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- Mar 27, 2006
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Concessioning of Tanzania Railways Corporation (TRC)
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INVESTORS FLYER FOR THE TANZANIA RAILWAYS CORPORATION CONCESSION
Since 1992 the Government has been implementing a systematic reform program encompassing a broad range of Government functions and undertakings. The main focus of the Government's overall strategy for parastatal sector reform has been on improving the operational efficiency of parastatals, reducing the burden of these enterprises on the Government, expanding the role of the private sector in the economy, and encouraging a wider participation of people in the ownership and management of business in Tanzania by eliminating state monopolies and facilitating market competition.
The primary objective of the Government in relation to TRC is thus to create a financially viable railway that provides an efficient and cost effective service to its customers, whilst retaining ownership of national public service assets and safeguarding national interests.
In May 2001 the Government decided to concession TRC as a vertically integrated Concession without open access. The Concessionaire will be granted an exclusive right, with the exception of Trans Africa Railways Corporation's (TARC) access rights, during the twenty-five year Concession Term to operate Rail Transport Services on the Railway Network.
The TRC concession offers a strategic entry point into the East African logistics network. The Preferred Bidder will use the existing rolling stock as well as the metre-gauge network of track which extends across Tanzania, with connections to the Kenya and Uganda networks to the north and TAZARA to the south. TRC represents a strategic base with the opportunity to expand in local and transit rail markets, as these and other government-owned businesses are offered for sale/concessioning. Freight traffic carried by TRC has grown by 7% in 2002 and would have grown more had it not been because of capacity constraint. TRC has a strong base from which to work to continue to grow and develop its regional business. The structure of the concession allows for the Concessionaire to: operate freight and passenger services throughout the rail network; acquire the obligation to use, manage, maintain, operate and develop the Railway Network over the life of the 25 year Concession Term; earn access fees from other rail operators; and acquire the interests in the commercial contracts with customers and suppliers that are current at the time of handover of the Concession Activities.
Three (3) Bidders were fully prequalified:
Prequalification Status Group
Fully Prequalified NLPI/Spoornet
Comazar/Bollore/Caspian/Sheltam-Mvela/Rand Merchant Bank
RITES/GAPCO/UTI Bank
The Request for Technical and Financial Proposals (RFP) was issued to Bidders on June 24th, 2004. The deadline for receiving Proposals is April 13, 2005 and the concession Commencement Date has been set for November 2005.
For further information please contact:
Peter Kieran
CPCS Transcom
tel: +1 (613) 237-2500
fax: +1 (613) 237-4494
pkieran@cpcstrans.com
TRC Network Existing TRC network:
2,707 route kilometres of metre-gauge track
Traffic (Year 2000) Freight:
Passengers:
1.35 million tonnes
625,000
Revenue (Year 2000) Freight:
Passengers:
53.1 (USD million)
7.4 (USD million)
Rolling Stock Locomotives (total/operational):
Diesel-electric mainline locomotives:
Diesel-hydraulic branch line locomotives:
Diesel-electric shunting locomotives:
Diesel-hydraulic shunting locomotives:
116/94
61
25
20
0
Privatisation Schedule Issue RFD:
Bidders' Conference:
Second Biddersd' Conference
Proposal Submission Date:
Commencement of Concession:
June 24, 2004
August 8-19, 2004
January 19-20, 2005
April 13, 2005
June, 2005
Please check back for updates!
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CPCS Transcom
72 Chamberlain Avenue
Ottawa, Ontario, Canada K1S 1V9
Tel: (613) 237-2500 Fax: (613) 237-4494
email: ottawa@cpcstrans.com
2006-10-26 09:13:04
By Judica Tarimo and Gadiosa Lamtey
Talks between government and strategic investors on the formal handing over of the Tanzania Railway Corporation (TRC) are scheduled to re-start immediately, Infrastructure Development Minister, Andrew Chenge has confirmed.
We dont want these talks to go on, and on?our railway facility is under pathetic condition. We are losing a lot of money, said Chenge.
TRC was to be handed over to the strategic investors, M/S Rites Consortium of India last month following talks that commenced in August this year.
We want to enter into a contract that would benefit our people and the country, Chenge said in an exclusive telephone interview yesterday.
