TRL Receives $14M Of Loan To Improve Rail Links

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The investment body of the World Bank, the International Finance Corp., has handed out $14 million of a $44 million loan to Tanzania's national rail company, Tanzania Railways Ltd., to help the troubled company boost operations.

The Minister for Infrastructure Development, Shukuru Kawambwa said the government and India-based RITES, joint owners of the company, had asked the IFC for a loan of $44m to improve operations, the privately owned daily said.

So far they have released about $14m of which $7m has been collected. The rest of the $44m would be released once the TRL management had finished the challenges facing it, he said.

"IFC's $44m loan will strengthen the network and enhance trade flows to the neighboring landlocked countries of Burundi, Rwanda and Uganda, as well as the eastern regions of Congo, Kawambwa was quoted as saying.

The Tanzanian port of Dar Es Salaam is the main export port for copper and cobalt from landlocked Zambia.

Source: The Guardian

 

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Summary of Proposed Investment
Project number: 25151
Company name: Tanzania Railway Corporation
Country: Tanzania, United Republic
SPI disclosed: June 22, 2007
Projected board date July 26, 2007
Previous Events Invested: June 11, 2008
Signed: September 15, 2007
Approved: July 26, 2007

Project description
The proposed project involves an IFC investment of up to $44 million to rehabilitate, develop and operate the approximately 2,700 route-km Tanzanian Railway Corporation (TRC) network, under a 25 year concession (the Concession or the project) granted by the Presidential Parastatal Sector Reform Commission of the Government of Tanzania (GOT), to a consortium led by RITES of India (RITES or the Concessionaire) through a new company, Tanzania Railways Limited (TRL or the company).

The TRC network extends across Tanzania, with connections to rail networks in Kenya and Uganda in the north, and the TAZARA network to Zambia in the south. The TRC network also transports transit freight between Dar es Salaam (the commercial capital of Tanzania on the east coast and one of the busiest ports in the region) and the land-locked countries of Uganda, Rwanda and Burundi as well as eastern Democratic Republic of Congo.

At present, the TRC network is owned and operated by TRC, a parastatal enterprise of the GOT. Since 2003, TRC has experienced substantial deterioration in its financial and operating condition, reporting consistent losses and a steady decline in equity. The main business of the TRC network is freight transportation and in 2006, TRC reported annual volumes of about 0.8 million tons of freight, down from approximately 1.4 million tons in 2003. In 2006, TRC also transported about 600,000 passengers per year, down from 685,000 passengers in 2003.

hii kitu iliombwa hata kabla rites haijaja. na kama walikuwa wanaweza kupata huu mkopo sijui kwa nini walikimbilia kuwapa rites

Project sponsor and major shareholders of project company
RITES was established in 1974, under the Companies Act, 1956 of India, as a public limited company under the Ministry of Railways, Government of India. RITES is internationally recognized as a leading railway consultant with experience in over 62 countries in Africa, South East Asia, Middle East, and Latin America. Most of RITES' foreign assignments have been for national governments and multilateral organizations. RITES has recently moved into the ownership and operation of railways, and has bid for several African rail concessions. In 2004, RITES won the award of a railway concession in an international competition to operate and manage Beira Rail Corridor in Mozambique for 25 years. RITES was a finalist in the Kenya-Uganda concession being financed by IFC. The company had a turnover of $96 million with net profit of $22 million for the financial year ending March 31, 2006. As per audited accounts for the financial year ending March 31, 2007 (yet to be approved in the General Meeting) the respective figures are $132 million and $27 million.

RITES will have 51% of the shares of TRL, while the GOT will own the remaining 49%. As part of the Concession, TRL is free to determine the technical and commercial organization, including employment requirements. TRL is also free to establish and revise tariffs, with the exception of 3rd class passenger fares. However, TRL is required to meet base passenger service requirements as specified in the Concession Agreement in terms of the frequency of services offered for certain routes. The 25 year concession is extendable by mutual agreement

Total project cost and amount and nature of IFC's investment
The total project cost for the first five years is estimated at $111 million, of which $34 million would be contributed by the sponsors in the form of direct equity ($16 million) and internal cash generation ($18 million). The balance of $77 million would be funded in the form of a $33 million World Bank IDA Credit and $44 million IFC A-loan.

kweli hii hela itatumika ipasavyo, duh maskini