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There’s need to raise TAZARA’s revenue – Aka

COMMENT - Tanzanian Investment Centre.

There’s need to raise TAZARA’s revenue – Aka
By Florence Bupe
Tue 13 Apr. 2010, 04:50 CAT

Akashambatwa said his immediate task as the new managing director of the railway institution is to raise the revenue for enhanced operational capacity
NEWLY-appointed Tanzania-Zambia Railways (TAZARA) managing director Akashambatwa Mbikusita-Lewanika has said there is need to raise the company's revenue from the current US $3 million to US $5 million for effective operations.

In an interview with the Tanzania Invest, Aka, who was appointed company managing director following the contract termination of Henry Chipewo early this year, said his immediate task as the new managing director of the railway institution is to raise the revenue for enhanced operational capacity.

“Of late the revenue achievements of TAZARA at best have been averaging US $3 million per month, which is still not sufficient to comfortably cover the day to day operations costs,” Aka said. “So our immediate task is to see if we can raise our monthly revenues to at least US $5 million.”

Aka said TAZARA faced the challenge of high debt and low capacity utilisation, which had resulted in serious financial problems.

“Because of the backlog of indebtedness and the low capacity utilisation, it means we are faced with serious liquidity problems and we are unable to finance the day-to-day operational costs,” he said.

Aka reiterated the need to develop the railway sector to compliment the road sector and ultimately support economic activities in the region.

He observed that the current level of economic activities in the region was beyond the capacity of the existing transport infrastructure to accommodate.

“The economic activity of Tanzania, Zambia and the sub-region right now is more than our transport infrastructure capacity, so there is need for the entire transport sector to be further developed and to complement each other,” he said.

Aka explained that railway transport had an advantage over other forms of transport due to its nature, and it is therefore ideal for heavy import and export transactions.

“Whatever gains we are having in fixing our roads are being destroyed by transporting bulk goods like copper on these roads,” Aka said. “If the railway sector reaches its desired capacity, it does not take away what is needed on the road network, but merely provides an opportunity for the road network to only deal with less infrastructure damage.”

Aka said TAZARA holds great prospects in facilitating regional trade for meaningful benefits to countries involved.

He said Zambia would strive to improve the wide railway network by rehabilitating infrastructure and extending connections with other countries.

However, he said the political will of respective countries was critical in the attainment of improved railway transport.

“I am confident that given the political will of the Tanzanian and Zambian governments, TAZARA has been given a chance to move significantly towards achieving its mandate,” he said.

Aka expressed confidence that operational improvements of TAZARA will help address trade bottlenecks between Africa and China.

“In essence, enhancing the capacity and efficiency of TAZARA is actually removing a major bottleneck to failed expansion of China- Africa trade interaction,” said Aka.

As at last year, TAZARA had accumulated debt of about US $60 million.

Labels: AKASHAMBATWA MBIKUSITA-LEWANIKA, TAZARA

posted by MrK @ 2:59 PM