Tanzanian concessionaire "lacks capital"

[John Ashworth]

The same could probably be said of the Kenyan concessionaire, Rift Valley Railway, led by South Africa's Sheltam, who reportedly currently owe the Kenyan government KES 800 million (more than GBP 6 million)...

TANZANIAN CONCESSIONAIRE “LACKS CAPITAL”

Posted on 02 October 2009 by Railways Africa Editor

According to Tanzanian minister for infrastructure development Dr Shukuru Kawambwa, “one of the major shortcomings of Rail India Technical and Engineering Services (Rites) – the company contracted to run the country’s railways – is shortage of capital. At a press briefing he said the government has formed a task force to work on “problematic issues” in the contract. When these have been identified, measures are to be devised to rectify shortcomings.

If these are found to be sufficiently serious to consider terminating the contract, he said, the government would not hesitate to take this course. 

On the $US44 million loan which Tanzania Railways Limited (TRL) had requested from the International Finance Corporation (IFC), an arm of the World Bank, Dr Kawambwa said the latter had initially agreed to provide $14 million to TRL and had already disbursed $7 million. The government however requested IFC to withhold the remainder pending the outcome of its discussions with Rites.


Minister Kawambwa gave the assurance that train services will not come to a halt as a result of Rites’ decision to suspend the use of its own locomotives, coaches and other equipment, pending payment of its dues. He said the government, through the Railway Holdings and Assets Company (RAHCO), has made equipment available which would enable TRL to continue supplying service.

He was disappointed, he said, with Rites’ decision to suspend use of its equipment (which was imported from India on hire to TRL), until payment for the leasing eventuates.