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October start for Tanzania rail concession

12 Sep 2007

THE TANZANIAN government and RITES Ltd of India signed a 25-year concession agreement for the 2 700 km metre-gauge state railway on September 3. The government holds 49% in the newly-established Tanzania Railway Ltd, with RITES holding 51%, and operation of Tanzania Railways Corp is scheduled to be officially handed over on October 1.

An asset holding company, Reli Assets Holding Company (RAHCO), has been formed to oversee implementation of the agreement and monitor TRL's performance. It will also supervise future investments in the railway's infrastructure. The Surface & Marine Transport Regulatory Authority, a department of the Ministry of Infrastructure Development, will act as regulator.

The agreement was signed by TRL Director Sudhir Kumar and Agnes Bukuku, Acting Chairman of the RAHCO board. The ceremony had initially been scheduled to take place in 2006, but was postponed after the government, RITES Ltd and the International Finance Corp differed on the terms of the agreement.

The concessionaire's top initial priority is to revive passenger services from Dar-es-Salaam to the hinterland, suspended some time ago due to the poor condition of the infrastructure. 3 286 TRC employees are to be employed by TRL when the new management takes over, on terms and conditions no less favourable than those they currently enjoy. Headcount will be reduced by 3 204.