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HomeAfricaTanzania revokes railway management contract with Indian firm

Tanzania revokes railway management contract with Indian firm

 Disappointed by the poor performance of an Indi an engineering enterprise with which it had entered a concessional deal in 2007 t o manage the Tanzanian Railways Limited (TRL), the government Friday announced i t s decision to revoke the contract.

The council of ministers reached the decision after a day-long session under the chairmanship of President Jakaya Kikwete, said a statement issued by Chief Secr e tary Philemon Luhanjo.

According to the statement, the government will immediately start negotiation wi th the Indian firm, RITES, on the re-acquisition of the 51 per cent shares the c o mpany was holding in the ailing railway system.

The government would then take over full ownership and control of the TRL in ord er to facilitate a possible acquisition of the company by another investor.

The contract with RITES was scheduled to come to an end in 2025.

Throughout the time that TRL has been under the management of RITES, it has been fraught with financial and technical problems which led to frequent strikes by t he railway workers and incessant complaints from customers, while the government

continued to chip in a lot of money into the organization.

Realization by the government to debunk the deal with RITES has come at the time that member countries of the East African Community (EAC) are embarking on a lo n g-term master plan to revitalize railway systems in the region.

Stakeholders in the railway systems within the EAC late Friday concluded a two-d ay conference here, agreeing to a raft of recommendations to modernize railway s y stems in the region.

Closing the conference, Tanzaniaâ?s Infrastructure Development Minister Shukuru Kawambwa, said that if only 10 per cent of East African freight were moved by r a il it would transform into huge savings in fuel, lead to a significant reduction

in emissions and reduce road traffic congestion.

The conference came up with a draft 12-point set of recommendations which, once implemented, will go a long way in revitalizing the railways systems for enhance d regional integration and economic growth.

It was agreed at the meeting that sufficient funds should be invested in rehabil itating the current railways operations for the short term while concurrently pr e paring the construction of the standard gauge railways.

The participants underlined the need for the development of detailed designs and bankable projects for the prioritized network by 2011 with clear determination o f gauge size; and conclusion of a regional policy and legal framework for the pu b lic/private partnership for railways development by August 2010.

It was also proposed to focus attention at the regional level on the existing ra ilways and the connectivity into Burundi and Rwanda linking all the EAC partner s tates and neighbouring countries to the ports of Mombasa and Dar es Salaam and s e lected inter connectivity links between the networks and inland waterways.

The EAC Secretariat will convene an extraordinary meeting of the Sectoral Counci l of Transport, Communications and Meteorology by end of June 2010 to consider a l l proposals agreed at the regional conference.

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