It seems to be the exception rather than the rule for a railway to be self-financing and it is certainly true that the Tazara Railway depends heavily on government support. Nevertheless, in the long term, it would seem likely to provide an essential service to Tanzania in linking up Dar es Salaam with the potentially highly productive Southern Highlands. One of Tanzania’s greatest problems lies in the great distances that separate the most productive areas from potential markets and export outlets. Among the most important questions facing the Tazara Railway is its long term financial viability. Bilateral donors and the World Bank certainly did not consider its future prospects to be sufficiently bright to justify their financial involvement. In the end the Railway was built with Chinese capital and employing Chinese technical and managerial know-how. But the justification was not based solely on a careful evaluation of financial prospects. An overriding consideration was the short-term need to provide land-locked Zambia with an outlet to the Indian Ocean as an alternative to South African ports and in view of the liberation struggle in Mozambique.
The railway was handed over to the governments of Tanzania and Zambia as a going concern by the Chinese in 1976 with a rated freight carrying capacity of 2.5 million tonnes per year. However, a maximum of 1.273 million tonnes in 1977/78 has never again been approached and in 1982 goods carried reached only 796 million tonnes or 32% of rated capacity. In 1989 goods carried amounted to 1.044 million tonnes on a declining trend (1.143 in 1988, 1.185 in 1987).
The reasons given by the Government for this poor performance were insufficient motive power and rolling stock together with technical and manpower constraints. Inadequate maintenance of the permanent way over the years has contributed to the Railway’s difficulties. A consequence of this deterioration, exacerbated by a landslide between Mlimba and Makambako in 1989 was a reduction in the speed of trains. An increase in the turn-around time of wagons from 13 days in 1988 to 18 days in 1983 further exacerbated the problem. Shortages of spare parts and accidents have contributed to the problems of the Railway Authority. In contrast to the declining trend in the amount of freight there was a continuing increase in the number of passengers. The growth has been continuous since 1985 and by 1989 had reached 1,704 million, a 5.2% increase over the previous year. On the Tanzanian side this increase was attributed to the shortage of buses, the poor condition of the roads and the favourable level of rail fares in comparison with those charged on buses (1).
Under the terms of the Tanzania-Zambia Railway Act 1975 the ultimate responsibility for the railway lies with the Joint Council of Tanzanian and Zambian Ministers set up under an agreement between the two governments on 2nd May 1975. The running of the railway was to be en trusted to a Tanzania-Zambia Railway Authority under a Board of Directors and constituted as a body corporate under the laws of both countries. The Council consists of three Ministers appointed respectively by each government, and is required to meet not Less than twice a year and to consider and determine all questions of policy and, in particular, to approve all major changes in tariffs charged and services rendered by the Authority; any major revision in salaries and conditions of service; all development plans; capital works costing more than five million shillings, or such higher sum as the Council may determine; the construction of new branch lines and the raising of capital. Thus the Council retains extensive and explicit powers of control. Being a political body, there is a clear danger of attaching too great an importance to short-term and political considerations.
In the context of these powers the Authority is required to conduct its business in accordance with commercial principles and to ensure that, taking one year with another, revenue is sufficient to meet its outgoings, including proper allocations to reserves, provision for the depreciation of capital assets, the servicing of loans and the financing of pensions. The Authority is also liable to repay to the two governments any amounts contributed by them to the Authority’ s resources and the loan obligations to China (2).
Financial viability in the sense thus required by law has never been attained and there is at present little prospect of commercial balance. With the restoration of Zambia’s access to the ports of Beira and Nacala and the opening of the highway between Dar es Salaam and Lusaka the railway now faces stiff competition in its cross frontier business. Moreover, the use by Zambia of South African ports is no longer avoided with the same tenacity as before and is likely to increase. The shortage of wagons led recently to an accumulation of 90,000 tonnes of Zambian cargo at the Port of Dar es Salaam of which 41,500 tonnes consisted of fertiliser and the rest wheat, vegetable oil, detergents, equipment and spare parts (3). Such delays are hardly likely to improve the Authority’s commercial reputation. Moreover, the effectiveness of the Board of Directors as commercial managers could be attenuated unless there is a definite policy of restraint on the part of the Council of Ministers or indeed, perhaps a change in the law. For example, a marked improvement in the salaries and status of maintenance staff might be judged necessary to overcome problems with the permanent way which have bedevilled the railway from the outset. But, as things stand, any such decision would require the consent of the Council.
In existing circumstances the longer term prospects for the railway are bound up with economic developments on both sides of the border. Much of the Mbeya Region has considerable economic potential, which would be greatly enhanced by efficient rail communications. Such services will require improvements in the supply of wagons and motive power and a determined effort to reduce the turn-around time at the termini. The arrival, towards the end of 1990 of 17 diesel electric locomotives from America will have helped to relax the strain on existing resources but more will be needed. So far as the financial administration of the Authority is concerned, growing pressure by the Treasury will help the drive towards greater efficiency.
(1) Hali ya Uchumi wa Taifa katika Mwaka 1989: Mpigachapa wa Serikali. Dar es Salaam. 1990.
(2) The Tanzania-Zambia Railway Act. 1975.
(3) Tanzanian Economic Trends. Vol 1. No4. January 1989.