TMSA is in the process of assisting TAZARA to prepare a strategic and business plan.
The performance of TAZARA and the volumes of freight carried have remained fairly static over the past 15 years, and TAZARA has not been able to take advantage of the increased trade volumes associated with the commodity boom which has driven the expansion of mining in the Copperbelt.
TAZARA is also suffering from severe operating capacity constraints, resulting primarily from very low mainline locomotive availability and a severe shortage of working capital. Poor reliability and low asset utilisation prevent TAZARA from attracting new customers and increased freight volumes without a substantial injection of working capital.
In recent years, TAZARA has carried between 0.450 mtpa and 0.6mtpa of freight, of which about 75% has been made up of transit traffic to and from Zambia, DR Congo and northern Malawi via Mbeya. The maximum volume carried was 1.2 mtpa in 1993 when there was an urgent regional demand for maize imports (drought relief). Since then the freight volume has fluctuated around the present low level of 0.5mtpa, which does not generate enough income to cover the full costs of operations.
Consequently, TAZARA has been unable to fund the replacement and maintenance of both equipment and track infrastructure, with deferred maintenance leading to poor reliability and frequent breakdowns, which in turn affects the competitiveness of the service and price which can be charged to customers.
The upper limit of freight pricing is determined by the alternative competitive routes and the road services on the Dar es Salaam corridor. In other words, if TAZARA could perform better in respect of reliability and consistent transit times, then the demand for freight services would increase, and customers would likely be willing to accept a higher rail tariff. Expansion of the TAZARA market is linked to increasing the capacity of the system for a given performance benchmark.
The prospects for increasing the freight volumes on TAZARA, necessary to achieve financially sustainable operations, are mainly linked to the Zambian and Southern DR Congo market. This will entail capturing freight which is presently carried by road on the Dar es Salaam corridor, and also targeting the Copperbelt imports and exports currently routed through the ports of Beira, Maputo and Durban. This inevitably means that TAZARA will have to target the inter-modal freight sector (containers), which is not an important part of its present freight profile. However, it is clear that TAZARA does not presently have the necessary capacity or funding to develop this market. This is the key challenge TMSA is hoping to help address through the development of a strategic and business plan.
