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The East African : July 28th 2014
The EastAfrican BUSINESS JULY 26 - AUGUST 1, 2014 RAILWAY TRANSPORT Troubled Tazara to get $80m boost Tanzania and Zambia have ag≥eed to invest the money in the loss-making ≥ailway company ove≥ the next 12 months By ERICK KABENDERA The East African T anzania and Zambia have agreed to inject $80 million into their loss-making railway company, which is suffering from decades of under-investment. The governments have agreed to invest the money in the Tanzania– Zambia Railway Authority (Tazara) over the next 12 months, starting with an immediate injection of $9.2 million to offset salary arrears and support operations. The amount agreed upon is slightly more than a third of the $211 million Tazara needs over five years, with the balance expected to be raised from private sources. With interest-free loans worth yuan 2,543 billion ($412 million) from China since its inception in 1968, Tazara is the Eastern economic giant’s largest single foreign aid project in Africa. The 1,860 kilometre line was built to transport copper from Zambia and the Democratic Republic of Congo to Dar es Salaam, from where it was shipped to China. The line also handles imported crude for cleaning at Ndola in Zambia, but has been affected by a decline in cargo volumes and industrial unrest. BACKGROUND Tazara links the Southern African regional transport network to East Africa and the rest of the world through the Dar es Salaam port. It is a major transporter of copper and other minerals out of Zambia and the DRC, but also serves as a key conduit for bulk imports from all over the world, including fuels, fertilisers, general merchandise, hardware and other critical inputs into the mines and agricultural farmlands of Malawi, Zambia, Tanzania and the DRC, as well as Rwanda and Burundi through the Port of Mpulungu on Lake Tanganyika. The authority has been making losses since it was set up, managing a surplus only in 1992. “The cry from Tazara has always been that the company needs recapitalisation in order for it to turn around. The offer by the shareholders of $40 million each in the next 12 months is a good start,” Tazara’s head of public relations Conrad Simuchile said. The Tazara management said it will for the first time seek to raise 15 per cent of the investment fund from the private sector, with China Da≥ to host LNG summit By A CORRESPONDENT The EastAfrican THE FIFTH leg of the annual Africa Gas & LNG Summit series will focus on sustainable development and its economic benefit to the region. The theme of the summit, to be held in Dar es Salaam from September 1 - 4 is: Influencing Global Trade Dynamics Through Sustainable Gas & LNG Project Development. AFGAS2014 highlights include: The economics of the local and international LNG (liquefied natural gas) supply chain, the dynamics of demand and supply; technologies, regulations and policies; the ability of gas to power future generations; the economics of coal versus LNG with emphasis on environmental impact, and investments in the sector. Premesha Motha, the busi- A Tazara train at the main station in Dar es Salaam. Picture: File expected to meet the rest of the commitment. Reforms are also planned in the form of giving autonomy to the Lusaka and Dar es Salaam regional offices. Former Tazara managing direc- tor Damas Ndumbaro, however, said attracting funding from the private sector would be difficult because railways are not profitable ventures. “The operational costs are so high that they call for government investment. From Dar es Salaam to Zambia, the Tazara railway has 274 bridges, over 1,900 culverts and 19 tunnels and it is Tazara that is maintaining the infrastructure from tickets sales. The cost of train tickets needs to be higher if are to raise enough money for maintenance,” said Dr Ndumbaro. However, Lucas Chongo, a former Tazara technical engineer, said the venture could be profitable again if bulk cargo were carried via rail, leaving roads as feeders for other loads. Study on new Mombasa-Bujumbu≥a ≥oute kicks o≠ By MOSES HAVYARIMANA Special Correspondent A FEASIBILITY study on the new transport corridor connecting Mombasa and Bujumbura has kicked off. The proposed alternative route through Olili border, Singida and Kobero border will cover 1,545km, slashing 400km from the previous distance from Mombasa to Bujumbura, through the Northern Corridor. “This doesn’t mean we are going to abandon the Northern and Southern Corridors; no; this route will give traders an alternative for transporting their goods,” said Econie Nijimbere, the chairman of the Burundi Federal Chamber of Commerce and Industry. The study will establish ways to improve the road transport system from Mombasa to Bujumbura by making it as business-friendly as possible. “This [alternative route] will en- courage the business community to increase its trade through the port of Mombasa,” said Gichiri Ndua, the Kenya Ports Authority manag- ing director. If found feasible and adopted, the route will add to efforts by Kenya Ports Authority to ease cargo transit across the region. Recently, the port increased the container quay length from 600 metres to 840 metres, for the first time since 1980. There have also been develop- ments on the Northern Corridor, which links Kenya’s port of Mombasa to Uganda, Rwanda and Burundi. For example, the time taken to transport a container from Mombasa to Kigali has dropped from 21 days to six, reducing costs from $4,500 to $1,750. The elimination of non-tariff bar- riers on the Northern Corridor has also seen the port of Mombasa receive 1,763 ships in 2013 compared with 1,684 in 2011, according to the Kenya Ports Authority. Though there is still work to be done in the Central Corridor, which links Dar es Salaam, Kigali and Bujumbura, Tanzania is committed to slashing transit time by nearly half to three-and-a -half days. Roadblocks on the Corridor have been reduced to five, from 15, close to the ideal figure of three. ness development manager at Neoedge Pte Ltd, the leading producer of the series, said: “There are still a lot of resources to uncover in Africa in terms of natural gas reserves. The continent and its new and underdeveloped reserves have become the focus of energy-hungry nations due to changes in economic, political and industrial activity.” Among companies to be repre- Premesha Motha, manager at Neoedge Pte Ltd The summit promises to be a fun and inspirational peersharing platform.” 43 sented are: Tanzania Petroleum Development Corporation, Tanzania Electricity Supply Company, Energy Water and Utilities Regulatory Authority, African Development Bank, Ministry of Energy and Minerals, Bowman Gilfillan, Worley Parsons, Wentworth Resources, Energy Commission of Ghana and the LNG Technical Standards Committee. “AFGAS2014 promises to be a fun and inspirational peer-sharing platform with international players as well as key LNG experts from South, East and West Africa,” said Ms Motha.
July 21st 2014
Aug 4th 2014