Morogoro for ``technical examination`` before they go into business in a week’s time.
TRL director have recently admitted that Central Line passenger train services were in bad shape, particularly in terms of water supply and other basic services, blaming the situation mainly on financial constraints.
Kaboyonga said the failure to complete the rehabilitation of 25 locomotives – ten 73-class ones and another 15 of the 88-class type lay at the heart of the company’s troubles.
He revealed that the firm plans to spend a total of $20m on the rehabilitation of the locomotives.
``Once rehabilitation of these locomotives is completed, TRL will have the capacity to carry more cargo to upcountry stations and neighbouring countries. That will help boost the company`s earnings, enabling it to have sufficient funds for the development work,`` he pointed out.
Data for this month, according to MD Jayaram, show that the line has been handling 34 wagons of cargo per day on average up from 30 wagons for last month.
This was despite a recent 35 per cent rise in freight charges.
``If locomotives now under rehabilitation and repair start operations, profitability will increase appreciably. I am certain that will help us substantially in off-setting losses,`` he said.
He added: ``We will be in a better position financially to embark on more serious improvements on passenger services. As of now, we are without the money we need to invest in such improvement ventures.
The MD said, barring unforeseen hitches, he saw the rehabilitation of the locomotives and the repair of other basic facilities completed in two years` time.
TRL had secured a $44 million loan from the International Finance Corporation and a second one of $33 million from the International Development Agency for the improvement of Central Line facilities and services.
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