Historical background and development of the railway sub sector

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As we are marking 50 years of Tanzania Mainland Independence, the Managing Director of Reli Assets Holding Company wishes to present the historical background and development of the railway sub sector, in particular with regard to a railway network of 2,707kms previously operated by TRC and now TRL. The discussion will also chat out the roles and functions of RAHCO, ongoing and future railway projects. The statement will highlight some of the challenges facing the railway sub sector and way forward .

2. INTRODUCTION
Railways in Tanzania were first built in 1893, when the first rail track was laid at the port of Tanga. Thereafter, construction of railway lines continued to be carried out in other places in Tanzania. In Tanzania, railway services (apart from the TAZARA), were operated by the 1 Tanzania Railways Corporation (TRC), which was established in 1977 after the collapse of the former East African Community. Prior to that, the railways in East Africa were operated under the auspices of the East African Railways and Habours (1961-1967) and thereafter East Africa Railways Corporation (1967-1977)

3. THE ROLE OF RAILWAYS SERVICES IN ECONOMIC DEVELOPMENT
It is important to note that TRC was the largest single transport operator providing transport services for both freight and passengers within the country and transit freight to and from neighboring countries of D.R Congo (eastern), Burundi, Rwanda and Uganda. Up to the early 1980s, TRC network with a design capacity to carry 5 million tons of freight per annum played an important role in the Economic Development of Tanzania and her neighboring countries, particularly the land locked ones.

The number of passengers and freight traffic transported per annum continued to indicate a steady growth to a record high in 2003 of 683,861 passengers and 1442,713 tonnes respectively. However the performance of TRC since 2004 registered a decline trends in terms of freight traffic, passengers, locomotives availability and average train speed. For instance in 2007 freight traffic had declined to 545,241 tonnes whereas passengers declined to 593,889. Operational efficiency of TRC was constrained mainly by infrastructural problems, caused by inadequate reinvestment and deferred maintenance of the permanent way, particularly during the period September 1997 to September 2007, when TRC was specified for privatization.

4. RAILWAY RESTRUCTURING AND PPP ARRANGEMENT
As part of the implementation Privatization Policy the Government embarked on a restructuring program with a view to commercialize the TRC through concessions or Joint Ventures. Although the process took long to implement, it was finally concluded in September, 2007 when M/s RITES of India was awarded the tender to take over the operations of TRC. Following the award RITES and the Tanzania Government formed a company known as Tanzania Railways Limited (TRL) on a 51% – 49% shareholding respectively. On 1st October, 2007, TRL was handed over the activities of TRC with a mandate to operate railway transport services for a period of 25 years following the signing of a Concession Agreement between RITES and RAHCO (On behalf of the Government) on 3rd September, 2007.

Even after the concession, budgetary constraints both for operations and infrastructure development and management problems continued to aggravate the situation. However the shareholders agreement between GoT and RITES has been terminated. RITES Board members resigned on 22nd July, 2011 and TRL operations were handed over to Local Interim Management Team on the 26th, July 2011. The Interim Management role being to revive the TRL operations

 

For Further information, please find the attached full document below,
Download Full Document: 50 years history of railways after independence