The government, through the Parastatal Sector Reform Commission (PSRC), concessioned Rites Consortium to operate TRC on a lease-contract of 25 years.
However, the negotiations have not so far been fruitful despite the governments initial assurance that the agreement on the handing over of the facility would have been signed last month.
The governments struggle to strike a win-win position, the minister said, was the reason behind the delay in the schedule on the signing of the contract and the eventual handing over.
However, fresh talks with the investors from India, the minister said, would start after Eid El-Fitr celebrations but declined to specify when the facility would be handed over to the investors.
We need investors to come in as soon as possible to repair the lines and the facility as a whole, to ease transportation of cargo to other countries, observed the minister.
Chenge said the government is optimistic that, once in the hands of investors, transportation of cargo to Rwanda, Burundi, Democratic Republic of Congo (DRC), and others, could generate a lot of money for the country.
He insisted that it is the pursuit of favourable terms that compelled the government to extend the signing of the agreement to officially hand over TRC to the investors last month.
Even though, it is not clear if the agreement would be able to finalise the talks with the investors in the forthcoming talks.
I cannot confirm this but we want this deal to be finalised as soon as possible, he said.
According to TRC Public Relations Manager, Shukuru Sudi, the public utility firm was losing millions of shillings in telephone wire vandalism and sabotage.
She said that between January and December last year, some 357 kilomentres of wire worth 71,191,000/- was stolen.
During the same period, a total of 421 telephone poles with a street value of 31,996, 000/- got lost.
TRC has 91 locomotive engines. However, owing to lack of spare parts, accidents, and other factors, the company is left with 53 operational locomotive engines.
We had 95 passengers wagons, but financial crisis had failed TRC to purchase spare parts to repair the equipment. This has forced us to abandon about 41 problematic wagons, said Sudi.
2006-08-31 08:00:29
By Judica Tarimo, Sandau Laizer
The signing of a lease agreement to run Tanzania Railway Corporation (TRC) to a concessionaire has been put on hold to pave the pay for further consultations.
''We have put on hold the conclusion of TRC privatisation pending further talks to thrush out the finer details,'' Minister for Infrastructure Development Basil Mramba told a news conference in Dar es Salaam yesterday.
Representatives of the Indian firm and the government held a closed door meeting, which the minister said was working out the modalities of the imminent lease.
After a thorough scrutiny, the government through Parastatal Sector Reform Commission (PSRC) announced M/S Rites Consortium of India as the concessionaire in the 25-year contract to run the 2,715km TRC infrastructure.
The government announced on March 6, this year, the Indian firm's bid was the most competitive. Consequently, the infrastructure would have been handed over to the investors this Saturday (September 2).
''Handing over will not take place as planned because talks with the investors have not been concluded,''said Mramba.
''But there are hopes that the agreement will be signed between September and October to allow the investors to start operations,'' he said, but declined to speculate on the date.
He admitted that the signing of the agreement had taken a long time because the government wanted to protect public interest.
''We want to be careful as much as possible to ensure that we don't repeat past mistakes in the privatisation of other government utilities,'' the minister noted.
''The government is looking for a win-win situation. That is why we delayed to sign the agreement,'' Mramba added.
M/S Rites Consortium officials arrived in the country on Monday this week and have been locked in talks with the government ever since.
The minister said a new date for the transfer of the infrastructure to the concessionaire would be fixed once the talks are concluded.
He appealed to TRC workers to be calm as the government had already set aside 50bn/- to cover their retrenchment.
''TRC staff should not be worried because the government will respect their current terms of employment,'' he said.
''Other arrangements for paying terminal benefits would be announced later,'' he added.
But Mramba declined to give details of the government's stake in the contract and the number of TRC workers lined up for retrenchment. He said the issues were the subject of ongoing negotiations.
The minister dashed hopes of resumption of train services between Dar es Salaam and Dodoma soon.
He also said the government had suspended passenger and cargo services to the country's designated administrative capital from Dar es Salaam due to the lack of wagons, locomotive engines, spare parts and dilapidated infrastructure, among other things.
''The government is cash-strapped and cannot purchase new wagons and engines; we (TRC and the government) are in a financial crisis," the minister said.
Following the suspension, passengers who depend on TRC for affordable transport services are forced to use road transport to Dodoma.
SOURCE: Guardian